🇰🇪 Hiring in Kenya

💡 Everything you need to know to hire and manage employees in Kenya through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 7-10 business days between submitting a new hire and their start date. The employee provides their KRA PIN (tax identification), and Toku completes the social security (NSSF) and health insurance registrations before they start.

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of gross salary, you pay the following employer contributions in Kenya:

As a rule of thumb, total cost of employment is roughly 107-108% of gross salary, and the effective percentage falls for higher earners because the NSSF contribution is capped.

Employees pay their own PAYE income tax (progressive rates from 10% to 35%), a matching 6% NSSF contribution, SHIF health insurance at 2.75% of gross salary, and their own 1.5% Affordable Housing Levy. These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.

Compensation & Payroll

Payroll in Kenya is monthly. Toku runs one payroll per month, and employees receive an itemized payslip each cycle showing gross pay, deductions, and net pay. Salaries are paid in KES by bank transfer.

Kenya sets minimum wages by location and job category through government wage orders. From 1 May 2026, the general minimum wage for unskilled workers in major cities (Nairobi, Mombasa, Kisumu, Nakuru, Eldoret) is KES 18,047.40 per month, with lower rates in other areas starting from around KES 9,268.07 per month. Where housing is not provided, a 15% housing allowance on basic wages applies under the wage orders. There is no statutory 13th month salary.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, covering all the written terms the Employment Act requires.
• Indefinite-term contracts are the default. Fixed-term contracts must state the duration and reason, and repeated renewals can convert the relationship to indefinite employment.
• Probation is 6 months per Toku's employment agreement, which is also the statutory maximum (extendable once only, with the employee's written consent). Notice during probation is 7 days.

Working Hours

The standard working week is 45 hours, with an absolute maximum of 52 hours including overtime, and employees are entitled to at least one rest day in every seven. Overtime is voluntary and paid at 150% of the normal hourly rate on weekdays and 200% on rest days and public holidays.

Leave Entitlements

Public holidays and rest days do not count against annual leave. Sick leave requires a medical certificate, and maternity and paternity leave each require seven days' notice. Bereavement and compassionate leave are not statutory and follow the contract.

Public Holidays (2026)

Kenya observes 10 fixed public holidays, plus Eid al-Fitr and Eid al-Adha on dates confirmed by the government each year. When a holiday falls on a Sunday, the following Monday is observed. Employees who work a public holiday are paid at 200%.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): NSSF pension contributions, SHIF national health insurance, the Affordable Housing Levy, and workers' compensation insurance covering workplace injury.

Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.

Other common extras in Kenya include private group medical insurance, group life and disability cover, supplementary company pension or provident funds, transport and meal allowances, and annual performance bonuses. Non-cash benefits such as housing or company vehicles are generally taxable. Toku can advise on how each of these affects your total cost.

Ending Employment

Kenyan law requires terminations to be both substantively fair (a valid reason such as misconduct, poor performance, or redundancy) and procedurally fair (written notice of the allegations, a hearing, and the right to be accompanied). Unfair termination claims can result in compensation of up to 12 months' wages, so involve Toku early whenever you are considering a termination. For the process, see How to Terminate an Employee or Contractor.

Severance pay applies only to redundancy, at no less than 15 days' pay for each completed year of service. Redundancies also require at least one month's written notice to the employee and the labour officer, plus fair selection criteria. Employees on maternity or sick leave are protected from termination.

Hiring Someone from Overseas?

Foreign nationals need a work permit, most commonly the Class D permit for employment with a specific employer, and the employer must show the role cannot be filled by a Kenyan national. Processing typically takes 4-8 weeks and can stretch to 3 months, and applicants need proof of qualifications, a job offer, and a certificate of good conduct. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.