Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
An employer of record in Kenya provides valuable insights into the local labor laws and regulations. Collaborating with a professional service provider can help you navigate various aspects such as employment contracts, probationary periods, policies, and third-party approvals. They can assist you in understanding and complying with the requirements related to the duration and content of employment contracts, the permissible length of probationary periods, the inclusion of mandatory policies in the employment contract, and the necessary approvals for foreign contracts and seafarers' contracts. By partnering with an employer of record, you can ensure adherence to the legal framework while managing employment relationships effectively in Kenya.
| Overview | |
| Continent | Africas |
| Country | Kenya |
| Capital | Nairobi |
| Time zone | UTC+03:00 (EAT) |
| Total Time zones | 1 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| The personal Tax filing deadline | 30th June |
| Financial Year | 1 July – 30 June |
| Date format | dd/mm/yyyy |
| Currency | Kenyan Shilling (KES) |
| VAT | the standard rate is 16% |
Employer Payroll Contributions in Kenya
| Employers | % of Gross Salary |
| National Social Security | 6% |
| National Housing Development Fund (NHDF) | 1.5% (not official yet) |
| National Industrial Training Levy (NITA) | 50 KES per employee |
| Total Employment Cost | 6% + 50 KES |
Employee Payroll Contributions in Kenya
| Employees | % of Gross Salary |
| National Social Security | 6% |
| National Housing Development Fund (NHDF) | 1.5% (not official yet) |
| National Hospital Insurance Fund | 150 - 1,700 KES (applicable to employees with gross salary more than 100,000 KES per month) |
| Total Employee Cost | 6% + NHIF |
Minimum Wages in Kenya
| Minimum Wage | |
| Minimum Wage | The monthly minimum wage ranges between industry and geographical location. |
Payroll Cycle in Kenya
| Payroll | |
| Payroll Cycle | Monthly |
| 13th Salary | No 13th salary. |
Personal Income Tax in Kenya
| Income Tax | |
| Up to 288,000 KES | 10% |
| 288,000 - 388, 000 KES | 25% |
| Over 388,000 KES | 30% |
Employment Options
Employees
In Kenya, employees can be hired on indefinite-term or fixed-term contracts, either as full-time or part-time workers. All employees are entitled to fair labor practices, which are regulated through statutory provisions, employment contracts, or collective bargaining agreements (CBAs) for unionized employees.
Engaging Independent Contractors:
Companies have the option to engage independent contractors through personal services contracts. The terms of service for independent contractors are determined by the contract for service between the company and the contractor.
Tax Withholding for Independent Contractors:
When contracting independent contractors, companies are required to withhold taxes on the gross payments made to them. The withholding tax rates are set at 3 percent for residents and 20 percent for non-residents, unless a different rate is specified in a double tax treaty between Kenya and the contractor's country of residence.
Employment Contracts and Policies
Employment Contracts
In terms of best practice, employment contracts can be either oral or written. However, if the contract is for a duration of more than 3 months or requires the completion of a task spanning more than 3 months from the start of employment, certain minimum terms must be provided in writing. It is mandatory to present a written contract to an employee within 2 months of their employment.
Probationary Periods
During the initial phase of employment, a probationary period of up to 6 months is allowed. If both parties agree, this period may be extended for an additional duration of up to 6 months. A written probationary contract stating the probationary period is required.
Policies
Employers are required to have mandatory employment or human resources policies in place, including disciplinary and grievance policies, sexual harassment policies, and safety and health policies. These policies must be referenced in the employment contract to ensure enforceability.
Third-Party Approval
In general, there is no obligation to lodge employment contracts or policies with or seek approval from any third party. However, there are exceptions for foreign contracts and contracts for seafarers. A foreign contract of service, which involves performing services outside of Kenya by a Kenyan citizen, must be in the prescribed form and attested by a labor officer. Specific conditions need to be met, such as obtaining the employee's consent, ensuring compliance with the Employment Act 2007, verifying the employee's medical fitness, and confirming that the employee is not simultaneously employed by another employer during the term of the foreign contract. For seafarers, their employment contracts must be approved by the Kenya Maritime Authority.