SHA Employer Penalty Calculator: 2% Late Remittance Rule
SHA employer penalty: an employer who remits SHA deductions after the 9th of the following month is charged 2% of the outstanding contribution for every month it stays unpaid, under Section 27(6) of the Social Health Insurance Act, 2023. While a penalty is unpaid, SHA’s FAQ says the employer is flagged non-compliant, its employees are marked inactive, and a new PRN cannot be generated.
Written on 5 October 2026 from the Social Health Insurance Act, 2023 (Kenya Law text), SHA’s published FAQs (sha.go.ke/faqs) and SHA public notices.
The SHA employer penalty is a cost that grows every month you stay late, and it also reaches your staff at the hospital counter. This page shows how the penalty works, lets you estimate it, and sets out the steps to clear it. It is part of our SHA for employers guide, and the payment steps are in the SHA e-slip guide. If you are an individual or self-employed member rather than an employer, read our SHA arrears and Lipa Pole Pole guide for individuals instead. The rules below follow the Act and SHA’s own published FAQs.
The SHA Employer Penalty at a Glance
| Item | What applies |
|---|---|
| Rate | 2% of the outstanding contribution for every month it remains unpaid |
| Deadline | The 9th of the month following the pay month. The penalty applies to payment after that date. The 9th comes from the Social Health Insurance Regulations, 2024 and SHA’s public notices, not from the Act itself. |
| Legal basis | Section 27(6) of the Social Health Insurance Act, 2023 (the penalty). Section 48(1) (the offence of non-remittance). |
| Who pays | The employer. The deduction is the employee’s, but remitting it is the employer’s duty. |
| Effect on staff | Employees can be marked inactive and restricted from services until penalties are paid |
| Effect on you | Flagged non-compliant, and a new PRN is blocked until the penalty is settled |
SHA Employer Penalty Calculator
One month’s remittance, paid late
How months are counted: neither the Act nor SHA’s FAQ says how a part month is treated. The calculator counts whole months, so a payment a few days after the 9th is estimated as one month. Confirm the exact treatment with SHA on 147. Missed several pay months? Run the calculator once for each month and add the results. The figure on your SHA account is the one you pay.
Want the exact figure checked? Send us the amount owed and the months overdue on WhatsApp and we will tell you the next step.
Check My PenaltyWorked example
An employer owes KES 55,000 for one pay month and pays it 3 months late.
| Reading of the 2% | Penalty | Total to clear |
|---|---|---|
| Simple: 2% of the original amount each month | KES 3,300.00 | KES 58,300.00 |
| Compounded: 2% on the growing balance | KES 3,366.44 | KES 58,366.44 |
Common mistake: some guides state the 2% is compounded as if the law said so. Section 27(6) says 2% for the period the contribution remains unpaid, and it does not say simple or compound. SHA’s FAQ is also silent. We show both so you can budget, but pay the balance SHA gives you.
What Else Happens When an Employer Is Late
- Staff cover: Section 27(4) of the Act says a person can access healthcare services under the Act only while their contributions are up to date and active, and Section 27(7) requires outstanding contributions and penalties to be paid before access resumes. SHA’s FAQ applies this to employees of employers with unpaid penalties, who can be restricted until the penalty is cleared.
- PRN block: the system will not generate a new PRN while a penalty is unpaid. You cannot simply pay the current month and leave the penalty.
- Criminal exposure: separate from the 2%, Section 48(1) of the Act makes it an offence for an employer to fail, without lawful excuse, to pay contributions within the prescribed period, or to knowingly make an unauthorised deduction from an employee’s wages. On conviction the fine can be up to KES 2 million, the prison term up to three years, or both.
- Recovery: under Section 49(2), sums due to SHA are recoverable as a civil debt, and a court that convicts an employer can also order the unpaid contributions and penalty to be paid.
How to Clear a SHA Employer Penalty
- Get your balance. Call SHA on 147 or 0800 720 601, or email customerservice@sha.go.ke, and ask for the outstanding contributions and penalty for your employer account.
- Submit any unfiled months. An e-slip comes only from a submitted month. See the SHA e-slip guide.
- Settle the penalty as SHA directs. SHA’s FAQ gives no separate penalty paybill procedure, so use the payment instructions SHA gives you for the penalty. Do not guess an account number.
- Generate your PRN and e-slip. Once the penalty is cleared, the system can issue the PRN for the current month.
- Pay and keep proof. Pay with the e-slip number as the reference and check your transaction history.
- Confirm your staff. Check a few employees on the SHA eligibility check.
Common mistake: some pages tell employers to clear arrears on paybill 200222 with a National ID as the account number. That is the individual route. SHA’s FAQ gives employers the e-slip number as the account number.
Penalty blocking your PRN? Message us the amount owed and the months overdue and we will point you to the next step.
WhatsApp UsCan an Employer Get the SHA Penalty Waived?
SHA’s FAQ says it is developing structured waiver and amnesty processes, with separate categories for employers and for system-triggered errors, plus approval workflows. It also describes a proposal to count the transaction date as the payment date, with a one-day grace period under consideration for bank delays such as RTGS. These are described as proposals and developments, not confirmed policy, so ask SHA on 147 before assuming a waiver applies. If you believe a penalty is wrong, write to complaints@sha.go.ke with your proof of payment. Under Section 43 of the Act, a person aggrieved by a decision made under the Act can appeal to the Dispute Resolution Tribunal within one month of the decision.
Avoid the SHA Employer Penalty
- Submit the month early, so the e-slip exists well before the 9th.
- Pay by a method that lands the funds by the 9th. A transfer released on the 9th may arrive late.
- Reconcile your payroll total against the submission before you pay.
- Save the confirmation every month, so you can show the payment date if there is a dispute.
Related Employer Guides
SHA for employers
The full obligation and checklist. Open hub.
SHA e-slip and payment
Submit and pay step by step. Open guide.
Arrears for individuals
Self-employed members and Lipa Pole Pole. Read guide.
SHA PRN explained
The payment reference. PRN guide.
Frequently Asked Questions
What is the SHA employer penalty?
A penalty of 2% of the outstanding contribution for every month it remains unpaid, charged under Section 27(6) of the Social Health Insurance Act, 2023 when an employer remits after the 9th.
Is the 2% SHA penalty compounded?
The Act and SHA’s FAQ do not say. Section 27(6) states 2% for the period the contribution remains unpaid. Pay the balance SHA gives you.
What is the fine for not remitting SHA contributions?
Section 48(1) of the Act provides for a fine of up to KES 2 million, imprisonment of up to three years, or both, for an employer who fails without lawful excuse to pay contributions within the prescribed period or knowingly makes an unauthorised deduction. This is separate from the 2% penalty.
What happens to employees if the employer owes a penalty?
SHA’s FAQ says employers with unpaid penalties are flagged non-compliant and their employees are marked inactive, with access to services restricted until the penalty is paid. Section 27(7) of the Act requires outstanding contributions and penalties to be paid before access resumes.
Why can I not generate a new PRN?
SHA’s FAQ says the system blocks a new PRN while a penalty is unpaid. Clear the penalty first.
How do I pay the SHA penalty as an employer?
Ask SHA on 147 or 0800 720 601 for your balance and payment instructions. SHA’s FAQ gives no separate penalty procedure, and employers pay contributions with the e-slip number, not a National ID.
Can the SHA penalty be waived?
SHA says waiver and amnesty processes, including one for employers, are being developed. Confirm with SHA before relying on one.
Penalty on Your SHA Employer Account?
Not sure what you owe, or a PRN will not generate? Message us on WhatsApp with the amount owed and the months overdue, and we will point you to the next step.
WhatsApp Us NowDisclaimer: MyCyber (mycyber.co.ke) is an independent educational website, not affiliated with SHA, the Ministry of Health or the Government of Kenya. This page is general information, not legal advice, and the calculator gives estimates only. Details are based on the Social Health Insurance Act, 2023, SHA’s published FAQs and SHA public notices. Penalty rules and procedures can change, so always confirm with SHA. SHA toll-free: 0800 720 601 (Mon–Fri, 8am–5pm).
