Payroll and Benefits Guide Kenya

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

General

The monthly minimum wage varies depending on industry and geographical location and ranges from 13,572.90 KES for a cleaner or gardener to 30,627.45 KES for a cashier or heavy commercial driver.

Payroll Cycle

In Kenya, the payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last day of the month. Casual employees are to be paid at the end of the workday.

13th Salary

There are no provisions in the law.

General

The standard workweek in Kenya is 45 hours per week.

The New Labour Law states that employees should not work more than 56 hours per week and the maximum overtime per day should not exceed 4 hours. There are also new laws for shift work patterns.

Overtime

Overtime is paid at the rate of 150% of regular pay.
The New Labour Law requires employers to provide extra pay to employees who work during night hours (between 10pm and 6am) if time off in lieu is not provided. The pay amount must be not less than 1.2 times the regular hourly salary.

Working Week

Monday-Friday

Paid Time Off

An employee is entitled to a minimum of 21 days of paid annual leave after completing one year of employment. Under the New Labour Law, new employees are entitled to annual vacation from the 7th month of their employment commencement.

An employer may with the employee’s consent, divide the minimum annual leave entitlement into different parts to be taken at different intervals, however, the New Labour Law entitles an employee to 10 consecutive calendar days of leave at least once out of the minimum 15 calendar days leave.

Public Holidays

Public holidays that fall on a Sunday are moved to the following Monday as a day off in lieu.

The religious holidays are determined by the lunar cycle and will be confirmed nearer the date of the holiday.

Sick Days

After two consecutive months of service, employees are entitled to sick leave of not less than seven days at 100% of the employee’s regular salary. After that, a further seven days at 50% of the typical salary rate per year.
All sickness leave requires a professional medical certificate of incapacity to work.

Maternity Leave

Women are entitled to three months of maternity leave paid at 100% of the regular pay rate. To be eligible, the woman must give at least seven days’ notice to their employer when the leave is intended to be taken and must provide a medical certificate.

In the event of adoption, the same laws for maternity and paternity leave apply. However, instead of seven days’ notice, 14 days’ notice must be given to the employer.

Paternity Leave

Fathers are entitled to two weeks of paid paternity leave.

Parental Leave

Fathers are entitled to 2 weeks paid paternity leave.

Other Leave

Parents who are preparing to adopt a child are eligible for one month of pre-adoptive leave with full pay. Parents must provide 14 days’ notice to their employer and show the relevant adoption papers.

Termination Process

Employers can terminate a fix term contract for the following reasons – business, personal or worker misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given with the employee given a chance to explain his/her actions.

When the employer initiates the termination of an employment agreement, the employer must pay final wages on the termination date. If the employee has been employed for more than one month, the employer is obligated to provide a certificate of employment.

Notice Period

Notice periods in Kenya are as follows:

• Employees terminated during the probationary period should be given at least seven days’ notice
• Employees paid on a monthly or longer basis must be given at least 28 days’ notice of termination

Severance Pay

Severance pay is payable at the rate of 15 days for every year worked and is only payable in cases where termination is on account of redundancy. In cases of termination for other reasons other than redundancy, service pay is payable at a rate equal to that of severance pay.

Probation Period

The probation period in Kenya is three to six months. If the employer dismisses the employee during this time, seven days’ notice or payment in lieu must be given.

The New Labour Law, effective from 1/1/2022, stipulates that an apprentice’s base salary shall not be less than 70% of a base salary of a full-time employee performing the same type of work. A probationary worker’s base salary must be the same as the base salary of the same position.

VISA

Kenya’s immigration system provides several options for employers of foreign nationals. Most business travelers must apply for an eVisa to enter the country. Port-of-entry immigration officers will determine the authorized length of stay in Kenya, which is usually a maximum of 30 days, extendable twice for 30 days each at the Immigration Department in Kenya for a maximum of 90 days .

The Special Pass allows foreign nationals to conduct work activities for up to 90 days. Special Pass applications are filed at the Kenya Immigration Department Headquarters before the foreign national travels to Kenya.

The long-term work permit (Class D Permit) is suitable for skilled and experienced professionals or technical workers and it requires sponsorship from a Kenyan legal entity. Work permits are issued for one or two years and can be renewed for similar periods.

General

The standard VAT rate is 16.00%.