KenyaNairobi earned the "Silicon Savannah" label honestly: a deep pool of developers, support, and operations talent, strong English, and a UTC+3 timezone that overlaps European hours and US East Coast mornings. The thing that catches US founders off guard is how much Kenyan payroll has changed recently: a new health scheme, a new housing levy, and pension contributions that step up on a legislated schedule. A provider running last year's tables is quietly getting it wrong.
Here's the current picture.
Quick facts
| Kenya | |
|---|---|
| Currency | Kenyan Shilling (KES) |
| Standard work week | 6 days, up to 52 hours legal maximum |
| Payroll frequency | Monthly |
| Employer statutory cost | ~12-18% on top of gross salary |
| Minimum wage | KES 18,047/month (Nairobi and Zone 1) |
| Probation | Up to 6 months |
| Notice period | 30 days |
| 13th month pay | Not mandatory |
| Employees paid in | KES, required by law |
First decision: contractor or employee?
Most US startups start with contractors in Kenya, and senior Nairobi engineers are used to invoicing foreign clients across timezones.
The misclassification line is the standard one: fixed hours, exclusive work, and day-to-day management make someone an employee regardless of the label. Kenya adds a wrinkle: "casual employment" is a strictly defined legal category that cannot be stretched to cover long-term professional work, so don't let anyone talk you into it as a workaround. When someone becomes core to the team, convert them through an employer of record (EOR) or your own Kenyan entity.
Paying contractors in Kenya
The compliance mechanics are simple:
- Collect a W-8BEN before the first payment. It certifies the contractor is a non-US person, so you generally don't issue a 1099. Confirm with your accountant.
- Sign a real contract covering scope, rate, IP assignment, and termination, written with Kenyan law in mind.
- Pay in USD or KES, their choice. Contractors can invoice in USD. The expensive part is delivery: international wires into Kenya cost $25-45 each, take days, and bury an FX spread in the exchange rate.
Shor pays Kenyan contractors over local rails at a flat disclosed 2% FX margin, for $19/month per contractor. Contracts, W-8BEN collection, and invoicing are built in.
Hiring full-time employees
Employer-side statutory contributions on top of gross salary:
| Contribution | Rate (employer side) | Notes |
|---|---|---|
| NSSF (pension) | 6% | Employee matches 6%; capped at KES 6,480/month per side |
| SHA (Social Health Authority) | 2.75% | The SHIF scheme that replaced NHIF |
| Affordable Housing Levy | 1.5% | Employee contributes 1.5% too, on gross salary |
| NITA (industrial training) | KES 50/month | Flat amount per employee, employer-only |
Headline employer load: ~12-18% on top of gross salary, with the effective rate for higher earners pulled down by the NSSF cap. Run the exact number for your salary before making an offer.
Kenya's payroll stack was rebuilt over the last two years, and the changes are worth naming because plenty of stale content still describes the old system. The Social Health Insurance Fund (SHIF) under the Social Health Authority replaced NHIF in October 2024. The affordable housing levy (1.5% employer plus 1.5% employee) became a standing payroll line in 2024. And NSSF moved to its fourth phase-in year in February 2026, lifting the contribution cap to KES 6,480/month per side. Minimum wages were also revised upward in mid-2026, with Nairobi, Mombasa, Kisumu, Eldoret, and Nakuru at KES 18,047/month. Statutory rates change; confirm current figures with your accountant.
Employees must be paid in KES to a Kenyan bank account.
Leave and benefits
- Annual leave: 21 working days
- Sick leave: up to 90 days at half pay, with medical certification (many employers pay more by policy)
- Maternity leave: 3 months at full pay, employer-funded
- Paternity leave: 2 weeks, paid
- Public holidays: ~10 days, paid
Beyond statute, competitive offers in Kenya commonly add private medical insurance (very common for professional roles), group life insurance, and transport and airtime/data allowances.
Ending employment
Kenya is not at-will, and its courts care about procedure:
- 30 days' notice (or pay in lieu)
- Severance of 15 days' pay per completed year of service, owed on redundancy
- Due process for misconduct or performance dismissals: explain the allegations, let the employee respond, hold a hearing, document everything
- Final settlement covers accrued salary, leave payout, severance where redundancy applies, prorated contributions, and a certificate of service
A termination that skips the hearing step can be ruled unfair even when the underlying reason was solid. This is where an EOR earns its fee.
Documents we'll collect from your employee at onboarding
National ID or passport, KRA PIN (tax ID), NSSF number, SHA number, and a Kenyan bank account for salary.
What it costs through Shor
- Contractors: $19/month each
- Full-time employees (EOR): $299/month each, PAYE, NSSF, SHA, and housing levy filings handled
- Your own Kenyan entity: we run payroll on top of it for less than EOR, in the same dashboard
No setup fees, no annual lock-in, and the FX margin is a flat disclosed 2%. The pricing calculator shows the full Kenya math including every statutory line.
Next steps, depending on where you are: the EOR pricing comparison puts published provider prices side by side, and EOR vs. your own entity has the breakeven math for when a local entity starts to win. To see Kenya against the rest of our coverage, the reference tables compare employer costs, notice periods, and public holidays across every country here. Already with another provider? Switching EOR providers covers the traps worth planning around.
FAQ
Can I pay Kenyan employees in USD? No. Salaries must be paid in KES to a Kenyan bank account. Contractors, however, can invoice in USD.
What does an employer of record in Kenya cost? With Shor, $299/month per employee, plus the statutory employer contributions (roughly 12-18% of gross, less for higher earners because of the NSSF cap). Deel and Remote charge $599-699/month for the same coverage.
What is SHIF and do I have to pay it? SHIF is Kenya's social health insurance scheme, run by the Social Health Authority. It replaced NHIF in October 2024, and yes, contributions are mandatory on every payroll. If a provider or guide still references NHIF, that's a sign their Kenya data is stale.
How fast can someone start? Contractors: the day the contract is signed and the W-8BEN is in. Employees via EOR: typically 7-14 business days, driven by KRA, NSSF, and SHA registration.