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Global HR Compliance in Kenya

Hiring employees in Kenya provides international organisations with access to a highly educated, multilingual workforce and a strategic base for East African operations. But entering the market, whether for project delivery, local execution, or expansion, requires careful attention to employment law, tax obligations, and immigration compliance.

Kenya has a legal framework backed by active enforcement mechanisms. The Employment Act, 2007 governs most employment relationships, while the Kenya Revenue Authority (KRA) and Ministry of Labour regulate tax, payroll, and employment inspections. Employers are expected to comply fully with local procedures from day one, including registrations, contributions, and contract documentation.

Acumen International enables you to hire legally in Kenya without setting up a local entity. Acting as your Employer of Record (EOR), we manage contracts, payroll, tax filings, and social contributions, while you maintain control over your team’s performance and work structure.

This guide outlines the legal and practical aspects of employment compliance in Kenya and how Acumen supports you in meeting every requirement.

Why Employers Hire in Kenya

Global employers typically engage talent in Kenya under two operational scenarios:

1. Local Presence Without Local Entity
Companies entering the Kenyan market often need people on the ground to execute contracts, manage regional partners, or support clients in sectors such as energy, infrastructure, logistics, development, and financial services. Local hiring enables execution without the delays or expense of local incorporation.

2. Specialist Roles or Expatriate Assignments
When a project demands highly specialised knowledge, foreign technical advisors or regional managers are often seconded to Kenya for fixed periods. Doing this compliantly with correct visa and work permit sponsorship, payroll setup, and tax remittance is essential to avoid regulatory exposure.

Employment Contracts in Kenya

Standard Employment

Most employment in Kenya is governed by indefinite-term contracts. These must include:

  • Position and scope of work
  • Base salary and pay cycle
  • Working hours and leave
  • Probation terms
  • Termination clauses
  • Benefits (statutory and discretionary)

Written contracts are mandatory, and terms must meet or exceed the statutory minimums under the Employment Act.

Fixed-Term Employment

These are allowed for specific projects or defined periods. However, repeated renewals without break or justification may result in the role being reclassified as permanent, triggering additional rights and liabilities.

Casual Employment

Casual workers are paid daily and may not be engaged for more than 24 hours at a time. If a casual role lasts more than 1 month or continues for over 3 months, the employer is required to formalise it with a proper contract.

Payroll, Tax, and Social Contributions

Employers in Kenya are responsible for:

  • PAYE (Pay As You Earn): Monthly withholding of income tax, remitted to the Kenya Revenue Authority (KRA)
  • NSSF: Mandatory National Social Security Fund contributions
  • NHIF: National Hospital Insurance Fund contributions for healthcare
  • Housing Levy: Government-mandated deduction (as applicable)
  • Submission of payroll reports and returns via iTax and other systems

Failure to register employees with the appropriate authorities or remit payments on time can result in penalties, interest, and audit triggers.

Acumen manages monthly payroll processing in full compliance with Kenyan law, including PAYE income tax withholding, NSSF and NHIF contributions, housing levy deductions (where applicable), and electronic submissions to the Kenya Revenue Authority. All records are maintained to audit-ready standards.

Working Hours and Overtime

  • Standard workweek: Up to 52 hours over 6 days
  • Shift-based or night work: May extend to 60 hours, with proper rest provisions
  • Overtime pay:
    • 1.5x hourly rate on weekdays and Saturdays
    • 2x hourly rate on Sundays and public holidays

Employers must track hours accurately, especially in regulated sectors such as manufacturing or security services, where sector-specific limits may apply.

Leave, Benefits, and Probation

Annual Leave

Employees are entitled to at least 21 working days of paid annual leave after one year of continuous service.

Sick Leave

After two months of employment, workers are entitled to:

  • 7 days of full pay
  • 7 additional days at half pay, per 12-month period
  • Medical certificates are required for absences longer than 3 days

Maternity and Paternity Leave

  • Maternity Leave: 3 months of fully paid leave, with reinstatement rights
  • Paternity Leave: 2 weeks of paid leave for male employees

Probation Period

Probation may last up to 6 months, extendable to 1 year with employee consent. During this time, termination still requires notice or pay in lieu.

Minimum Wage and Compensation Structure

Kenya does not have a single national minimum wage. Instead, rates vary by job category and location, with different wage orders applying to urban, rural, and sector-specific roles.

Employers must:

  • Ensure wages comply with the applicable Wage Order
  • Maintain payroll records and payslips in line with Employment Act requirements
  • Include overtime, bonuses, and allowances in total compensation reporting

The Global Payroll Calculator helps determine total employer costs, including wages, contributions, and statutory benefits before onboarding.

Termination and Severance

Grounds for Termination

Permissible grounds include:

  • Redundancy
  • Incapacity
  • Misconduct
  • Poor performance (with documented warning and review process)

Unlawful Termination

Termination based on discrimination (gender, race, HIV status), whistleblowing, or pregnancy is explicitly prohibited.

Notice Periods

  • 1 day: Employment < 1 month
  • 1 week: Employment < 1 year
  • 1 month: Employment > 1 year
  • Pay in lieu is permitted, and notice must be in writing

Severance Pay

Applies only in cases of redundancy. Minimum entitlement is 15 days’ pay per completed year of service. Service pay may also apply unless the employee is enrolled in an employer-registered pension scheme.

Immigration and Work Permits

Foreign nationals must hold a valid work permit (Class D or other relevant type) issued by the Department of Immigration before beginning work in Kenya. Employers must act as sponsors and ensure all documentation is submitted prior to employment start.

Acumen supports work permit sponsorship for eligible roles, coordinating all immigration filings as part of our EOR solution. This ensures compliance with Kenyan regulations and avoids visa-related liability.

How Acumen International Helps You Hire in Kenya

Direct Employment Without a Local Entity over

We serve as the legal employer of record for your workforce in Kenya. You retain operational control employee performance and manage deliverables, we handle employment contracts, payroll, registration, tax filings, and statutory benefits.

Payroll and Compliance Fully Managed

We manage monthly payroll in accordance with Kenyan regulations, including PAYE tax, NSSF and NHIF contributions, housing levy deductions, and KRA compliance. We also ensure leave accruals, contract terms, and benefits align with the Employment Act.

Custom Support for Any Role or Duration

Whether you’re hiring engineers, NGO field staff, country managers, or short-term technical consultants, we provide compliant, contractually sound employment arrangements across job types and durations.

Immigration and Expat Hiring

We sponsor eligible work permits for foreign employees, manage onboarding documentation, and ensure full compliance with Kenyan immigration and labour rules.

Plan Ahead with the Global Payroll Calculator

Use our Global Payroll Calculator to estimate employer contributions, gross-to-net/net-to-gross salary calculations, and total cost of employment in Kenya before you hire. The calculator helps you forecast, plan budgets, build offer packages, and compare the total cost of hire across multiple jurisdictions.

One Partner for Global Workforce Execution

Kenya may be one part of your broader Africa or global strategy. Acumen supports compliant hiring in 190+ countries, with centralised governance, unified documentation, and one point of contact.

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