Employment in Kenya is governed by the Employment Act 2007, the Labour Relations Act and the Regulation of Wages Orders, which set minimum pay and hours by sector and location. Here is what employers need to know about leave, pay, tax, statutory deductions and ending employment.
The Employment Act sets minimum leave for all employees. Contracts and collective agreements often give more, particularly for sick leave.
Working days of paid leave after every 12 consecutive months of service, taken in one or more blocks. Employees can take leave pro rata once they have 2 months’ service.
After 2 consecutive months of service: 7 days on full pay, then 7 days on half pay, in each 12 month period, on a medical certificate.
On full pay, paid by the employer. The employee has the right to return to the same or a comparable job.
On full pay, paid by the employer.
Set up each Kenyan leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata annual leave and full- and half-pay sick leave. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Kenya has no single national minimum wage. Regulation of Wages Orders set monthly, daily and hourly minimums for each occupation, with different rates for the cities (Nairobi, Mombasa and Kisumu), other municipalities and the rest of the country, and a separate order for agriculture. Rates are usually reviewed around Labour Day on 1 May, so always check the latest gazetted order.
Under the general wages order, usually worked over 6 days. Night workers can work up to 60 hours a week.
Of the basic hourly rate for hours beyond normal hours.
Of the basic hourly rate for work on the weekly rest day or a public holiday.
Capture attendance and overtime in IceHrm, including rest day and public holiday work, and feed the hours straight into payroll at the right rate. Time & attendance →
Kenya taxes employment income at progressive rates through Pay As You Earn (PAYE). Employers deduct PAYE every month and file and pay it to the Kenya Revenue Authority (KRA) on iTax by the 9th of the following month.
| Monthly taxable pay | Annual taxable pay | Rate |
|---|---|---|
| First KES 24,000 | First KES 288,000 | 10% |
| Next KES 8,333 | Next KES 100,000 | 25% |
| KES 32,334 – KES 500,000 | KES 388,001 – KES 6,000,000 | 30% |
| KES 500,001 – KES 800,000 | KES 6,000,001 – KES 9,600,000 | 32.5% |
| Over KES 800,000 | Over KES 9,600,000 | 35% |
Employee contributions to NSSF, the Social Health Insurance Fund and the Affordable Housing Levy are deductible when calculating taxable pay.
Employers deduct several statutory contributions from pay and add their own share on top. Most are due by the 9th of the following month.
| Contribution | Employer | Employee | Basis |
|---|---|---|---|
| National Social Security Fund (NSSF) | 6% | 6% | Pensionable pay up to KES 108,000 a month (max KES 6,480 each) |
| Social Health Insurance Fund (SHIF) | – | 2.75% | Gross pay |
| Affordable Housing Levy | 1.5% | 1.5% | Gross pay |
| NITA training levy | KES 50 | – | Per employee per month |
Under the Work Injury Benefits Act, employers must insure all employees against work-related injury and disease with an approved insurer. Premiums depend on the insurer and the risk of the work.
Build Kenyan pay the way you already structure it, with your own salary components, deductions and formula columns, such as NSSF, SHIF and housing levy columns. Want to know how well IceHrm handles payroll calculations for Kenya? Contact us or see Payroll →
Employment in Kenya is not “at will”. A dismissal must be for a valid and fair reason, related to the employee’s conduct, capacity or compatibility, or the employer’s operational requirements, and follow a fair procedure. Before dismissing for misconduct or poor performance, the employer must explain the reason and hear the employee, who can bring a colleague or union representative.
| How wages are paid | Notice |
|---|---|
| Daily | End of the day |
| Weekly or every 2 weeks | 1 pay period |
| Monthly or longer | 28 days |
Before a redundancy, the employer must give at least 1 month’s written notice to the employee (or their union) and the local Labour Officer, and select employees fairly based on seniority, skill, ability and reliability. Employees made redundant receive:
Every departing employee is entitled to a certificate of service. Unfair dismissal claims can be brought to the Employment and Labour Relations Court, which can award up to 12 months’ gross wages.
Kenya’s public holidays are set by the Public Holidays Act. When a holiday falls on a Sunday, the following Monday is a holiday. The government can also gazette additional one-off holidays, and usually declares Eid al-Adha a holiday each year.
Employees who work on a public holiday are paid at twice their basic hourly rate under the general wages order.
Leave groups give each office its own holiday calendar, so you can add gazetted holidays such as Eid al-Adha as they are announced and have leave requests count working days correctly. Holiday calendars →
A written contract is required for any employment lasting 3 months or more, or for work that adds up to 3 months. The employer must draw up the contract, explain it to the employee in a language they understand, and keep it on file.
A probationary contract can be for up to 6 months and may be extended once, by agreement with the employee, for up to a further 6 months. During probation either party can end the contract with 7 days’ notice or 7 days’ pay in lieu.
Send contracts for e-signing, store them with KRA, NSSF and SHA details on the employee’s record, and track registrations with onboarding task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Kenya, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Kenya? Talk to us.
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