SHA penalty calculator: 2% a month on late remittances

Short answerChecked 28 October 2026

SHA charges employers a penalty of 2% a month on the unpaid contribution, from the day after the 9th (the remittance deadline) until payment, under section 27(6) of the Social Health Insurance Act. Three unpaid months of KES 50,000 owe KES 150,000 of arrears and 2% × (3 + 2 + 1) months = KES 6,000 of penalties if paid now — KES 156,000 in all. The figure on your SHA statement of account decides.

SHA penalty calculator for employers2% a month · due by the 9th

Monthly amount dueI know the amountWork it out from payroll

SHA contributions due for one monthThe total of your staff's 2.75% deductions, as on your SHA statement.

Months not remittedConsecutive unpaid months, counting the month you pay for after the 9th as 1.

KES 6,000in penalties · KES 156,000 to clear with the arrears

3 unpaid months of KES 50,000 add up to KES 150,000, and 2% a month on each gives KES 6,000 of penalties if you pay now.

Penalty month by month (simple 2%, not compounded)
Line	Amount
Month 1 of arrearsKES 50,000 × 2% × 3 months late	KES 3,000
Month 2 of arrearsKES 50,000 × 2% × 2 months late	KES 2,000
Month 3 of arrearsKES 50,000 × 2% × 1 month late	KES 1,000
Unpaid contributionsKES 50,000 × 3	KES 150,000
Total to pay SHA	KES 156,000

Penalty = Σ unpaid contribution × 2% × months late (Social Health Insurance Act s.27(6))

What next: how to pay an SHA penalty as an employer (e-slip, paybill 200222) and how to pay SHA.

Indicative: the figure on your SHA statement of account decides. SHA's penalty module was scheduled to go live on 10 July 2025, with penalties applied from that date onwards; SHA is building waiver and amnesty processes, and section 27(6) also mentions "the total annual contributions" without saying how that changes the base.

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On this page · 5 sections

How SHA works out the penalty
Worked example: three months not remitted
Cutting or avoiding the penalty
FAQ
Sources

How SHA works out the penalty

Rule	What the source says
Deadline	Deductions are remitted by the 9th of each month (SHIF Regulations 2024, clause 16(1)) — SHA public notice
Penalty rate	"2% monthly rate on unpaid contribution. The penalty accrues each month until the payment is made" — SHA FAQ
Legal basis	A penalty of two percent of the amount due for the period it remains unpaid — Act s.27(6)
From when	The penalty module was scheduled to go live on 10 July 2025, penalties applied from that date — SHA FAQ
Contribution	2.75% of gross monthly pay, minimum KES 300 per person — SHA premium rates

The calculator applies 2% to the unpaid contribution of each month, for each month it stays late. SHA does not say the 2% is charged on earlier penalties, so it is not compounded; section 27(6) also mentions "the total annual contributions" without saying how that changes the base.

Worked example: three months not remitted

Unpaid month	Contribution	Months late when paid	Penalty
First month	KES 50,000	3	KES 3,000
Second month	KES 50,000	2	KES 2,000
Third month	KES 50,000	1	KES 1,000
Total	KES 150,000		KES 6,000

Paying a month later adds 2% of KES 150,000 — another KES 3,000. While penalties stay unpaid, employees are marked inactive and the portal issues no new payment reference: see how to pay an SHA penalty as an employer.

Cutting or avoiding the penalty

Pay before the 9th: the penalty starts the moment the deadline passes. Payment channels are in how to pay SHA.
Check each employee's 2.75% with the SHA contribution calculator — the KES 300 minimum applies per person.
Waivers: SHA says it is developing structured waiver and amnesty processes (SHA FAQ); none was in force when we checked on 28 October 2026.

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Frequently asked questions

How much is the SHA penalty for late payment?

2% of the unpaid contribution for each month it remains unpaid, under section 27(6) of the Social Health Insurance Act. Employer remittances are due by the 9th of the following month.

How do I calculate SHA penalties?

For each unpaid month, multiply the contribution by 2% and by the number of months it has been late. Three months of KES 50,000 paid now: 50,000 × 2% × (3 + 2 + 1) = KES 6,000.

Are SHA penalties compounded?

SHA's FAQ says penalties are 2% a month on the unpaid contribution and accrue each month until payment; it does not say they are charged on earlier penalties. Your statement of account shows the exact figure.

When did SHA start charging penalties?

SHA says its penalty module was scheduled to go live on 10 July 2025, with penalties applied from that date onwards.

How do I pay an SHA penalty?

Through the employer portal: generate the e-slip and pay by bank or M-PESA paybill 200222 with the e-slip number as account number. See how to pay an SHA penalty as an employer.