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Hiring in Kenya

Hiring employees compliantly in Kenya means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Kenya so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Kenya; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Need assistance hiring in Kenya? Contact us about our International EOR Service

Labor Laws in Kenya

Employment laws in Kenya are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Kenya employment laws and Kenya policies here.

Employee Probation Period

  • According to Employment Act, Probationary contract is an employment contract of up to twelve months’ duration or part thereof. 
  • It must be written and expressly states that it is for a probationary period.

Annual Leave in Kenya

  • Every employee is entitled to 21 annual leave days after one year of service to the company, with full pay.
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Holidays in Kenya

Kenya celebrates thirteen national public holidays as well as additional public holidays that vary by state:

New Year’s Day 1st January
Funeral of Former President Daniel arap Moi 11th February
Good Friday 10th April
Easter Monday 13th April
Labor Day 1st May
Eid al-Fitr  
Madaraka Day 1st June
Eid al-Adha  
Huduma Day 10th October
Mashujaa Day 20th October
Jamhuri Day 12th December
Christmas Day 25th December
Utamaduni Day 26th December

 

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Maternity Leave Kenya

  • Female employees are entitled to 2 months of paid leave (provided employee forfeits annual leave).

Paternity Leave Kenya

  • Employment Act provides for two weeks/14 working days of paid paternity leave.

Sick Leave in Kenya

  • Employees are generally entitled to 14 days of paid sick leave per year. 
  • Employees must provide a medical certificate. 
  • The first 7 days are paid at 100%, the remaining days are paid at 50%.

Working Hours in Kenya

  • The work week in Kenya is generally 52 hours per week and 60 hours per week (night workers)

Overtime in Kenya

  • An employer is required to pay at least 150% of the wage if overtime work is performed during normal working hours. 
  • Overtime payment for the workers that are not employed on hourly basis, is calculated on the basis of the basic hourly rate of at least one two-hundred-and twenty-fifth of the employee’s basic minimum monthly wage. 
  • The Wages Order also specifies that overtime plus time worked in normal hours per week may not exceed 116 hours in total in any period of 2 consecutive weeks. 
  • Thus a worker can work only 6 hours of overtime in a week. 
  • For night workers this limit is 144 hours per week. 
  • For night workers, 12 hours of overtime is allowed.

Termination of Employment in Kenya

  • Termination of employment is regulated under the Employment Act. 
  • A worker may be terminated after serving due notice or paying in lieu of notice. 
  • Length of notice period depends on the type of employment contract.
  • Notice period is not provided for a worker hired on daily basis; contract may be terminated at the end of working day without any prior notice
  • At least seven days’ notice for workers during the probationary period (or payment in lieu of notice)
  • Length of notice period may be set in employment contract by mutual consent of employer and worker, provided that the period is more than that is provided by the Act. 
  • Notice should be written in language easily comprehended by the worker, otherwise someone has to explain it to the worker, orally, in language that he/she could comprehend.
  • There is no provision for severance pay in legislation for reasons other than redundancy.
  • Redundancy means the loss of employment by involuntary means through no fault of a worker, involving termination of employment at the initiative of the employer, where the services of a worker are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment.
  • Severance pay, paid by the employer, in Kenya is equivalent to 15 days’ basic wages for each completed year of employment.

Notice Period in Kenya

  • Length of notice period depends on the type of employment contract.
    • 7 days notice for workers during the probationary period (or payment in lieu of notice)
    • Workers who get paid periodically for intervals shorter than one month (e.g. on weekly or fortnightly basis), a notice of equivalent period (a week or 15 days) may be served prior to contract termination
    • If workers are paid on a monthly basis or longer interval, a 28-day notice must be served before contract termination

Severance in Kenya

  • There is no provision for severance pay in legislation for reasons other than redundancy.
  • Severance pay, paid by the employer, in Kenya is equivalent to 15 days’ basic wages for each completed year of employment.

Kenya Salary and Wages

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13th/14th Month Salary in Kenya

  • No
  • There is no statutory requirement to pay the 13th or the 14th month salary.
  • Employees are entitled to 21 days full pay.
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Income Tax in Kenya

  • Resident employees are taxed on worldwide earned income, in respect of any employment or services rendered in Kenya or outside Kenya. 
  • Residents are also taxed on any other income that has accrued in or is derived from Kenya.
  • Non-resident employees are taxable only on their income earned from within Kenya or derived from Kenya.
  • The tax rates applied to taxable income are tabulated below.
  • The tax rates applicable to taxable income are tabulated as follows:

Annual taxable income (KES)

Tax rate (%)

On the first 288,000

10

On the next 100,000

25

On all income over 388,000

30

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Social Security in Kenya

  • National Social Security Fund (NSSF) contributions
  • The NSSF has to undergo drastic transformation following the enactment of the NSSF Act 2013, which became effective from 10 January 2014. 
  • However, the implementation of the new Act awaits conclusion of a pending court case.
  • In the meantime, NSSF contributions are as per the provisions of the old Act (i.e. KES 200 for employer and KES 200 for employee).
  • National Hospital Insurance Fund (NHIF) contributions
  • Employees in Kenya are required to contribute to the NHIF. 
  • There is no corresponding employer contribution.
  • The contributions are graduated, with the maximum contribution currently being KES 1,700 per employee for employees earning more than KES 100,000 per month.

Contribution

Employer

Employee

National Social Security Fund (NSSF)

KES 200

KES 200

National Hospital Insurance Fund (NHIF)

-

KES 1,700

Immigration Kenya

  • Certain classes of entry permits allow foreign nationals to work in Kenya and are generally referred to as work permits. 
  • An entry permit that allows a foreign national to work in Kenya is obtained by an employer on behalf of a foreign national. 
  • Employers are required to justify employment of a foreign national instead of a Kenyan. If the foreign national changes employment, his or her new employer is responsible for obtaining a new work permit. 
  • Individuals requiring entry permits may enter Kenya on visas or visitors’ passes while their applications for the permits are being processed, but they cannot engage in any work-related or income generating activities. 
  • Foreign nationals who are over 18 years of age and stay in the country for more than 90 days are required to register as foreigners. 
  • Different classes of entry permits are issued in Kenya including permits for the following categories of expatriates:
    • Class A, which is issued to a person engaged in prospecting for minerals and mining in Kenya. 
    • Class C, which is issued to a member of a prescribed profession who intends to practice that profession in Kenya, alone or in partnership. 
    • Class D, which is issued to a person who is offered specific employment by a specific employer. 
    • Class G, which is issued to a person who intends to engage, alone or in partnership, in a specific trade, business or profession (other than a prescribed profession) in Kenya.
  • The permits are issued only to persons whose employment, business or presence will benefit the country. 
  • A foreign national wishing to carry out business in Kenya must obtain the necessary licenses and registrations required and must have sufficient capital or resources for investment.
Need assistance hiring in Kenya? Contact us about our International EOR Service

Type of Visa/Permit

Documentation

Validity

Eligibility

Class C

  • Duly filled and signed Form 25 online form.
  • Two copies of detailed and signed cover letter from the employer /self /organization, addressed to the Director of Immigration Services
  • Copies of valid national passport
  • Two (2) recent passport size colored photos (for both new and renewal)
  • Current Immigration status if in the country
  • Documents in foreign languages should be translated into English by either the Embassy, Public Notary, or authorized /recognized institution
  • Copy of any previous permit(s) and or pass (es) held
  • Tax compliance certificate from KRA (for renewals)
  • Proof of membership to a prescribed profession
  • Copies of certified academic and professional certificates (qualifications)
  • Curriculum vitae (CV)
  • Copy of PIN certificate
  • Processing fees non-refundable (Kshs. 10,000/=)
  • Valid Organization Tax Compliance Certificate for new cases, and both valid organization and individual Tax Compliance Certificates for renewal cases.

2 years (renewable)

  • This permit is issued to a person who is a member of a prescribed profession who intends to practice that profession, whether alone or in partnership, in Kenya, and who –
  • Possesses the prescribed qualification (Eighth schedule of The Kenya Citizenship and Immigration Regulations, 2012)
  • Has in his/her own right and at his/her full and free disposition sufficient capital and other resources
  • Is registered with the professional body, association or institute to which he/she belongs in his/her own country; and
  • Whose practice of that profession will be of benefit to Kenya

Class D

  • Duly filled and signed Form 25
  • Two copies of detailed and signed cover letter from the employer/organization/ self, addressed to the Director of Immigration Services
  • Copies of valid national passport
  • Two(2) recent passport size colored photos (for both new and renewal)
  • Current Immigration status if in the country
  • Documents in foreign languages should be translated into English by either the Embassy, Public Notary, or authorized /recognized institution
  • Copy of any previous permit(s) and or pass (es) held
  • Duly certified copies of academic and professional certificates.
  • Curriculum vitae.
  • Duly filled and signed Form 27(Report on Employment)
  • Name of the Kenyan understudy
  • Certified copies of academic/professional certificates and full contracts of the Kenyan understudy
  • Curriculum vitae (CV) for the Kenyan understudy.
  • Full contact-address, email, cell phone, of the Kenyan understudy
  • Clearance letter from relevant institutions.
  • Certificate of company / organization registration.
  • Valid organization Tax Compliance Certificate for new cases, and both organization and individual Tax Compliance Certificates for renewals cases from KRA
  • Processing fees nonrefundable (Kshs. 10,000)

2 years (renewable)

  • This permit is issued to a person who is offered specific employment by a specific employer, the government of Kenya or any other person or authority under the control of the Government or an approved technical aid scheme under the United Nations Organization or some other approved Agency (not being an exempted person under section 34 (3), who is in possession of skills or qualifications that are not available in Kenya and whose engagement in that employment will be of benefit to Kenya.

Class G

  • Duly filled and signed Form 25
  • Two copies of detailed and signed cover letter from the employer/ self /organization, addressed to the Director of Immigration Services
  • Copies of valid national passport
  • Two (2) recent passport size colored photos (for both new and renewal)
  • Current Immigration status if in the country
  • Documents in foreign languages should be translated into English by either the Embassy, Public Notary, or authorized /recognized institution
  • Copy of any previous permit(s) and or pass (es) held
  • Duly filled form 27
  • Documentary proof of capital to be invested at least USD 100,000
  • Certificate of incorporation of the company
  • Memorandum of understanding
  • Articles of association
  • Shareholding certificate (CR 12)
  • Copies of PIN certificate
  • Signed current audited accounts (for renewals)
  • List of Kenyans already employed (for renewals)
  • Clearance letter from relevant institutions.
  • Two copies of bank statement verification form (For new cases). Click here to download the verification form.
  • Provide a proof of offshore transaction receipt / slip.
  • Processing fees non-refundable (Kshs. 10,000/=)
  • Valid Organization Tax Compliance Certificate for new cases, and both valid organization and individual Tax Compliance Certificates for renewal cases.

2 years (renewable)

  • This permit is issued to a person who intends to engage, whether alone or in partnership, in a specific trade, business, consultancy or profession (other than a prescribed profession) in Kenya, and who;
  • Has obtained any license, registration or other authority or permission that may be necessary for the purpose;
  • Has in his/her own right and at his/her full and free disposition sufficient capital and other resources for the purpose;
  • Whose engagement in trade, business, consultancy or profession will be of benefit to Kenya.
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Value Added Tax (VAT) in Kenya

  • VAT is levied at a standard rate of 16% on the supply of taxable goods and services in Kenya, as well as on the importation of taxable goods and services into Kenya.
  • Exempt supplies include financial services provided by banks and most agricultural produce in their processed or preserved state.
  • Petroleum products are subject to VAT at a rate of 8%.

VAT

Standard Rate

Group 1083

16%

Reduced Rate

Group 1083

8%

zero Rate Group 1083 0%
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Mandatory Benefits in Kenya

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity overtime pay, notice period, and severance pay
  • Statutory benefits also include social security benefits
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Mandatory Benefits overview

  • Probationary period

  • Annual Leave

  • Public Holidays

  • Maternity Leave

  • Paternity Leave

  • Sick Leave

  • Overtime Pay

  • Notice period

  • Severance Pay

  • Social Security Benefits

Payments And Invoicing 

  • The year of income is a calendar year.
  • Individual self-assessment tax returns must be filed by 30 June in the year following the year of income. 
  • Spouses can file separate self-assessment returns.
  • The majority of tax on employees is paid by withholding from salaries and benefits under the PAYE system. 
  • Any further tax liability is based on self-assessment, and it must be paid by 30 April following the year of income to which the liability relates.
  • An individual (other than one whose total taxable income has been subjected to tax at source) whose tax liability exceeds KES 40,000 per annum is required to pay four instalment taxes by 20 April, 20 June, 20 September, and 20 December. 
  • The instalment tax payable on each due date is 25% of the lower of 110% of tax assessed in the prior year or the taxpayer's estimate of the current year's tax liability.

Payroll Accrual in Kenya

Country Accruals Additional Information

National social security fund 12.00%
Maternity 2months
Vacations 7.67%
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Description

The NSSF was set to undergo drastic transformation following the enactment of the NSSF Act 2013, which became effective from 10 January 2014. However, the implementation of the new Act awaits conclusion of a pending court case. In the meantime, NSSF contributions are as per the provisions of the old Act (i.e. KES 200 for employer and KES 200 for employee).

Payroll Accruals Additional Information

    Employment Accruals
Annual Leave Every employee is entitled to 21 annual leave days after one year of service to the company, with full pay. This equals 5.75% (21/365 days) of annual income
Maternity Leave A female employee is entitled to three months’ maternity leave in addition to any period of annual leave she is entitled to, and sick leave if she happens to fall sick during her time of confinement and with the consent of the employer. This equals 25% (3/12 months) of annual income
Paternity Leave Employment Act provides for two weeks/14 working days of paid paternity leave. This equals 3.84% (2/52 weeks) of annual income
Sick Leave Employees are generally entitled to 14 days of paid sick leave per year.
Employees must provide a medical certificate.
The first 7 days are paid at 100%, the remaining days are paid at 50%.
This equals 1.91% (7/365 days) of annual income. Plus 50% of 1.91% of annual income
Overtime An employer is required to pay at least 150% of the wage if overtime work is performed during normal working hours. Depends on the number of overtime hours worked
Severance Severance pay, paid by the employer, in Kenya is equivalent to 15 days’ basic wages for each completed year of employment. This equals 4.1% (15/365 days) of annual income
Social Security Employers must contribute KES 200 to the National Social Security Fund (NSSF) This equals KES 200

Accrued Benefits in Kenya

Christmas Bonus % 0%
Christmas Bonus Over Vacations % 0%
Severance per Year%

Employees are entitled to severance pay that equals 15 days of pay for each completed year of service (4.28% of annual salary)

4.28%
Vacations %

Every employee is entitled to 21 days of annual leave days after one year of service (5.76% of annual salary)

5.76%
Notice %

Employees are entitled to 28 days of notice period for one year of service or more (7.26%)

7.26%
Christmas Bonus Over Notifications % 0%
Vacations Plus %

Note the employer need to make provisions to cover the employee's rent and/or provide accommodation (Art 31)

 

Total percentage of Salary (yearly)

The total employment accruals as a percentage of salary per anum are equal to 17.3%

17.3%

Why use Global Expansion to hire in Kenya

Establishing a branch office or subsidiary in Kenya can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Kenya's labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Kenya law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Kenya. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Kenya Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.

 

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