Kenya Employer of Record & Payroll

Flag-Kenya

Africa Deployments Kenya offers our clients Employer of Record (EOR) services covering all the regions within.  We offer full-time employment or fixed terms contracts based on your requirements in Kenya for locals or expatriates.  ADS will take care of the work permit under our umbrella and will issue local work contracts to your contractors.  We will also advise our clients on best Human Resource (HR) practices when setting up the employee’s locally in Kenya.

 

ADS takes care of the local tax & PAYE remittances to the Revenue Services on a monthly basis ensuring that they are fully compliant with the law.  We will also ensure that their salaries are paid on time monthly and issue them with their pay slips. In addition to our services, we can offer you the employee in Kenya, Medical, Disability, Life, and Workmen’s Compensation Insurances.

Kenya, an East African nation known for its beautiful scenery and huge wildlife preserves.

What income is Taxable in Kenya:

Any individual who works and lives in Kenya will be subject to local taxes in Kenya. The tax years from effectively from 1st January to 31st December of the following year. Resident Employees are taxed on worldwide earned income in respect of any services rendered in Kenya or outside Kenya.

Any income earned in the form of cash, wages, salary, overtime, leave pay or payment in lieu of leave, commissions, gratuity, bonus, or any amount that has benefited the employee.  All income will be taxed in accordance with the law and the final payroll issued monthly.

What income is exempt from taxes in Kenya:

  • Interest from Post Office Savings Bank (POSB) ordinary accounts.
  • Group life policy, Beneficiaries, lump-sum pension, medical services for both employees and directors.
  • Education fees of an employee’s dependants, which have been taxed on the employer.
  • The first KES 300k per annum from registered pension and retirement annuities.
  • Reimbursement of expenses.

What type of leave is allowed in Kenya:

  • Annual leave – Every fixed-term and permanent employee is entitled to at least 21 working days of paid time off per year. When an employee’s job is terminated after two or more months of service, they are paid for one and a half days of leave for each month that they have worked.
  • Sick leave – An employee becomes eligible for sick leave (at least 7 days with full pay, followed by 7 days with half-pay) after serving their employer for two consecutive months.
  • Maternity leave – Women have a right to three months of paid maternity leave (in lieu of annual leave).
  • Paternity leave – A male employee is entitled to two weeks of paid paternity leave.

CAN YOU GIVE FRINGE BENEFITS:

Yes, you can but keep in mind that Fringe Benefits will be subject to employee PAYE tax.  Only benefits that cannot be converted to cash will not be subject to tax.  Only if the total value of all non-cash fringe benefits, excluding housing and company cars, reaches 3,000 Kshs per month or 36,000 Kshs per year is the total liable to employee tax.

What are the Employer & Employee contributions in Kenya:

  • National Health Insurance Fund (NHIF) – (Employer 1.5% & Employee 1.5%).
  • National Industrial Training levy (NITA)
  • Social Security: National Social Security Fund (NSSF) – With effect from 1st January 1997, contributions paid to the National Social Security Fund (NSSF) are deductible.

IS THERE GRATUITY PAYMENTS FOR TERMINATION:

An Employer and Employee can agree on severance pay.  This type of employment termination must be done in accordance with the law, and the local labour office must be informed. Employees are entitled to accrued leave benefits, one month’s pay in lieu of notice, and 15 days’ worth of severance compensation for each year of service.

WHAT DOUBLE TAX TREATIES ARE IN PLACE:

  • Denmark
  • India
  • Canada
  • Zambia
  • Denmark
  • Korea
  • Qatar
  • United Kingdom
  • France

Get in touch with one of our consultants should you have any further questions regarding our Employer of Record solutions or only require a payroll solution in Kenya.