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Kenyan Shilling (KES)
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A guide to employing and growing your team in Kenya
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Kenya is known for its scenic landscapes and vast wildlife reserves. Nairobi is one of the world’s fastest-growing cities, now a thriving metropolis and a key center for trade in East Africa. Kenya’s employment landscape is governed by the Employment Act of 2007 and the Finance Act 2023, with recent 2024 and 2025 updates significantly altering social contributions and tax reliefs. As of 2026, the national minimum wage for general workers in major cities (Nairobi, Mombasa, Kisumu) is KES 16,113.75 per month. A key feature of the Kenyan system is the “Triple Levy” on gross salary (NSSF, SHIF, and Housing Levy), with several of these contributions now serving as tax-deductible reliefs for employees.
Employer Contributions
National Social Security Fund (NSSF): 6% of pensionable earnings. As of February 2026, the Upper Earnings Limit (UEL) is KES 108,000, making the maximum employer contribution KES 6,480.
Affordable Housing Levy (AHL): 1.5% of the employee’s gross monthly salary (Matched).
NITA Levy: KES 50 per employee per month (Industrial training levy).
Total Employer Contribution: 7.5% + KES 50
Employee Payroll Taxes
National Social Security Fund (NSSF): 6% of pensionable earnings (Capped at KES 6,480).
Social Health Insurance Fund (SHIF): 2.75% of gross monthly salary (Replaced NHIF; minimum KES 300, no upper cap).
Affordable Housing Levy (AHL): 1.5% of gross monthly salary.
Total Employee Contribution: 10.25%
Employee Income Tax Rates
Kenya uses a progressive tax system. Since late 2024, SHIF and Housing Levy contributions are fully tax-deductible, reducing the taxable base. Every resident is entitled to a Personal Relief of KES 2,400 per month.
2026 PAYE Tax Bands (Monthly):
First KES 24,000: 10%
Next KES 8,333: 25%
Next KES 467,667: 30%
Next KES 300,000: 32.5%
Above KES 800,000: 35%
Statutory Leave
Employees are entitled to 21 working days of paid annual leave after 12 months of service. Kenya observes 10 to 12 public holidays annually. If a holiday falls on a Sunday, the following Monday is typically observed as a non-working day.
Pregnancy and Maternity Leave
Female employees are entitled to 3 months (90 calendar days) of fully paid maternity leave.
Notice: The employee must give 7 days’ written notice before the leave begins.
Return to Work: The employee has the right to return to the same job or a reasonably suitable alternative with the same terms.
Annual Leave: Maternity leave is in addition to the statutory 21 days of annual leave; taking maternity leave does not reduce annual leave entitlement.
Paternity Leave
Male employees are entitled to 2 weeks (14 calendar days) of fully paid paternity leave. This leave is typically taken immediately following the birth of the child and, like maternity leave, must be granted without loss of other leave entitlements.
Work-Related Injury Leave
Sick Leave: After 2 months of service, employees are entitled to a minimum of 7 days at full pay and 7 days at half pay per year, provided they submit a medical certificate.
Pre-adoptive Leave: Adoptive parents are entitled to 1 month of paid leave from the date the child is placed in their care, provided they give 14 days’ notice.
Termination Process
Termination must be based on valid reasons (conduct, capacity, or operational requirements). Employers must follow a fair procedure, including a written notice and a hearing (disciplinary) or consultation (redundancy).
Notice Period
Monthly Contracts: 1 month notice or 1 month’s salary in lieu of notice.
Longer Tenure: Notice periods are often defined in the contract but must meet the statutory minimum of 1 month for permanent employees.
Probation Period
The maximum statutory probation period is 6 months, though it can be extended to 12 months with the employee’s consent. During probation, the contract can be terminated with a shorter notice period (typically 7 days) as specified in the contract.