# Payroll in Kenya: employer costs, taxes and compliance

> Machine-readable page from Payroll Overview (https://payrolloverview.com/), the independent index of global payroll providers.
> Canonical page: https://payrolloverview.com/countries/kenya/
> Methodology: every figure carries a source and a date in our database; ratings are averages of third-party platforms (https://payrolloverview.com/methodology/).
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> Data updated: September 2026
> Every figure below carries its statutory source and year.

Running payroll in Kenya means handling a few moving parts every cycle. You calculate gross salary, deduct income tax and the employee's social security contribution, add your own employer contribution on top, and then make those filings. Everything runs in Kenyan shillings, and both the deductions and the employer-side payments need to land on time.
This guide walks through what payroll actually costs an employer in Kenya, how the pay cycle works in practice, what leave and termination rules mean for your payroll calculations, and when it makes sense to hand things to a specialist.

## Employer costs & taxes

| Item | Value | Source |
|---|---|---|
| Employer social security (on top of gross salary) | 6% | ISSA Country Profiles (2024) |
| Employee social security (withheld from pay) | 8.8% | ISSA Country Profiles (2024) |
| Corporate tax rate | 30% | National government (2026) |

## Pay & payroll operations

| Item | Value | Source |
|---|---|---|
| 13th-month salary | none | National government (2026) |
| Minimum wage (per month) | KES 18,047 | Manual / editor (2026) |
| Statutory work week | 52 hours/week | National government (2026) |

## Leave & time off

| Item | Value | Source |
|---|---|---|
| Paid annual leave | 21 days | National government (2026) |
| Public holidays | 11 days | National government (2026) |
| Maternity leave | 12.9 weeks | World Bank Women, Business and the Law (2026) |
| Paternity leave | 2 weeks | World Bank Women, Business and the Law (2026) |

## Termination

| Item | Value | Source |
|---|---|---|
| Notice period | 4.3 weeks | National government (2026) |
| Severance pay (at 1 year tenure) | 11.4 weeks | National government (2026) |

## Labor market context

| Item | Value | Source |
|---|---|---|
| Retirement age | 60 | SSA Social Security Programs Throughout the World (2019) |
| Unemployment rate | 5.4% | World Bank Open Data (2025) |
| GDP per capita | $2,363 | World Bank Open Data (2025) |
| Union density | 9.7% | ILOSTAT (2019) |
| Collective bargaining coverage | 9.7% | ILOSTAT (2019) |

The gap between what you pay an employee and what that employee actually costs you is real in Kenya. On top of gross salary, employers carry a social security contribution, and while the exact rate is in the table below, think of it as a meaningful addition to every payroll run. It is not enormous, but it is consistent and mandatory, so it needs to be in your budget from day one.
The employee side carries its own withholding too, which you deduct before the net salary goes out. Together, the employer and employee contributions create a tax wedge, meaning the total cost to you is noticeably higher than the take-home the employee sees. For anyone building a headcount budget, that gap is the number to watch. The table below shows the exact rates.

Kenya does not require a thirteenth-month salary payment, so you are not carrying a hidden annual bonus obligation in your cost model. The minimum wage sits at 18,047 KES per month, so any offer letter needs to clear that floor before anything else. Pay frequency in Kenya is typically monthly, which keeps the cycle straightforward. Make sure your payroll calendar accounts for the withholding calculations and employer contributions going out alongside each salary run, not as an afterthought.

Employees in Kenya are entitled to 21 days of annual leave, and those days accrue through the year, so your payroll system needs to track balances as a liability. There are also 12 public holidays to factor into scheduling and pay. Maternity leave runs for just under 13 weeks, and paternity leave is 2 weeks. When someone leaves the business, notice runs a little over four weeks, and severance can add up to roughly 11 weeks of pay depending on the situation. Both of those become final-pay line items, and getting them right matters.

If you do not already have a registered legal entity in Kenya, you cannot run payroll there on your own without one, and setting one up takes time and ongoing admin. Even with an entity in place, keeping up with contribution rate changes, local filing requirements, and leave accrual rules is a steady workload. A global payroll provider or employer of record handles the entity question, manages the filings, and absorbs the work of tracking regulatory changes, which is often a better use of time than building that capability internally, especially for smaller headcounts.