Running payroll for a hotel or restaurant in Kenya has never been more complex than it is in 2026. You manage shift allowances, service charge, overtime for banquet staff, high turnover, seasonal casuals, and tips — all while trying to keep your team motivated.

Yet one wrong deduction can cost you a KRA penalty, a disgruntled chef walking out, or a failed compliance check during a hotel or a restaurant classification audit.

At Hocan Holdings, we work with hospitality businesses across Kenya who are tired of payroll surprises on the 9th of every month. This is your definitive 2026 guide to what is really on a Kenyan payslip.

The 2026 Payslip at a Glance

Every compliant payslip in Kenya now has 5 mandatory statutory items:

Gross Pay - (NSSF + SHIF + Housing Levy + PAYE) = Net Pay Plus Employer-Only costs: NSSF match + Housing Levy match + NITA

Let's break each down.

1. PAYE – Pay As You Earn

This is income tax deducted by you as the employer and remitted to KRA by the 9th of the following month.

2026 KRA Bands (Monthly Taxable Pay after deductions):

  • Up to KES 24,000: 10%
  • KES 24,001 – 32,333: 25%
  • KES 32,334 – 500,000: 30%
  • KES 500,001 – 800,000: 32.5%
  • Above KES 800,000: 35%

What reduces taxable pay before you apply PAYE?

NSSF, SHIF, Affordable Housing Levy, and contributions to a registered pension scheme (up to KES 20,000/month). Then apply Personal Relief of KES 2,400 per month.

Hospitality tip: Taxable benefits like staff accommodation, meals above KRA limits, or low-interest staff loans must be added to gross pay before calculating PAYE. Many hotels miss this.

2. NSSF – National Social Security Fund

This is the biggest change for 2026. Under Year 4 of the NSSF Act 2013, effective 1st February 2026, the pensionable salary limits increased significantly.

  • Tier I (Lower Limit): KES 9,000 → 6% Employee = KES 540, 6% Employer = KES 540 → Total KES 1,080
  • Tier II (Upper Limit: KES 9,000 to 108,000) → 6% of (Gross up to 108k minus 9k) = up to KES 5,940 per side
  • Maximum contribution: KES 6,480 employee + KES 6,480 employer = KES 12,960 total

3. SHIF – Social Health Insurance Fund

SHIF replaced NHIF on 1st October 2024 and is mandatory in 2026.

Rate: 2.75% of gross pay Minimum: KES 300 per month, no maximum cap Tax benefit: Employee gets 15% tax relief on SHIF contribution

4. Affordable Housing Levy (AHL)

Still mandatory in 2026 under the Affordable Housing Act, 2024.

  • 1.5% of gross pay deducted from employee
  • 1.5% of gross pay paid by employer as a matching contribution
  • No cap. Remitted to KRA alongside PAYE by the 9th.

5. NITA – Industrial Training Levy

The most overlooked one.

  • KES 50 per employee per month, payable by the employer only. It is not a deduction from the employee's payslip.
  • Applies to all employees including casuals.
  • Payable through KRA iTax unified payroll return. Contributing employers can claim back training costs for staff upskilling.

Compliance Calendar: PAYE, SHIF, Housing Levy, NSSF, and NITA all share the same deadline: 9th of the following month.

Sample Payslip: Front Office Supervisor – KES 65,000 Gross

  • Gross Pay: 65,000
  • NSSF Tier I: -540
  • NSSF Tier II: -3,360
  • SHIF (2.75%): -1,787.50
  • Housing Levy (1.5%): -975
  • Taxable Pay: 58,337.50
  • PAYE (after 2,400 relief): approx. KES 10,951
  • Net Pay: ~KES 47,386

Your cost as employer: Gross 65,000 + NSSF 3,900 + Housing Levy 975 + NITA 50 = KES 69,925

Why Hospitality Payroll Goes Wrong

1. Casuals & High Turnover: Forgetting to register casuals for NSSF/SHIF/NITA

2. Allowances & Service Charge: Treating service charge as non-taxable

3. Manual Excel Errors: Using 2025 NSSF caps (KES 4,320) instead of 2026 (KES 6,480)

4. No P9s: Staff need P9s by 28th Feb — hotels often fail to issue them

How Hocan Holdings Takes Payroll Off Your Plate

Hocan Holdings Limited is a registered HR solutions provider in Nairobi helping hospitality groups focus on guests, not on iTax.

Our HR & Payroll Management Package includes:

  • End-to-End Payroll Processing: Gross-to-net with current 2026 rates
  • KRA iTax & SHA Compliance: Timely filing by the 9th, with TCC protection
  • Hospitality-Ready Payslips & P9s: Handling shift allowances, overtime, service charge, and tips correctly
  • NITA Training Reimbursement Support: Help you register and claim back staff training
  • HR Advisory: Contracts for casuals, leave management, and 5-year audit-ready records

Partner with Hocan Holdings today. Let us make your payroll compliant, transparent, and staff-friendly, So you can get back to delivering 5-star guest experiences.