Easily manage employment in Kenya

Payroll services in Kenya

Kenya has a growing economy with key industries in agriculture, telecommunications, and financial services. With specific labor laws and tax regulations, employers in Kenya must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Kenya

Employers in Kenya must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Kenya’s minimum wage varies by industry and location, with the lowest set at KES 15,201 per month.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in Kenya is 45 hours, typically spread over five or six days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 150% of the regular wage for extra hours and 200% for work on public holidays.

Taxation and social security contributions

• Personal income tax: Kenya has a progressive income tax system with rates ranging from 10% to 30% depending on income levels.
• Employer contributions:
• National Social Security Fund (NSSF): 6% of the gross salary.
• National Hospital Insurance Fund (NHIF): Varies based on income levels.
• Housing Levy: 1.5% of the gross salary.
• Employee contributions:
• National Social Security Fund (NSSF): 6% of the gross salary.
• National Hospital Insurance Fund (NHIF): Varies based on income levels.
• Housing Levy: 1.5% of the gross salary.
• Corporate tax: The corporate income tax rate in Kenya is 30% for resident companies and 37.5% for non-resident companies.
• Tax reporting: Employers must file payroll taxes and contributions with the Kenya Revenue Authority (KRA) regularly.

Payroll compliance in Kenya

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security, health insurance, and income tax.
• Employers must stay updated on changes to Kenya’s labor laws and tax regulations to avoid penalties.

Run payroll in Kenya with Remote

Managing payroll in Kenya requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.