Payroll and Benefits Guide -Kenya

Kenya
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Currency

Kenyan Shilling (KES)
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Capital

Nairobi
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Employer Taxes

6.00% +  50 KES
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Date Format

dd/mm/yyyy
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Fiscal Year

1 July – 30 June

Fun Facts

Kenya is known for its diverse landscapes, including savannahs, mountains, lakes, and coastal areas.

The Maasai Mara National Reserve in Kenya is renowned for its wildlife and the annual wildebeest migration.

The Maasai people of Kenya are known for their distinctive culture, traditional clothing, and their close connection to the land and wildlife.

Swahili and English are the official languages of Kenya.

Nairobi, the capital city of Kenya, is often referred to as the “Green City in the Sun.”

Kenya is a popular destination for ecotourism and adventure activities.

Kenya

Contributions

Employee Payroll Tax

Contribution TypeRate
National Social Security Fund6.00%
National Hospital Insurance Fund1.50%*
Social Tax150-1,700 KES

Employer Payroll Tax

Contribution TypeRate
National Social Security Fund6.00%
National Housing Development Fund1.50%*
National Industrial Training Levy50 KES per employee

Payroll

Payroll Cycle

Kenya uses a monthly payroll cycle. Payment is normally made on the last day of the month for work performed between the first and last days. Pay for hourly workers is due at the end of the working day.

13th Salary

There are no provisions about 13th salary in the law.

Work Hours and Week

In Kenya, a typical workweek consists of 45 hours.

According to the New Labour Law, employees cannot work more than 56 hours per week, and daily overtime cannot total more than 4 hours. Shift work schedules are also subject to new laws.

Overtime

The rate of overtime compensation is 150% of the usual wage.

If time off in lieu of pay is not offered, the New Labour Law mandates that companies pay employees who perform overnight shifts (between the hours of 10 p.m. and 6 a.m.) extra wages. The compensation must be at least 1.2 times the standard hourly wage.

Kenya

Leave

Paid Time Off

After one year of employment, an employee is entitled to a minimum of 21 days of paid annual leave. New hires have the right to an annual vacation starting in the seventh month after starting their employment, per the New Labour Law.

Although an employee is entitled to 10 consecutive calendar days of leave at least once out of the required 15 calendar days of leave, an employer may, with the employee’s approval, divide the minimum yearly leave entitlement into multiple sections to be taken at different intervals.

Public Holidays

When a public holiday falls on a Sunday, it is substituted by a day off on the following Monday.

The lunar cycle governs the religious holidays, which will be confirmed closer to the celebration.

Sick Days

Employees are entitled to a sick leave benefit of at least seven days at 100% of their usual pay after two continuous months of employment. A additional seven days at 50% of the annual average income will follow.

A professional medical certificate of inability to work is required for all sick days.

Maternity Leave

Maternity leave for women must last three months and be compensated at 100% of normal pay. A medical certificate and at least seven days’ notice to the employer of the scheduled leave date are requirements for eligibility.

The same rules for maternity and paternity leave apply in cases of adoption. However, the employer must receive 14 days’ notice rather than just seven.

Paternity Leave

Two weeks of paid paternity leave are given to fathers.

Parental Leave

Two weeks of paid paternity leave are given to fathers.

Termination

Termination Process

A fixed-term contract may be terminated by the employer due to business, personal, or employee wrongdoing. It necessitates notice and a justification for the termination in writing. If the cause is misconduct, the employee must be given a warning and the opportunity to defend their actions.

When an employment contract is terminated at the employer’s request, the employer is required to make the final salary payment on the day of termination. The employer is required to offer a certificate of employment if the employee has been working there for more than a month.

Notice Period

Kenya’s notice requirements are as follows:

  • Employees on probation should receive at least seven days’ notice before their employment ends.
  • A minimum of 28 days’ notice of termination is required for workers who are paid on a monthly or longer basis.

Severance Pay

Only when a termination is due to redundancy is severance compensation due, which is paid at a rate of 15 days for each year of service. Service compensation is payable at a rate equal to severance pay in cases of termination for reasons other than redundancy.

Probation Period

Probation Period

In Kenya, the probationary phase lasts about three to six months. If the company decides to terminate the employee during this time, they must provide seven days’ notice or pay them in lieu of notice.

According to the New Labour Law, which went into effect on January 1, 2022, an apprentice’s base pay cannot be less than 70% of the base pay of a full-time worker performing the same type of work. The base pay for a probationary employee shall be the same as the base pay for the same position.

Immigration

Employers of foreign nationals have a variety of possibilities thanks to Kenya’s immigration system. To enter the country, the majority of business travelers must apply for an eVisa. The permissible period of stay in Kenya will be determined by the immigration authorities at the port of entry, and is typically no longer than 30 days, with two additional extensions of 30 days each, for a total of 90 days.

For up to 90 days with the Special Pass, foreign nationals may engage in employment activities. Prior to the foreign visitor’s trip to Kenya, Special Pass applications must be submitted at the Kenya Immigration Department Headquarters.

The long-term work permit (Class D Permit), which needs sponsorship by a Kenyan legal body, is appropriate for qualified and experienced professionals or technical personnel. For one or two years, work permits are first provided, and they can be extended for further time.

VAT

The commonly used standard rate of VAT in Kenya is 16.00%