How to hire and pay employees in Kenya

Map pin in green circle

Kenya Facts and Stats

Currency

Kenyan Shilling is the official currency of Kenya Its currency symbol is KES.

Employer Costs

Estimated at 8.4% of employees salary.

Languages

The official languages are Swahili and English.

Population

The population is around 51 Million.

Payroll frequency

Employees are paid monthly.

Hiring

Grow your team in Kenya

No entity, no problem

To start growing your team in Estonia, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.

Emerald can hire and payroll your workers quickly and compliantly with their ‘ready to go’ entity. Make growing your team simple with Emerald as a global partner.

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

Pros & Cons of hiring in Kenya

Hiring employees in Kenya offers both significant advantages and some challenges. The country provides access to a young, educated workforce with a growing number of skilled professionals in fields like technology, finance, and engineering, thanks to the expanding educational sector and tech ecosystem. Labor costs in Kenya are relatively low compared to Western countries, leading to potential cost savings for employers. Additionally, Kenya’s strategic location in East Africa makes it a hub for regional operations and business expansion. However, employers must navigate a complex regulatory environment and potential bureaucratic hurdles, which can be time-consuming and require local expertise. Infrastructure, while improving, can be inconsistent, especially in rural areas, potentially impacting business operations. Moreover, while English is widely spoken, regional language differences and varying levels of proficiency may pose communication challenges. Overall, Kenya presents valuable opportunities but requires careful consideration of these factors for successful hiring and operation.

Why Kenya is good for remote workers

Hiring remotely in Kenya offers several specific benefits. First, Kenya has a burgeoning tech sector with a strong pool of IT professionals and software developers, especially in Nairobi’s “Silicon Savannah.” This provides access to skilled talent in emerging technologies at competitive rates. Additionally, the lower cost of living in Kenya means that remote employees often work for lower salaries compared to their counterparts in Western countries, which can lead to cost savings for employers. Kenya’s time zone aligns reasonably well with European and Middle Eastern business hours, facilitating real-time communication and collaboration. The country’s advanced mobile and internet infrastructure supports efficient remote work, and the growing emphasis on digital literacy means that employees are generally adept with remote working tools and practices. This combination of skilled labour, cost-effectiveness, and technological readiness makes Kenya an attractive option for remote hiring.

Start growing your remote workforce now

Employer Costs
National Social Security Fund (NSSF):6%.
National Hospital Insurance Fund (NHIF):1.5%.
Work Injury Benefits Act (WIBA):0.9%.
Employment

Probation

Typically, 3 to 6 months.

Emerald Technology can onboard employees in Kenya within 48 hours.

Restrictive Covenants

In Kenya, restrictive covenants in employment contracts are permissible but must be reasonable and specific to be enforceable. The key types of restrictive covenants include:
Non-Compete Clauses:
Scope: Must be reasonable in terms of geographic area, duration, and the type of business activities restricted. Typically, non-compete clauses should not exceed 1 to 2 years in duration.
Legitimate Business Interest: The covenant must protect legitimate business interests such as trade secrets, proprietary information, or client relationships.
Non-Solicitation Clauses:
Clients and Customers: Employees may be restricted from soliciting the company’s clients or customers for a specified period after leaving the company.
Employees: Employees may also be prohibited from soliciting current employees to join a competing business.
Confidentiality Agreements:
Scope: Employees are restricted from disclosing confidential or proprietary information obtained during their employment. These agreements typically last as long as the information remains confidential.

Insurance
01.

Health Insurance:

The National Hospital Insurance Fund in Kenya aims to provide affordable health insurance coverage for all Kenyans, making healthcare accessible and reducing out-of-pocket healthcare costs. This system can be accessed by all citizens and residents of Kenya and it covers various healthcare services such as chronic illness management, maternity services and preventive services. Employees contribute a fixed monthly amount based on their salary per month, alongside employer contributions.

02.

Social Security Contributions:

In Kenya, the National Social Security Fund manages all social security contributions which provide pension, disability, and survivor benefits, and also occupational safety and health. It is mandatory for employees and employers in the formal sector to contribute 6% of the gross salary. For employee contributions, there is a minimum contribution of KSh 200 per month.

Leave Policy
01.

Maternity Leave:

In Kenya, female employees are entitled to 90 days of paid maternity leave. During this period, employees receive their full salary. Additionally, the leave can start up to 30 days before the expected delivery date and continues up to 60 days after childbirth.

02.

Paternity Leave:

In Kenya, fathers are entitled to 14 days of paid paternity leave.

03.

Parental Leave:

There is no mandatory parental leave in Kenya.

04.

Sickness Leave:

Every employee is entitled to paid sick leave for up to 14 days per year, after completion of 2 months of service with an employer. The employer should pay fully for the first 7 days, after which they should pay 50% of the employee’s average salary.

Onboarding

Onboarding

As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:

Emerald Technology can onboard employees in Kenya within 48 hours.
Termination

Resignation and Dismissal

When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:

Notice Periods:

1 month on a salary, 7 days on probation.

Severance

If an employee is made redundant, they are entitled to a payment based on years of continuous service.

Severance Pay:

In Kenya, severance pay is typically provided at the rate of 15 days’ wages for each completed year of service, calculated based on the employee’s last salary. This applies to employees whose contracts are terminated due to redundancy or other specified reasons.

Time off

Statutory Time off

In Kenya, employees are entitled to a minimum of 21 days of paid annual leave per year.

Public Holidays

  • New Year’s Day.
  • Good Friday.
  • Easter Monday.
  • Idd ul-Fitr.
  • Labor Day.
  • Madaraka Day.
  • Idd ul Azha.
  • Moi Day/Utamaduni Day.
  • Mashujaa Day.
  • Independence Day/Jamhuri Day.
  • ChristmasBoxing Day.
  • Christmas Holiday.
Emerald Technology can onboard employees in Kenya within 48 hours.
Salary / Taxes

Work, Pay and Taxes

01.

Minimum Wage:

84 KES per hour.

02.

Working Time and Overtime:

In Kenya, the standard working week is 48 hours, typically spread over six days with an 8-hour workday. In Kenya, overtime is compensated as follows:

Normal Working Days: Overtime is paid at 150% of the regular hourly rate for hours worked beyond the standard 48-hour workweek.

Rest Days and Public Holidays: Overtime on rest days or public holidays is paid at 200% of the regular hourly rate.

03.

Salary Payments:

Monthly.

04.

Bonuses in Kenya:

There is no mandatory bonus laws.

05.

Income Tax:

  • Up to 288,000: 10%,
  • 288,001 to 388,000: 15%,
  • 388,001 to 688,000: 20%,
  • 688,001 to 1,188,000: 25%,
  • Above 1,188,000: 30%.
Group 1977

Enquire about our global hiring solutions

Start a conversation on how we can assist you to grow your remote team.

Hiring Guide Form