Each authority charges for lateness in its own way. KRA charges for filing late and again for paying late, with a minimum that bites hardest on small payrolls. NSSF, SHA and the Housing Levy charge a percentage for each month the money is outstanding. Here is what each one costs, then a worked example.
The penalties in one table
| Obligation | Due | Late filing | Late payment |
|---|---|---|---|
| PAYE (P10) | 9th of the following month | Higher of 25% of the tax due or KES 10,000 | 5% of the unpaid tax, plus interest at 1% a month or part of a month |
| Failure to deduct PAYE | When salary is paid | Higher of 25% of the tax involved or KES 10,000 | Plus the tax itself |
| Housing Levy | 9th working day of the following month | Declared on the P10 | 3% of the unpaid amount for each month it remains unpaid |
| NSSF | 9th of the following month | 5% of the total contributions for each month or part month late | |
| SHIF | 9th of the following month | 2% of the outstanding contribution for each month it remains unpaid | |
| NITA levy | Declared on the P10 | RSM reported 5% of the amount due; confirm the current rule with NITA | |
| HELB | 15th of the following month | HELB’s notices give 5% of the unremitted amount for each month or part month; confirm with HELB |
The PAYE figures are from KRA’s own FAQ. Interest under section 38 of the Tax Procedures Act runs until the tax is paid in full. The failure-to-deduct penalty is under section 37(2) of the Income Tax Act and also covers deducting tax but not accounting for it.
HELB has also announced flat per-employee penalties for employers who fail to declare staff with loans or to forward deductions, and press reports of the amount differ. If HELB writes to you, use the figure in its letter.
A worked example
A business with three staff on gross pay of KES 50,000, KES 90,000 and KES 30,000 forgets its August 2026 payroll obligations and sorts everything out on 25 September, under a month late. The amounts due were:
| Item | Amount due |
|---|---|
| PAYE | 23,192.95 |
| Housing Levy, both shares | 5,100.00 |
| NSSF, both shares | 20,400.00 |
| SHIF | 4,675.00 |
What the delay costs:
| Charge | How it’s worked out | KES |
|---|---|---|
| PAYE late filing | 25% of 23,192.95 is 5,798.24, below the minimum | 10,000.00 |
| PAYE late payment | 5% of 23,192.95 | 1,159.65 |
| PAYE interest | 1% for one month or part of a month | 231.93 |
| Housing Levy | 3% of 5,100.00 for one month | 153.00 |
| NSSF | 5% of 20,400.00 for one month | 1,020.00 |
| SHIF | 2% of 4,675.00 for one month | 93.50 |
| Total | 12,658.08 |
The KES 10,000 late filing minimum is most of the bill. For a small employer, the late PAYE return almost always costs more than the late payment. Treat KRA’s own calculation on your iTax ledger as final; it may round differently.
Five things the table doesn’t tell you
File even if you can’t pay. The late filing penalty is separate from the payment penalty. If cash is short on the 9th, file the P10 on time and pay what you can. You avoid the KES 10,000 and pay 5% plus interest only on the balance.
Nil returns count. An employer with a PAYE obligation and nobody on payroll that month still owes a return. A missed nil return carries the KES 10,000 minimum, because 25% of nothing is nothing. If you’ve stopped employing people for good, remove the obligation on iTax rather than filing nil returns indefinitely.
The wrong tax head is as good as late. PAYE goes on a slip under Income Tax - PAYE. The Housing Levy and NITA go under Agency Revenue. Pay the levy on the PAYE slip and iTax shows the levy as unpaid, accruing 3% a month, while PAYE shows a credit. KRA can reallocate it, but you have to ask.
Weekends don’t move the date. 9 August 2026 was a Sunday. File and pay by the Friday rather than assume Monday is fine.
Monthly penalties keep running. The NSSF, SHIF and Housing Levy percentages repeat for each month the money is outstanding. A quarter’s delay on NSSF is roughly 15% of the contributions, not 5%.
Getting a wrong return right
Mistakes on a filed P10, such as a wrong PIN, a missed employee or PAYE computed on the wrong base, are fixed by filing an amended return. On the simplified return, choose Amended as the return type on the basic information sheet, re-enter the whole month and upload it again. If the amendment increases the tax, pay the difference straight away; interest runs from the original due date.
Underpaying because of a calculation error is the expensive version of this. If KRA finds it in an audit, it can treat the shortfall as tax not deducted, with the 25% or KES 10,000 penalty on top. Errors you find and correct yourself cost interest. Errors KRA finds cost more.
If you’ve already been penalised
- Check the assessment. Penalties are sometimes raised on a return that was filed but rejected, or on a payment made under the wrong PIN. Your iTax ledger and bank records settle most of these.
- Object in time. A penalty is a decision you can object to on iTax. KRA’s PAYE guide gives 30 days from notice.
- Ask for a waiver. The Tax Procedures Act lets you apply to KRA to waive penalties and interest, usually after the principal tax is paid. Approval is not automatic. A short, documented explanation works better than a long letter.
- NSSF and SHA. Talk to the branch or relationship officer. Pay the principal first; it stops the monthly percentage growing.
The filing calendar lists every date for the year. If you run payroll yourself, a reminder on the 5th of each month prevents most of the costs above.