Employer of Record in Kenya

Simplified Payroll Management 

Managing payroll for a diverse and dispersed workforce can be overwhelming. With our EOR services, we take care of payroll processing, ensuring accurate and timely payments to your employees.

Risk Mitigation 

Non-compliance with local labor laws and tax regulations can lead to hefty fines and legal repercussions. Our EOR services help mitigate these risks, protecting your business’s reputation and financial stability.

Efficient Employee Onboarding and Contracting 

Managing teams can be challenging, but our EOR and PEO services make it effortless. From onboarding new hires to managing contracts, we ensure a smooth and compliant process, saving you time and effort.

Comprehensive HR Support

Our dedicated HR support team assists you with employee-related inquiries, from benefits administration to performance management. Consider us an extension of your HR department.

HR Compliance

Navigating through complex employment laws and regulations in Kenya can be a challenge. Our employer-of-record solution ensures you are up-to-date with ever-changing compliance requirements, ensuring your business remains in full legal compliance at all times.

Employment Contracts in Kenya

In Kenya, it is imperative that employment contracts be executed in writing, clearly outlining the salary amount in Kenyan shillings, the local currency.

Probationary periods in the country should not exceed six months. Nonetheless, they may be extended for an additional six months if deemed necessary.

Under Kenyan labor law, employers can terminate an employee’s contract without prior notice. However, they are obliged to provide compensation equivalent to the salary the employee would have earned during the minimum 28-day notice period. To avoid such situations, employers can include specific provisions in the contract.

Regarding severance pay, the calculation is based on 15 days’ wages for each year of service with the employer.

Working Hours in Kenya 

According to this employment act in Kenya, the regular working week consists of 45 hours, typically distributed across five or six working days, depending on the employer’s preference.

Overtime work is permitted in Kenya but should not exceed 15 hours a week. Employees are entitled to receive at least one and a half times their regular wage rate for overtime hours.

Holidays in Kenya 

Employees in Kenya are entitled to several public holidays throughout the year. Some of the major public holidays in Kenya include:

• New Year’s Day – January 1st
• Good Friday – The Friday before Easter Sunday (date varies each year)
• Easter Monday – The Monday following Easter Sunday (date varies each year)
• Labor Day – May 1st
• Madaraka Day – June 1st (Commemorating the day Kenya attained internal self-rule in 1963)
• Utamaduni  Day – October 20th (Celebrating different cultures and tribes  in Kenya )
• Jamhuri Day – December 12th (Celebrating Kenya’s independence, attained in 1963)
• Christmas Day – December 25th
• Boxing Day – December 26th

Leaves and Benefits in Kenya 

Annual Leave 

In Kenya, employees are entitled to 21 annual leave days with full pay after completing one year of service to the employer. The calculation of leave days is based on 1.75 working days per month for 12 months.

Sick Leave 

As per Section 30 of the Employment Act, employees who have completed two consecutive months of service with their employer are eligible for a sick leave of at least seven days with full pay. Once the initial seven days have been utilized, the employee can only claim an additional seven days of sick leave within the following 12 months, but this time on half pay.

Maternity leave

All female employees of reproductive age have the right to take a 3-month maternity leave with full pay, and after this period, they are required to resume their job. Employees need to inform their employers about their intention to take maternity leave.

Compassionate leave

Compassionate leave is granted to employees facing unforeseen and unplanned situations, such as the illness or death of a loved one or friend. The company policy usually determines the specific duration of this leave.

Paternity Leave in Kenya

Male employees have a right to two weeks of paternity leave. You’re required to pay them at their regular salary throughout this period.

Leave of Absence 

A leave of absence allows employees to address personal responsibilities and duties. Generally, this type of leave is unpaid, and the company’s policies define its duration.

Payroll Taxes and Statutory Deduction in Kenya 

In Kenya, employees’ salaries and wages are subjected to statutory deductions.

As per Section 19(1) of the Employment Act of Kenya, the employer can deduct an agreed-upon amount from an employee’s wage to support a fund or program approved by the commissioner for labor, provided the employee consents to such deduction.

The essential statutory deductions include:

• PAYE (Pay As You Earn)
• NHIF (National Hospital Insurance Fund)
• NSSF (National Social Security Fund)
• NITA (National Industrial Training Authority)

PAYE

The PAYE must be deducted by the employer and remitted to the Kenya Revenue Authority, typically on or before the 9th day of the following month. It is only applicable to people earning Ksh. 24,000 and above per month.

NHIF 

Employers deduct from the employee’s income and remit to NHIF. This contribution is usually graduated with a minimum of Kes 500 and a maximum of Kes 1,700 per employee earning Kes 100,000 every month.

NSSF 

The fund’s objective is to provide social security for its members and their dependents against contingencies provided in the act.

• Tier I – It is set at 12 % of the lower limit of Kes 6,000, which translates to Kes 720 with an equal contribution of Kes 360 by both employer and employee.
• Tier II – A cumulative 12% of 18,000 (upper limit) which is Kes 2,160 is set.12 % of the lower limit which is Kes 720 will be taken as Tier I and the balance of Kes 540 will be Tier II.

The employer usually deducts these contributions from the employee’s income as per the act and must be filed and remitted before or on the 15th of the following month.

Termination and Probation in Kenya 

Termination Process

• In cases of misconduct, performance issues, or incapacity, the employer must conduct a hearing before termination.
• The employee has the right to be accompanied by a union representative or another employee during the hearing, and the employer must provide a termination letter with reasons.
• Final wages must be paid on the termination date, and a certificate must be given to employees employed for over four weeks after termination.

Notice Period

• No notice is needed for daily wage employees.
• A 28-day notice from either the employer or employee is required for monthly wage employees, or payment in lieu can be given.

Severance Pay

• There are no legal provisions for severance pay except in cases of redundancy.
• Severance payment equals 15% of wages for every 15 days of work.

Probation Period

• The probation period in Kenya is six months.
• Employers must give seven days’ notice if dismissing an employee during probation.