Employment contracts in Kenya

Written contracts are mandatory in Kenya. Employment agreements should include key details such as job descriptions, compensation, working hours, leave entitlements, and termination procedures. Contracts must comply with statutory standards, and both parties should sign them before work begins.

Probationary periods

The Employment Act permits probationary periods of up to six months. During this time, employers or supported employees may terminate the contract with shorter notice—typically seven days. If the probation period exceeds six months, the agreement must explicitly state and justify it.

Working hours in Kenya

Kenya's workforce is young, skilled, and increasingly tech-savvy. The country ranks as one of Africa's top destinations for digital innovation and outsourcing—making it an ideal location for global teams. The standard workweek is 45 hours, typically structured as eight hours per day Monday through Friday, with five hours on Saturday. Overtime pay is mandatory and must be compensated at 1.5x the regular wage on weekdays and 2x on public holidays or rest days.

How an EOR helps you hire in Kenya

Velocity Global helps companies bypass the need to set up a Kenyan entity, enabling them to hire top talent quickly and compliantly. With in-country experts and end-to-end support, the EOR solution manages employment contracts, HR support, onboarding, and regulatory requirements—all through the Global Work Platform.

Kenyan payroll follows a monthly cycle. Employers must deduct statutory contributions such as PAYE (Pay As You Earn) income tax, National Social Security Fund (NSSF), and National Health Insurance Fund (NHIF) from employee salaries.

Minimum wages in Kenya

Minimum wages vary by region and job category. For example, as of 2025, a general laborer in Nairobi earns a minimum monthly wage of KES15,201.60. Salaries above the minimum must still comply with contractual and sector-specific regulations.

Bonus payments

Bonuses are discretionary unless contractually agreed upon. However, many companies offer performance-based incentives, especially in sectors like technology and finance.

How an EOR helps employers run payroll

Velocity Global ensures payroll compliance by calculating wages, deducting mandatory contributions, and filing reports with local authorities. Our platform offers real-time visibility and accuracy in payroll operations across every country of hire.

Kenya tax calendar

Tax returns are due annually by June 30. Monthly PAYE and statutory contributions must be remitted by the ninth day of the following month.

Income tax thresholds

In 2025, individual income is taxed progressively from 10% to 30% depending on income brackets. Employers must accurately calculate and withhold PAYE to avoid penalties.

• 10% on income up to KES24,000
• 25% on income from KES24,001 to KES32,333
• 30% on income above KES32,333

Health coverage in Kenya

Public healthcare contributions are mandatory under NHIF. Many employers also offer private health insurance to supplement public coverage. The NHIF recently shifted to an income-based contribution model, affecting payroll deductions.

Pensions in Kenya

The NSSF provides mandatory retirement savings. Employers and employees each contribute 6% of the employee's monthly earnings, up to a defined ceiling. Some employers offer supplementary retirement benefits through private schemes.

How an EOR helps you calculate taxes

Velocity Global handles all calculations and filings related to payroll taxes, healthcare, and pensions. Our compliance experts stay ahead of changing tax laws to ensure customers remain fully compliant.

Annual leave

Kenyan labor law outlines clear leave entitlements:

Annual leave: 21 working days per year after 12 months of continuous service.

• Accrues after 12 consecutive months of employment
• Fully paid leave
• Can be split or postponed by mutual agreement

Parental leave: Female supported employees receive 90 calendar days of maternity leave with full pay. Male supported employees receive two weeks of paternity leave. Employees must notify the employer in advance with documentation for parental leave.

Sick leave: 14 days of paid sick leave per year, with the first seven days at full pay.

Public holidays: Kenya observes at least 13 national holidays annually, including Mashujaa Day and Jamhuri Day.

• Includes religious and national observances
• Employees are entitled to full pay during public holidays
• Overtime applies for work performed on these days

How an EOR helps manage time off

Velocity Global tracks and manages leave entitlements for supported employees, ensuring all time off is logged, paid accurately, and aligned with statutory and company-specific policies.

Statutory benefits include NHIF, NSSF, and paid leave.

Supplemental benefits vary but often include private health insurance, professional development support, meal stipends, and transportation allowances.

• Private healthcare top-ups
• Skill development reimbursements
• Meal and commuting allowances
• Life insurance or wellness packages

How an EOR helps administer benefits

Velocity Global manages benefits administration from end to end, from statutory obligations to supplemental perks. Customers gain access to cost-effective plans tailored to attract top talent in Kenya.

Termination and severance

Employers must follow fair termination procedures. Notice periods range from seven to 28 days, depending on the employment length and contract terms. Severance pay is required in cases of redundancy and is typically 15 days’ pay for each year of service. Employers must provide written reasons and follow due process regarding termination and severance.

How an EOR helps with terminations

Velocity Global guides customers through compliant offboarding, including notice tracking, severance calculation, and exit documentation.