Country Overview
Kenya is an East African nation known for its vibrant cities, stunning landscapes, and a growing role as a regional business hub. The country attracts expatriates for its dynamic economy — particularly Nairobi, a leading tech and finance hub — its English-speaking environment, and its natural beauty, from savannahs to highland climates and coastal beaches.
Kenya hosts many multinational companies and NGOs, making it a regional hub for foreign professionals. Approximately 2% of the population (around 1 million people) are international migrants. English and Kiswahili are the official languages, which makes integration relatively smooth for international teams. All non-citizens require a valid Work Permit or Special Pass to engage in gainful employment, administered by the Department of Immigration Services.
*This guide is intended for general informational purposes only and should not be viewed as legal or tax advice. The information discussed may change frequently, and Access Financial cannot guarantee that all content remains current at all times.
2026 Key Legislative Updates
NSSF Year 4 rates took effect 1 February 2026, with the Upper Earnings Limit rising to KES 108,000 and the maximum employee contribution increasing to KES 6,480 per month. SHIF (at 2.75% of gross salary) continues to replace the former NHIF. The Affordable Housing Levy remains at 1.5% on both employee and employer. A 12% general minimum wage increase was announced on Labour Day 2026 (gazettement pending).
Contracts
Kenyan employment contracts are governed by the Employment Act 2007 and define type, duration, notice, pay, and benefits. All employees engaged for more than three months are entitled to a written contract of service.
Contract Types
| Contract Type | Duration | Key Features |
|---|---|---|
| Permanent (Indefinite) | Indefinite | Open-ended; highest job security; full statutory benefits; typically includes a probation period |
| Fixed-Term | Specified end date | Ends on a date or project completion; same leave and benefits as permanent during the term |
| Casual | Day-to-day | Not exceeding 24 hours engagement; converts to a term contract after one month of continuous service |
| Consultancy / Self-Employed | As per contract | Governed by contract law; consultant responsible for own taxes and Class G permit if foreign |
Fixed-Term Renewals and Expectation of Permanency
Kenyan law does not cap the length of a fixed-term contract, but where renewals become serial, an employee may successfully claim a legitimate expectation of permanency. Many employers convert long-term contractors to indefinite status earlier to retain talent and reduce litigation risk.
What Your Contract Must Include
Mandatory Particulars
- Job title and description
- Start date and contract duration (if fixed-term)
- Salary or wage rate and pay frequency
- Working hours and place of work
- Annual leave entitlement
- Notice period (both sides)
- Sick leave and SHIF entitlement
- NSSF and pension scheme details
Common Additional Clauses
- Confidentiality / NDA provisions
- Intellectual property assignment
- Restrictive covenants (non-compete, non-solicit)
- Housing, transport or car allowance
- Bonus and commission structure
- Repatriation benefits (for expatriates)
- Disciplinary and grievance procedure reference
Access Financial drafts Kenyan-compliant employment contracts and manages onboarding for EOR engagements.
Working Hours & Overtime
The Employment Act 2007 and sector-specific Wages Orders govern working hours, rest breaks and overtime in Kenya. The standard working week typically ranges from 40 to 52 hours depending on the industry, with most offices operating Monday to Friday, 8 hours per day.
| Parameter | Rule | Notes |
|---|---|---|
| Standard working week | 40 – 52 hrs | Most offices: Mon–Fri, 8 hrs/day, often 8:00am–5:00pm |
| Maximum (general) | 48 hrs/week | Implied 8 hrs/day, 6 days/week upper bound |
| Weekly rest | At least 1 day | One rest day per week (typically Sunday) |
| Overtime — weekdays | 1.5× normal rate | For hourly workers and most Wages Orders |
| Overtime — rest day / public holiday | 2× normal rate | Double pay for work on a rest day or public holiday |
| Night work (10pm–6am) | Min. 1.2× hourly rate | If no time off in lieu is provided |
Overtime for Salaried Staff
For salaried staff, many companies provide time off in lieu or include a clause stating that salary is “inclusive of reasonable overtime”, particularly for management roles. Always check what your contract says.
Probation Period
The Employment Act 2007 allows probation of up to 6 months, extendable to 12 months with the employee’s written consent. During probation, the stringent unfair dismissal procedure does not fully apply, though basic fairness and notice obligations remain.
| Parameter | Standard practice | Legal notes |
|---|---|---|
| Typical duration | 3 – 6 months | Maximum 6 months; extendable to 12 with written consent |
| Notice during probation | 7 days | Or pay in lieu; applies to both employer and employee |
| Apprentices’ pay | Min. 70% of full role | 2022 Labour Law parity requirement |
| Day-one statutory rights | From day one | Minimum wage, NSSF, SHIF, AHL, leave accrual, non-discrimination |
Immigration & Work Visas
Kenya operates a structured immigration system managed by the Department of Immigration Services under the Ministry of Interior. All non-citizens must hold a valid Work Permit or Special Pass to engage in employment in Kenya. East African Community (EAC) nationals enjoy freedom of movement and simplified processes.
eVisa & eTA System
Kenya offers single-entry eVisas (typically 90 days) for most nationalities, obtainable online via the eCitizen portal before travel. An entry visa does not authorise work — gainful employment requires a Work Permit or Special Pass approved by the Department of Immigration Services.
Main Work Permit Classes
| Permit Class | Purpose | Sponsor? | Duration |
|---|---|---|---|
| Class D — Employment | Salaried employment with a specific Kenyan employer | Yes | Up to 2 years; renewable |
| Class G — Investor / Self-Employed | Investors, entrepreneurs, independent consultants | No (capital req.) | Up to 2 years; renewable |
| Class A / B | Prospecting and mining (A); agriculture (B) | Land/concession | Up to 2 years |
| Class I | Missionaries, NGO and charitable workers | Endorsing body | Up to 3 years |
| Special Pass | Short-term assignments under 6 months | Engaging entity | Up to 6 months |
AF’s immigration team supports contractors and corporate clients relocating to Kenya. We handle Work Permits, Special Passes and KRA PIN registrations end-to-end.
Leave Entitlements
Kenyan statutory leave is set out in the Employment Act 2007. Most professional employers offer enhanced benefits above the statutory floor.
Annual Leave
| Parameter | Entitlement | Notes |
|---|---|---|
| Statutory minimum | 21 working days/yr | After 12 months of continuous service; accrues ~1.75 days per month |
| Public holidays | Additional | Do not count against annual leave |
| Leave pay | Normal remuneration | Paid at the employee’s usual rate of pay |
Parental Leave
| Leave type | Duration | Pay | Funded by |
|---|---|---|---|
| Maternity | 3 months (90 days) | 100% of salary | Employer |
| Paternity | 2 weeks (14 days) | 100% of salary | Employer |
| Adoption / Pre-Adoptive | 1 month | 100% of salary | Employer |
Sick Leave
| Parameter | Rule |
|---|---|
| Statutory entitlement | 7 days full pay + 7 days half pay (14 days/yr) |
| Qualifying period | After 2 consecutive months of service |
| Medical certificate | Required from a registered medical practitioner |
| Market practice | Many employers offer up to 30 days full pay + 15 days half pay |
Public Holidays 2026
Kenya observes approximately 11 national public holidays. If a holiday falls on a Sunday, the following Monday is observed as a substitute.
| Date | Day | Holiday |
|---|---|---|
| 1 January | Thursday | New Year’s Day |
| 20 March | Friday | Idd ul-Fitr (subject to moon) |
| 3 April | Friday | Good Friday |
| 6 April | Monday | Easter Monday |
| 1 May | Friday | Labour Day |
| 27 May | Wednesday | Eid al-Adha (subject to moon) |
| 1 June | Monday | Madaraka Day |
| 10 October | Saturday | Mazingira Day |
| 20 October | Tuesday | Mashujaa Day |
| 12 December | Saturday | Jamhuri Day |
| 25 December | Friday | Christmas Day |
| 26 December | Saturday | Utamaduni Day (Boxing Day) |
Notice Periods
Statutory minimum notice in Kenya is set by the Employment Act 2007 and depends on how the employee is paid. Most professional contracts specify longer notice periods.
| Pay frequency | Minimum notice | Notes |
|---|---|---|
| Daily-paid | 1 day | Or pay in lieu |
| Weekly-paid | 1 week | Or pay in lieu |
| Monthly-paid | 28 days (1 month) | Most common; or pay in lieu |
| During probation | 7 days | Applies to both parties |
| Senior / executive roles | 2 – 3 months | Contractual; honoured by both parties |
Termination & Redundancy
Kenyan employment law provides significant employee protections. At-will employment is not recognised — dismissals must follow fair processes with a valid reason and proper procedure under Section 41 of the Employment Act, or the employee may claim unfair termination at the Employment and Labour Relations Court.
| Termination type | Process | Pay due |
|---|---|---|
| Summary dismissal | Section 41 hearing required; gross misconduct only | Days worked + accrued leave |
| Termination with notice | Fair reason + fair procedure required | Notice or pay in lieu + accrued leave |
| Redundancy | 1 month notice to Labour Office & employee/union | Notice + 15 days/yr severance + accrued leave |
| Resignation | Employee gives contractual notice | Salary to last day + accrued leave |
Procedural Fairness Is Critical
Even with a valid reason, failing to conduct a Section 41 hearing (notification of charges, opportunity to respond, right to representation) usually results in a finding of unfair dismissal and an award of up to 12 months’ salary in damages. Maintain documented disciplinary records — AF can advise.
Income Tax
Kenya’s tax year runs from 1 January to 31 December. All employees are taxed via Pay-As-You-Earn (PAYE) — employers deduct tax at source through monthly payroll and remit to the Kenya Revenue Authority (KRA) by the 9th of the following month.
PAYE Tax Bands 2026 (Monthly)
| Band | Monthly Income (KES) | Rate |
|---|---|---|
| 1st | Up to 24,000 | 10% |
| 2nd | 24,001 – 32,333 | 25% |
| 3rd | 32,334 – 500,000 | 30% |
| 4th | 500,001 – 800,000 | 32.5% |
| 5th | Above 800,000 | 35% |
Tax Residency Threshold
You are tax-resident in Kenya if you spend 183+ days in a calendar year, or an average of 122 days across the current year and the two preceding years. Non-residents pay a flat 30% on Kenyan-source employment income with no personal relief.
VAT
| Rate | % | Applies to |
|---|---|---|
| Standard | 16% | Most goods and services |
| Reduced | 8% | Petroleum products (under select provisions) |
| Zero | 0% | Exports, certain agricultural inputs, key foodstuffs |
| Exempt | — | Education, financial services, residential rent |
| Registration threshold | KES 5,000,000 | Annual turnover above which VAT registration is mandatory |
Let Access Financial handle your Kenyan payroll — PAYE, NSSF, SHIF, AHL and statutory reporting, with local specialists on call.
Benefits
Kenya’s statutory benefits are administered through NSSF, SHIF and employer-paid statutory leave. Competitive employers layer supplemental benefits to attract and retain professional talent, particularly in finance, technology, and NGO sectors.
Mandatory Statutory Benefits
| Benefit | Rate / Amount | Notes |
|---|---|---|
| NSSF (combined) | 12% total | 6% employee + 6% employer; up to KES 12,960 combined |
| SHIF (Healthcare) | 2.75% | Of gross salary; min KES 300; no cap |
| Affordable Housing Levy | 3% total | 1.5% employee + 1.5% employer |
| Annual Leave | 21 working days/yr | After 12 months continuous service |
| Maternity Leave | 3 months full pay | Employer-funded |
| Paternity Leave | 2 weeks full pay | Employer-funded |
| Sick Leave | 7 days full + 7 days half | After 2 months of service |
| Redundancy Pay | 15 days/yr of service | Statutory minimum on redundancy |
Market-Standard Supplemental Benefits
| Benefit | Prevalence | Typical provision |
|---|---|---|
| Private Medical Insurance | Very common (professional roles) | Jubilee / AAR / Britam / AON Minet |
| Life Assurance | Common | 3–4× annual salary (Group Life) |
| Group Personal Accident | Common | Lump sum on injury or death |
| Private Pension Scheme | Common (medium & large employers) | 5–10% employer + employee contribution |
| Housing Allowance | Standard for senior / expat roles | ~15% of basic pay or company-provided housing |
| Transport / Car Allowance | Common | Monthly stipend or company car |
| Education Allowance (expats) | Senior expat packages | Covers international school fees |
| 13th-Month Bonus | Common practice | Holiday bonus (not statutory) |
Pension System
Kenya operates a two-tier system: the National Social Security Fund (NSSF) is the statutory base, and many employers add a registered occupational pension scheme on top. The Retirement Benefits Authority (RBA) regulates the private pension sector.
| Parameter | 2026 Value | Notes |
|---|---|---|
| NSSF Tier I | 6% / 6% | On first KES 9,000; max KES 540 each side |
| NSSF Tier II | 6% / 6% | On KES 9,001–108,000; max KES 5,940 each side |
| Max employee NSSF | KES 6,480/mo | Effective 1 February 2026 (Year 4 rates) |
| Statutory retirement age | 60 | Public sector; private sector varies |
| Early withdrawal age | 50 | With reduced benefit access |
| NSSF + pension tax deduction | Up to KES 30,000/mo | Combined cap; KES 360,000/year |
| Tax-free lump sum | KES 600,000 | On retirement after age 50 |
Insurances
Mandatory and recommended insurances for employers, employees, and contractors operating in Kenya.
| Insurance | Cover | Required by |
|---|---|---|
| WIBA (Work Injury Benefits) | Statutory schedule | Work Injury Benefits Act 2007 |
| SHIF (Public health) | 2.75% of gross salary | Social Health Insurance Act 2023 |
| Motor Insurance | Third party minimum | Insurance (Motor Vehicles Third Party Risks) Act |
| Group Life (where in scheme) | Per scheme | OSHA + market practice |
Professional Indemnity Insurance — Contractors & Regulated Professions
Often required by regulatory boards or end-clients in regulated professions (medicine, law, engineering, architecture). Covers negligence claims arising from professional services. Financial services and technology contractors typically require USD 1M+ cover. AF can advise on appropriate PI insurance for your sector.
Private Health Insurance
| Provider | Typical monthly cost | Type |
|---|---|---|
| Jubilee Health | KES 6,000–18,000 (individual) | Comprehensive inpatient + outpatient |
| AAR Insurance | KES 5,500–16,000 (individual) | Comprehensive with clinic network |
| Britam Health | KES 6,500–17,000 (individual) | Comprehensive with optional dental/optical |
| AON Minet / international plans | USD 200–500 (individual) | Includes international evacuation |
AF Solutions
Access Financial supports end-clients, recruitment agencies, and contractors operating in Kenya — handling payroll, contract management, tax compliance, and immigration end-to-end.
For End-Clients
Managing a contingent workforce in Kenya can be complex. Our solutions streamline workforce management, making it simple, compliant, and cost-effective.
For Recruiters
We offer a complete suite of services, allowing you to simply, compliantly, and efficiently place your candidates in Kenya, with minimum fuss.
For Contractors
Focus on what you do best and let us take care of your payroll, tax compliance, social security, and immigration needs in Kenya.
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FAQ
Find answers to our most frequently asked questions below.
What solutions do you offer in Kenya?
In Kenya, Access Financial provides one compliant engagement model:
Employed/EOR (umbrella): We become the legal employer of your employees in Kenya. Your business retains full control of the day-to-day work and deliverables, while we carry the employment, payroll, and tax liability.
When should a company consider using an EOR?
An EOR is especially useful in a range of scenarios. It is the most efficient route when you want to convert existing contractors into compliant employees and reduce misclassification risk, or when you need to hire talent in a country where you do not have a local entity. It also allows you to onboard quickly without going through a lengthy and complex company registration process, while ensuring full compliance with local employment law, payroll, and tax regulations. Beyond these core use cases, an EOR is equally valuable when you are testing a new market before committing to a long-term investment, or when you simply need temporary or project-based hires abroad.
Can we hire both local nationals and foreign employees through an EOR?
Yes. Our EOR services cover both local nationals and foreign hires. For foreign nationals, additional visa or work permit requirements apply, and we can support the application process end-to-end — including sponsorship in jurisdictions where we hold the relevant licence.
Is permanent establishment (PE) risk avoided?
An EOR is a third-party business that legally employs international workers on your behalf, creating a clear layer of separation between your company and the staff based in other countries. The EOR becomes the legal employer for those workers, so although the employees continue to deliver services to your business, the legal distancing helps mitigate many common PE risks. That said, PE is determined by the facts on the ground (the nature of the activity, contract-signing authority, where revenue is generated, and so on), not solely by who issues the payslip. We therefore recommend reviewing each engagement with our specialists to confirm the appropriate structure.
What is your pricing model?
Our standard management fee is 5% of the contract value, with a minimum of €550. We also offer volume discounts on bulk engagements. To discuss pricing for your specific scenario, please get in touch with our team here: https://accessfinancial.com/#get-started.
Social Insurance
Statutory contributions in Kenya fund the National Social Security Fund (NSSF) for pensions, the Social Health Insurance Fund (SHIF) for healthcare, and the Affordable Housing Levy (AHL).
NSSF Year 4 Rates — Effective 1 February 2026
The Upper Earnings Limit has increased to KES 108,000. Maximum employee NSSF contribution is now KES 6,480/month, matched by the employer. Total combined contribution per high-earning employee reaches KES 12,960/month.
Employer Contributions
Employee Contributions