PAYE
Late filing: the higher of 25% of the tax due or KES 10,000. Late payment: a 5% penalty on the unpaid tax, plus interest at 1% per month until settled.
Housing Levy
3% of the unpaid amount per month — on both the employee and employer portions. Six months late roughly adds a fifth of the original liability.
NSSF
5% of the unpaid contributions per month or part month. There is no cap, and arrears surface at the worst moment — when an employee tries to claim benefits.
SHIF
2% of the amount due per month outstanding, and unpaid months can interrupt employees' access to care under the fund.
The compounding problem
Because all four share the same due date, one missed payroll month triggers four penalty clocks at once. On a KES 1M monthly payroll, a single fully-missed month left unresolved for a quarter typically costs more than a year of payroll software.