Employer of Record in Kenya

An Employer of Record (EOR) in Kenya is a straightforward solution for hiring employees without setting up a local entity. Think of an EOR as a partner that handles all the legal and HR tasks that come with employment. You find the talent, and the EOR puts them on their payroll. This means they take care of salaries, taxes, benefits, and Kenyan labor law compliance. You manage your team's day-to-day work, while the EOR handles the paperwork. For companies looking to hire in Kenya, providers like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Kenya

Using an EOR in Kenya follows a simple process. Here’s how it works:

• You Choose Your Candidate: You recruit and select the person you want to hire in Kenya.
• The EOR Drafts a Compliant Contract: The EOR creates an employment contract that follows Kenya's labor laws.
• The EOR Onboards Your New Hire: They handle all the necessary paperwork to officially employ your new team member.
• They Manage Payroll and Taxes: The EOR processes payroll and ensures all required taxes and social contributions are paid. This includes payments to the Kenya Revenue Authority (KRA) (https://www.kra.go.ke), the National Social Security Fund (NSSF) (https://www.nssf.or.ke), and the National Hospital Insurance Fund (NHIF) (https://www.nhif.or.ke).
• Ongoing HR Support: The EOR provides ongoing support for HR matters, from managing benefits to handling any employee questions.
• You Manage the Employee's Work: You direct their daily tasks and responsibilities, just like any other member of your team.

Why use an Employer of Record in Kenya

Using an EOR in Kenya can help you grow your business faster and with less risk. It's a practical way to build a team in a new country without getting slowed down by administrative hurdles.

Here are some of the main benefits:

• Enter the Market Quickly: You can hire employees and start operations in a matter of days, instead of the months it can take to register a local company.
• Stay Compliant with Local Laws: Kenyan labor laws can be complex. An EOR has the local expertise to make sure your hiring practices are fully compliant, reducing your legal risks.
• Reduce Administrative Work: The EOR handles payroll, tax filings, and benefits administration. This frees you up to focus on your core business activities.
• Save Money: Setting up and maintaining a legal entity in Kenya comes with significant costs. An EOR offers a more cost-effective way to hire in the country.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Kenya includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Kenya.

Hiring in Kenya is a mix of navigating a dynamic, youthful workforce and understanding specific labor laws. You'll find a strong talent pool, especially in tech and mobile innovation, centered around "Silicon Savannah." But, to hire successfully, you need to get the local employment regulations right. This means paying close attention to contracts, working hours, and how you classify your workers.

Employment contracts & must-have clauses

Every employee you hire for more than three months needs a written contract. This document is the foundation of your relationship, so clarity is key. It protects both you and your employee by setting clear expectations from the start.

Under Kenya's Employment Act, 2007, you must include specific details in every employment contract. Think of these as the non-negotiables.

Essential clauses for your Kenyan employment contracts:

• Employee's information: Full name, age, gender, and permanent address.
• Employer's information: Your company's name.
• Job details: A clear job description and the date the employment begins.
• Contract duration: State whether it's a fixed-term or indefinite contract.
• Work location: The primary place of work.
• Working hours: The expected hours of work.
• Compensation: The salary, how it's calculated, and when it will be paid.
• Leave entitlement: Details on annual leave, public holidays, and sick leave.
• Termination notice: The required notice period for ending the contract.

Probation periods

Probation periods are common in Kenya and give you a chance to see if a new employee is the right fit. The initial probation period can be up to six months. If you need more time, you can extend it for another six months, but only with the employee's written consent. This brings the maximum possible probation period to one year.

During probation, either you or the employee can end the contract with a written notice of at least seven days.

Working hours & overtime

A standard workweek in Kenya is typically 40 to 52 hours, spread over six days. Employees must have at least one rest day each week.

Overtime is any work done beyond the normal hours. You must pay for it at a higher rate.

Public & regional holidays

Kenya celebrates several national holidays each year. Your employees are entitled to a paid day off for these. If they work on a public holiday, you must pay them double their normal rate.

Some of the main public holidays include:

• New Year's Day
• Good Friday
• Easter Monday
• Labour Day
• Madaraka Day
• Mashujaa Day
• Jamhuri Day
• Christmas Day
• Boxing Day

Muslim holidays like Eid al-Fitr and Eid al-Adha are also observed, with dates varying each year based on the lunar calendar.

Hiring contractors in Kenya

You can also hire independent contractors in Kenya, which offers flexibility for project-based work. Contractors are considered self-employed and are responsible for their own taxes. They aren't covered by the same employment laws as your permanent staff. This means the terms of your relationship are governed by the contract you both sign.

However, it's crucial to classify workers correctly. If a court decides a contractor is actually an employee, you could face significant penalties. This is known as misclassification risk.

An Employer of Record (EOR) helps you avoid this risk. An EOR legally employs workers on your behalf, ensuring full compliance with Kenyan labor laws. This way, you can work with talent in Kenya without setting up a local entity or worrying about misclassification. The EOR handles payroll, taxes, benefits, and all the legal paperwork, leaving you to focus on managing your team and growing your business.

Navigating Compensation and Payroll in Kenya

Paying your team in Kenya involves more than just transferring money. You need to understand the local rules around salaries, taxes, and contributions. Getting it right keeps your business compliant and your employees happy. It’s a key part of running a successful operation in the country.

Payroll cycles & wage structure

In Kenya, the payroll cycle is typically monthly, with most employers paying employees on the last working day of the month. While weekly or bi-weekly payments are possible, monthly schedules are the standard.

A Kenyan salary has two main parts:

• Basic Salary: This is the fixed part of an employee's pay. It must be at or above the government's minimum wage for that specific job and location.
• Allowances: These are additional payments for things like housing or transport. Some are required by law, while others are offered by employers to attract and retain talent.

There is no legal requirement for a 13th-month bonus in Kenya.

Overtime & minimums

The standard work week in Kenya is 45 to 52 hours. Anything beyond these hours is considered overtime.

• Weekday Overtime: Paid at 1.5 times the employee's normal hourly rate.
• Public Holiday & Rest Day Overtime: Paid at double the normal hourly rate.

As of 2025, the general minimum wage is KES 15,201 per month. However, this can change based on the industry and location, so it's important to check the specific rate for your employees.

Employer taxes and contributions

As an employer in Kenya, you are responsible for several contributions on top of an employee's gross salary. These payments fund social security, health, and training programs.

Employee taxes and deductions

You must deduct taxes and contributions from your employees' salaries and send them to the correct government agencies. The main deductions include income tax, social security, and health insurance.

In Kenya, providing employee benefits and leave is a key part of managing your team. It's about more than just following the law. Good benefits show your employees you value them. This can help you build a strong, committed team. Understanding the local rules for leave and benefits is your first step.

Statutory leave

Kenyan law sets out the minimum leave employees are entitled to.

• Annual Leave: Employees get 21 working days of paid annual leave after completing one year of service. This works out to 1.75 days for each month worked.
• Sick Leave: After two months of service, an employee is entitled to seven days of sick leave with full pay and another seven days with half pay each year. To get this leave, an employee needs to provide a certificate from a doctor.
• Maternity Leave: Female employees receive three months of fully paid maternity leave. They can take this in addition to their annual leave.
• Paternity Leave: Male employees get two weeks of paid paternity leave.

Public holidays & regional holidays

Employees in Kenya are entitled to paid days off on public holidays. If an employee has to work on a public holiday, you must pay them double their normal rate.

Typical supplemental benefits

To attract and keep the best talent, many employers offer more than the legal minimum. Here’s a look at both the required and the extra benefits you can offer.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be tricky. An Employer of Record (EOR) makes it simple.

An EOR already understands the local laws and what employees expect. They can help you create a benefits package that is both compliant and competitive. This means you don't have to spend time figuring out complex regulations.

An EOR handles the administration of benefits. This includes everything from enrolling employees in health insurance to managing pension contributions. This frees you up to focus on growing your business. By using an EOR, you can be sure you are taking good care of your team in Kenya.

When your business relationship with an employee in Kenya ends, you need to follow a clear process. Kenyan law, specifically the Employment Act of 2007, outlines the steps for both termination and offboarding. You must have a valid reason for ending the employment, and you must follow a fair procedure. This protects both you and your employee and helps you avoid legal trouble.

Notice Periods

You must give your employee written notice before termination. The length of the notice period depends on how often you pay your employee.

Source: Rivermate

You can choose to pay an employee for the notice period instead of having them work. This is called payment in lieu of notice. If you do this, the employment ends immediately.

Severance Pay

You only need to pay severance when you make an employee redundant. Redundancy happens when you need to reduce your workforce for operational reasons.

To calculate severance pay, you give 15 days of basic wages for each full year the employee worked for you.

Here are the key things to remember about severance pay:

• Eligibility: It applies to employees who are made redundant.
• Calculation: The formula is (Basic wage / 30 days) * 15 days * Number of completed years of service.
• Process: You must inform the employee and the local labor officer about the redundancy. You also need to consult with the employee or their representative.

How Rivermate Handles Compliant Exits

Navigating employee exits in a different country can be complex. We make sure every termination is handled correctly and according to Kenyan law.

Here’s how we help:

• Legal Compliance: We stay up to date on Kenyan employment laws so you don’t have to. We ensure every termination follows the required legal procedures.
• Documentation: We handle all the necessary paperwork, from the initial notice to the final payment records. This keeps you organized and compliant.
• Clear Communication: We help you communicate clearly with your exiting employees. This includes explaining their final pay and benefits.
• Risk Reduction: By following the correct procedures, we help you avoid legal claims of unfair termination. In Kenya, this can result in compensation of up to 12 months of the employee's salary.

We manage the entire offboarding process for you. This gives you peace of mind and lets you focus on running your business.

Navigating the visa and work permit landscape in Kenya is straightforward when you understand the requirements. For any non-citizen looking to work in the country, securing the correct permits is essential. The Kenyan government requires all foreign nationals to have the proper authorization before they can legally work. This process ensures that you are compliant with local immigration and labor laws.

Employment visas & sponsorship realities

The most common route for a foreign national to work in Kenya is through a Class D work permit. This permit is for individuals who have been offered specific employment. To get a Class D permit, you must have skills and qualifications that are not available in Kenya.

An Employer of Record (EOR) can sponsor work permits for foreign employees. This is a practical option if your company doesn't have a legal entity in Kenya. The EOR becomes the legal employer and handles all employment-related responsibilities, including visa and work permit sponsorship.

Here are the key realities of employment visas and sponsorship:

• EOR Sponsorship: An EOR with a registered legal entity in Kenya can sponsor a Class D work permit for full-time foreign employees.
• Local Entity Requirement: To sponsor a foreign worker, an employer must be a legally registered entity in Kenya.
• Independent Contractors: Freelancers and independent contractors are not eligible for employer sponsorship and must follow a different process.

The application process for a work permit generally takes two to six months. It's important to start the process well in advance of your planned start date.

Business travel compliance (short‑term visits)

For short-term business visits, Kenya has an Electronic Travel Authorisation (eTA) system. This is for non-work-related activities like attending meetings, conferences, or negotiations. The eTA is mandatory for all visitors and must be obtained before you travel to Kenya.

Here’s what you need to know about short-term business travel:

• eTA Requirement: All visitors must have an approved eTA before entering Kenya.
• Purpose of Visit: The eTA is suitable for short-term business engagements that are not considered work.
• Application: You must apply for the eTA online through the official government portal.

To apply for a business eTA, you will generally need the following documents: