Payroll
/
Kenya
Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
KES KSh (Kenyan Shilling)
Employer contributions
~KES 2,160/month NSSF Tier II employer + NHIF ~1.25% employer portion
Minimum wage
KES 16,200/month (general sector minimum 2023; under review)
Payment frequency
Monthly
January 1 - December 31 / July 1 - June 30 (tax year)
Capital
Nairobi
Timezone
EAT (GMT+3)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~KES 131,400 total
/month
For a gross salary of
KES 120,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~KES 2,160/month NSSF Tier II employer + NHIF ~1.25% employer portion
Mandatory extras
Annual Bonus
Monthly admin
Monthly payroll - PAYE + NSSF + NHIF by 9th - annual P9 June 30
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~KES 131,400 total
Example gross salary
KES 120,000 gross/month
~KES 82,600 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~KES 11,400 SS
Employer contributions on that salary
Employer contributions
~KES 2,160/month NSSF Tier II employer + NHIF ~1.25% employer portion
Employee contributions
KES 2,160 NSSF Tier II + NHIF 2.75% + income tax (PAYE)
Total cost above gross
~9.5% above gross (NSSF+NHIF)
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~KES 80,000
Per month
Nairobi
KES 100,000 - 400,000
~50%
Mombasa
KES 70,000 - 250,000
~15%
Monthly gross. National average salary per year:
~KES 960,000
Minimum wage
KES 16,200/month (general sector minimum 2023; under review)
Paid:
Monthly
Extra pay
Annual Bonus
Discretionary
December
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
10% up to KES 288,000 / 25% up to 388,000 / 30% / 32.5% / 35%
Tax year:
January 1 - December 31 / July 1 - June 30 (tax year)
Filing calendar
Monthly by 9th
Social security payments
June 30 (annual income tax return)
Income tax
By February 28
Employee tax certificate
P9 Annual Tax Certificate
June 30
Annual return
Annual Income Tax Return (P9 form)
Late payment penalties
Late PAYE: 25% penalty + 1% monthly interest; late NSSF: KES 5,000 fine
Who collects what
Kenya Revenue Authority (KRA)
Income tax (PAYE)
NSSF
National social security
Ministry of Labour and Social Protection
Labour law enforcement
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave
21 days/year (after 12 months)
Public holidays
~13 public holidays
Sick leave
Sick Leave
7 days full pay + 7 days half pay per year
Maternity leave
13 weeks (3 months) maternity + 2 weeks paternity
Full pay from employer
The contracts you can use, and what ending an employment relationship costs.
Permanent
Contract of Service (Permanent)
Fixed term
Fixed-Term Contract
Independent contractor
Contract for Service / Consultant
Collective agreements
Collective Bargaining Agreement (CBA)
Ending employment
Redundancy Pay
How it is calculated
15 days pay per year of service
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
NSSF Tier II Contribution Resistance
Risk Level: HIGH
Kenya's NSSF Act 2013 introduced Tier II contributions (6% employer + 6% employee capped at KES 2,160 each) but was contested in court for years. Following the 2023 Supreme Court ruling upholding the Act, employers who deferred Tier II contributions face retroactive liability.
Housing Levy Non-Remittance (2024)
Risk Level: HIGH
Kenya's Affordable Housing Levy (1.5% employer + 1.5% employee on gross salary) became effective in 2024 following court challenges. Employers must remit via KRA by the 9th of each month. Non-remittance attracts a 3% monthly penalty.
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Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
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FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.