Kenya may not be the first place on many people’s minds for global expansion, but they are mission out. With a growing tech scene, the entrepreneurial energy in Nairobi, and many multilingual professionals shaping East Africa’s future, it would be a mistake to ignore the opportunities.
Still, once you start digging into it, things get complex fast. What’s the right way to hire a local employee? Do you need to set up an entity? How do taxes, payroll, and benefits work?
Sit back and relax as we walk you through how to hire and pay employees in Kenya clearly, confidently, and correctly.
Hiring requirements
Kenya has strong employee protections and clear employer responsibilities. You’ll need to understand how things work before bringing someone on board to ensure compliance.
Work permits and eligibility for foreign hires
If you’re hiring foreign nationals, Kenya requires a valid work permit. The most common option is the Class D work permit, meant for professionals with specific job offers. You, the employer, apply for it through the Kenya Directorate of Immigration Services.
To apply, gather a signed job offer or employment contract, academic and professional credentials, company registration documents, and proof that no qualified Kenyan could fill the role. Applications can take a few months, so begin early. Permits are valid for up to two years and can be renewed. Foreign hires can’t legally start until they have one. For more information, read Working in Kenya: A Complete Guide for International Employers.
Registering as an employer in Kenya
Before onboarding your team, you’ll need to register with three key government agencies: the Kenya Revenue Authority (KRA) for taxes, the National Social Security Fund (NSSF) for retirement, and the National Hospital Insurance Fund (NHIF) for health coverage. You can handle all this online through Kenya’s eCitizen portal.
Structuring employment and payroll in Kenya
Contracts and payroll have a number of requirements that must be followed per Kenyan law.
Drafting employee contracts
The Employment Act requires written contracts that include basic but important details: both parties’ names and addresses, job description, hours (typically 45 per week), salary, leave entitlements, and how termination works.
Probation periods can last up to six months. During this time, a notice period of seven days is common. Set expectations clearly by outlining gross versus net pay, any bonuses, and how performance will be evaluated.
Setting up payroll and PAYE compliance
Kenya’s Pay-As-You-Earn (PAYE) system requires you to deduct income tax and statutory contributions before paying employees.
You’ll need to calculate:
- Income tax, based on salary bands (10% to 30%)
- NSSF contributions, based on a tiered structure
- NHIF contributions, tied to salary and capped around KES 1,700/month
Each payslip should clearly show gross pay, deductions, and net pay. Keep payroll records for at least six years, and use payroll software to help you stay compliant.
Paying employees
You’ve got options when it comes to getting your team paid. In cities, bank transfers work well. For field-based or remote roles, mobile money, especially M-Pesa, is widely used and trusted. Electronic funds transfers are helpful when managing larger payrolls.
Whatever method you choose, confirm it’s legally registered to your employee and get written consent for the payment method.
Understanding cost factors and local salary expectations
Wages aren’t the only thing to budget for.
As of 2025, the minimum wage ranges from KES 15,201 (US$118) per month for general laborers in rural areas to KES 30,627 (US$236) for skilled positions in Nairobi. That’s just the beginning.
You’ll also need to provide:
- NSSF and NHIF contributions
- Paid annual leave (minimum 21 days)
- Severance pay (15 days’ wages per year worked if terminated for redundancy)
To stay competitive, many companies go further, offering health insurance, bonuses, or retirement savings plans. Tools like BrightKenya and Paylab Kenya can help you evaluate what others are offering in your industry.
Tips for a successful application
Hiring in Kenya moves faster when you plan ahead. Start early on work permits and use tools like the eCitizen portal to stay organized. Partnering with an Employer of Record (EOR) is also a great way to make things easy.
How Pebl can help
Hiring in Kenya opens the door to top-tier talent, but hiring takes a lot more than a job offer and a paycheck. From work authorization to compliant withholdings, it pays to plan ahead.
That’s where Pebl comes in.
We make hiring in Kenya with an EOR easy. Our employer of record service handles the legal hiring (and work authorization) all without setting up a local entity. We take care of the red tape, taxes, payroll, and benefits so you can focus on growing your team.
Ready to explore Kenya? Let’s talk.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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