The default and most common form of employment in Kenya, continuing until lawfully terminated by either party with notice (or payment in lieu) under the Employment Act 2007. Provides employees the fullest protection against unfair termination, including entitlement to fair reason and fair procedure before dismissal, and to redundancy/severance protections where applicable.
Fixed-term contracts are lawful under the Employment Act 2007 for a defined period or specific task and must be in writing, with contracts of terms exceeding one/three months required to specify particulars under sections 9-10. On natural expiry, no notice or severance is owed unless the contract itself is renewed. Kenyan courts have held that repeated, back-to-back renewal of fixed-term contracts performing an ongoing/permanent role can be reinterpreted as creating a de facto indefinite/permanent relationship, exposing the employer to unfair-termination risk if not renewed.
Employees working more than 5 consecutive hours are entitled to at least a 30-minute meal break, at least 12 consecutive hours of daily rest, and at least one full rest day per week (typically Sunday). Hours beyond the agreed daily/weekly schedule are overtime, payable at 1.5x the ordinary hourly rate on normal working days and 2x on rest days and public holidays; overtime must be itemized separately on payslips.
Under section 42 of the Employment Act 2007, probation may not exceed 6 months but can be extended once, with the employee's written consent, for a further period up to 6 months (12 months maximum in total). During probation, either party may end the contract by giving at least 7 days' written notice or payment in lieu. If the employer does not act to confirm or terminate by the end of probation, the employee is generally treated as confirmed in permanent employment.
Kenya's Employment Act 2007 does not require employers to pay a 13th or 14th month salary or bonus. Where paid, a festive-season bonus (commonly in December) is entirely discretionary and governed by the employment contract, company policy, or a collective bargaining agreement.
There is no general statutory job-title classification system for private-sector roles in Kenya. However, certain professions (e.g. medical, legal, engineering, accounting) require registration/licensing with their respective statutory regulatory body regardless of the internal job title used, and foreign-national work-permit categories are tied to the specific job title and skill level stated in the permit application.
Guaranteed percentage-based employer statutory contributions total approximately 7.5% of gross/pensionable pay: NSSF 6% of pensionable earnings (capped at the 2026 upper earnings limit of KES 108,000/month, so effectively lower as a % of pay for higher earners; max ~KES 6,480/month) plus the Affordable Housing Levy at 1.5% of gross salary (uncapped). In addition, employers pay a flat NITA training levy of KES 50 per employee per month, and must carry Work Injury Benefits Act (WIBA) insurance, whose premium is not a fixed government rate but is individually underwritten by risk class (commonly cited around 0.2%-3% of payroll). There is no separate employer contribution to SHIF.
Employees have approximately 10.25% of gross pay deducted for statutory schemes (before PAYE): NSSF 6% of pensionable earnings (capped at the 2026 upper earnings limit of KES 108,000/month), SHIF (Social Health Insurance Fund, which replaced NHIF from October 2024) at 2.75% of gross salary (minimum KES 300/month, no upper cap), and the Affordable Housing Levy at 1.5% of gross salary (uncapped). PAYE income tax is then applied on progressive bands up to 35% after statutory reliefs and deductions.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Kenyan payroll carries three main statutory social-security-type deductions, split between employer and employee, plus a small flat training levy paid only by the employer:
Employers in Kenya must, under the Work Injury Benefits Act (WIBA), 2007, insure all employees against injury, disability or death arising from workplace accidents or occupational disease, via a policy taken out with a licensed insurer, and are directly liable for compensation if uninsured.
Unlike NSSF, SHIF and the Housing Levy, WIBA is not a fixed percentage set by government — premiums are individually underwritten and vary by industry risk classification, claims history and payroll size, commonly cited in the range of roughly 0.2%-3% of annual payroll. Compensation for a covered injury is calculated as a percentage of the employee's earnings tied to the degree of incapacity, subject to statutory minimum and maximum limits.
Kenya's Employment Act 2007 does not provide for general severance pay on ordinary termination (for cause, resignation, or natural contract expiry). Statutory severance applies only where termination is by reason of redundancy (genuine operational requirements): the employee is entitled to not less than 15 days' pay for each completed year of service, calculated on basic wage, in addition to any earned but unused leave, notice pay (or notice actually served), and other accrued dues.
Before redundancy severance becomes payable, employers must follow the procedure under section 40 of the Act, including notifying the employee and any relevant trade union, applying fair and objective selection criteria, and notifying the local Labour Officer.
There is no statutory requirement in Kenya for employers to pay a 13th (or 14th) month salary or bonus. Any such payment is discretionary and governed by the individual employment contract, company policy, or a collective bargaining agreement (CBA) rather than by the Employment Act 2007.
Where offered, a festive-season bonus is commonly paid in December, but its amount, eligibility, and proration for partial years of service are set entirely by the employer's own policy.
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Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
