Starting October 1st, 2024, the new Social Health Insurance Fund (SHIF) will replace the National Hospital Insurance Fund (NHIF) for calculating healthcare deductions from Kenyan employees’ salaries. SHIF introduces a percentage-based deduction system, moving away from NHIF’s fixed contribution rates.
SHIF will deduct 2.75% of an employee’s gross salary, establishing a progressive structure where higher earners contribute more. This shift is part of Kenya’s ongoing efforts to improve universal healthcare access by aligning contributions with income levels.
Here’s a comparison of NHIF vs. SHIF deductions for different gross salary brackets:
Ksh 20,000 salary: Under NHIF, the deduction was Ksh 750, while SHIF will reduce this to Ksh 550.
Ksh 50,000 salary: NHIF deducted Ksh 1,200, but SHIF will slightly increase this to Ksh 1,375.
Ksh 100,000 salary: NHIF contributions were Ksh 1,700, whereas SHIF will raise this to Ksh 2,750.
Ksh 200,000 salary: NHIF charged Ksh 1,700, but SHIF’s 2.75% rate will result in Ksh 5,500.
Ksh 500,000 salary: Previously fixed at Ksh 1,700 under NHIF, SHIF will now deduct Ksh 13,750 for this income level.
Ksh 1,000,000 salary: NHIF deductions remained at Ksh 1,700, but under SHIF, contributions will significantly rise to Ksh 27,500.
Overall, SHIF’s percentage-based model lessens the burden on lower-income workers while increasing contributions for higher-income earners. The start of SHIF represents a significant change in Kenya’s healthcare financing system.