Employers in Kenya are required to contribute to the National Social Security Fund (NSSF) at KES 200 per month, the National Hospital Insurance Fund (NHIF) based on salary bands, and deduct and remit Pay As You Earn (PAYE) income tax. Statutory benefits also include minimum paid annual leave (at least 21 working days), public holidays, and statutory sick and maternity leave as set by the Employment Act, 2007.

Payroll taxes in Kenya include PAYE, which is calculated using progressive tax rates ranging from 10% to 30%, and must be withheld and remitted to the Kenya Revenue Authority (KRA) monthly. Employers must also withhold and remit employee contributions for NSSF and NHIF, ensuring compliance with the Income Tax Act (CAP 470) and the relevant statutory bodies.

Employers should account for statutory severance pay (at least 15 days’ pay per completed year of service for redundancy), end-of-contract gratuity where contracts specify, and administrative costs for statutory reporting and remittance. Additional costs may include mandatory training levies (such as the Industrial Training Levy) and costs associated with compliance audits and workplace safety requirements.

Kenyan law prescribes a sector-specific minimum wage under the Regulation of Wages and Conditions of Employment Act, and mandates maximum working hours (52 per week), overtime pay, and written employment contracts. Termination rules require notice or pay in lieu, and collective bargaining agreements (CBAs) in certain sectors may impose higher wage or benefit standards.

Most employees in Kenya are hired on written contracts, which may be fixed-term or open-ended, with a probation period typically not exceeding six months as per the Employment Act. Probationary employees are entitled to statutory notice, and it is customary to provide certain non-mandatory benefits such as medical cover, though these are not universally required by law.