Employer of Record in Kenya

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Kenya if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Kenya below, to avoid any compliance issues.

Employment Contract Requirements

In Kenya, both written and verbal agreements are acknowledged, but written contracts are required for durations exceeding three months. Formalities for these written contracts must include:

• Identification of both parties
• Employee's address
• Job description
• Starting date of employment
• Duration of contract
• Workplace details and working hours
• Conditions for remuneration and payment frequency
• Entitlements to leave

Onboarding Process

We can help you get a new employee started in Kenya quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Kenya

Kenya's New Labour Law sets the standard weekly working hours at 45, with a maximum of 52 hours. Shift work is regulated, and regular workdays are Monday to Friday, 8 hours per day, with an additional 5 hours on Saturdays as specified by sector-specific orders under the Regulations of Wages and Conditions of Employment Act.

For employees working night shifts (defined as hours between 10:00 PM and 6:00 AM) the permissible weekly working hours increase to 60 hours, provided that appropriate compensation is made.  Overtime compensation is mandated for work exceeding standard hours, with rates set at 1.5 times the regular hourly wage for weekday overtime. For work on rest days or public holidays, the overtime rate is double the regular hourly wage. Employers are also required to maintain accurate records of employees' working hours to ensure compliance and facilitate proper compensation.

Overtime in Kenya

In Kenya, the overtime pay rate is 150% of the standard pay. The New Labour Law mandates additional compensation for employees working during night hours (between 10 pm and 6 am) if they do not receive time off in lieu. The required pay is a minimum of 1.2 times the regular hourly salary.

Probation Period in Kenya

In Kenya, the probationary period usually spans 3-6 months, requiring a seven-day notice or payment in lieu if termination occurs. As per the 2022 New Labour Law, apprentices must earn at least 70% of a full-time employee's salary for the same job, ensuring parity with regular employees during probation.

The minimum wage for employees in Kenya is typically 15,201 KES per month (equivalent to 117,65 US Dollars).

Kenya's minimum wage policies are designed to balance fair worker compensation with economic sustainability. As of 2025, the minimum wage amount of 15,201 KES per month reflects government and employer efforts to address inflation while maintaining business viability. Employers must ensure adherence to these regulations to remain compliant. Additionally, while some industries offer higher wages due to demand, it remains crucial for businesses to monitor government policies and economic trends affecting future wage adjustments.

Hiring in Kenya means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

In Kenya, employers must manage several key payroll taxes, including PAYE, NSSF, and NHIF, while ensuring timely filing and remittance to the respective authorities. Payroll management software like Playroll can streamline these processes, ensuring accuracy, compliance, and efficient management of employee records.

Running payroll in Kenya is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in Kenya:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

In Kenya, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, providing company and employee documentation, and paying fees. Key permit types include the Class A Work Permit for mining, the Class D Permit for employment roles, the Class G Permit for investors, and newer classes such as Class N for digital nomads, Class P for NPO workers, Class Q for religious/charitable professionals, and Class R for East African Community citizens.

Employers must ensure compliance with local labor laws when sponsoring foreign employees and should plan for processing times of up to three months.

Mandatory Leave Entitlement in Kenya

The annual leave entitlement in Kenya is 21 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Kenya

Kenya recognises 13 public holidays:

Paid Time Off in Kenya

After a year of service, employees receive a minimum of 21 days of paid annual leave. According to the New Labour Law, new employees qualify for annual vacation from the 7th month, with a mandatory 10 consecutive days within the first 15 days of leave. With employee consent, employers can divide the annual leave into different intervals.

Maternity Leave In Kenya

Expectant employees are eligible for a 3-month maternity leave, receiving 100% of their regular pay. A minimum notice of 7 days, along with a medical certificate, is required when indicating the intended leave period. In cases of adoption, the provisions for maternity and paternity leave apply, with a 14-day notice to the employer.

Paternity Leave In Kenya

Fathers are entitled to a two-week paternity leave with full payment equivalent to their average salary. The employer is responsible for providing this pay, and the employee cannot extend this leave.

Sick Leave In Kenya

After 2 consecutive months of service, employees have the right to 30 days of fully paid sick leave, followed by an additional 15 days at half salary within each 12-month service period. A valid professional medical certificate indicating the incapacity to work is a requirement for this sick leave.

Parental Leave In Kenya

There is no provision for shared parental leave in Kenya, where parents can divide a set amount of leave between them. Each parent has distinct leave entitlements.

Adoption Leave

Employees who seek to adopt a child are entitled to a month of pre-adoption leave at 100% of their salary. They are required to give a 14-day notice to their employer and submit the necessary adoption documentation.

Administering employee benefits in Kenya requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. Kenya also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.

Termination Process in Kenya

In Kenya, termination must be justified, and at-will termination or termination outside the probation period is not permissible for employers. Acceptable grounds for terminations include:

• Employee-initiated termination
• Mutual agreement
• Employer-initiated termination (due to misconduct, inability to perform, or illness)
• Redundancy
• Contract expiration

Notice Period in Kenya

In Kenya, the minimum notice period is 28 days (or one month) for monthly salary payments, and it may be extended. Employees terminated during the probationary period should receive at least 7 days' notice. For employees on daily wage contracts, the contract is terminable by either party at the close of any day without prior notice. For weekly wage employees, the notice period is 7 days.

Severance in Kenya

Severance pay is only applicable when an employee is terminated due to redundancy, and it is calculated at a rate of 15 days for each year worked. In cases of termination for other reasons, service pay is provided at the same rate as severance pay.