Employer of Record in Kenya

Skuad's Kenya EOR (Employer of Record) solution enables you to extend your company into Kenya without the requirement to establish an organization. Our unified and automated global human resources platform helps you to streamline remote team onboarding and handle their payroll, benefits, and other HR functions in a compliant manner. With the support of our worldwide network, we assist you in streamlining the worldwide growth process.

Kenya at a Glance

Population: 56.2 million

Currency: Kenyan shilling

Capital city: Nairobi

Languages spoken: Swahili, English

GDP growth rate: USD 113.42billion

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What You Must Know Before Employing in Kenya

Kenya's employment regulations apply to both foreign nationals and domestic residents. However, their rights are somewhat varied. Let us examine the distinctions and other facets of Kenya's employment laws.

To commence business operations in Kenya, a company must be familiar with all elements of Kenya's employment laws. They may seem to be fairly complicated and perplexing, yet they are not dissimilar to employment legislation in many other nations. Nonetheless, to minimize or reduce the difficulties that may occur for companies establishing a local office, it is prudent to engage with a local payroll provider who is familiar with Kenya's rules governing both local and international personnel.

Entitlements	Explanation
Statutory Working Hours	The usual workweek varies by company but is typically between 40 and 52 hours over six days. Night shift employees might work up to 60 hours each week. The night shift is from 6:30 pm to 6:30 am Employees 16 years of age or younger can work up to 36 hours per week. After six days of work, employees enjoy one day of relaxation. Those who work on a rest day are compensated at 200% of the baseline rate. Employees who work on statutory holidays are eligible to receive 200 percent of their regular pay.
Overtime eligibility	Overtime combined with regular daytime hours cannot exceed 116 hours in two weeks. Overtime hours combined with nighttime work cannot exceed 144 hours in two weeks. On weekdays, overtime is paid at 150 percent of the base rate. Overtime is paid 200% of the basic rate on Sundays and public holidays.
Paid Public Holidays	New Year’s Day Good Friday Easter Monday Labor Day Eid ul-Fitr Madaraka Day Eid ul-Azha Moi Day Diwali Kenyatta Day Christmas Day Independence Day Boxing Day
Holiday pay	Employees are eligible for public holiday compensation when, They are on an approved vacation, such as a yearly vacation They apply for medical leave It is before and after a holiday
Vacation Leave	Employees are entitled to 21 days of paid leave each year after completing one year of service.
Sick Leave	After two consecutive months of employment, employees are entitled to 14 days of paid sick leave every year. Employees are required to provide a medical certificate. The first seven days are completely compensated when the employee has at least two months of service. The remaining days are compensated at 50%.
Maternity and Paternity Leave	Female employees are entitled to three months of paid maternity leave with seven days’ notice. Employers have the option of extending maternity leave. Male employees are entitled to two weeks of paid paternity leave.

To ensure your expansion endeavors comply with the Kenya employment laws, Contact Skuad today.

Contractors vs Full-Time Employees

If a worker is categorized as an employee, he or she is responsible for withholding, depositing, reporting, and paying employment taxes, as well as withholding and reporting Social Security and Medicare taxes.
When a worker is designated as an independent contractor, then he or she is relieved of some of the administrative burden. Independent contractors are responsible for arranging and paying their income taxes every quarter and are not entitled to any perks.

Employment Contracts

In Kenya, it is mandatory to have a formal employment contract in the local language that details the employee's remuneration, perks, and termination criteria. In Kenya, an offer letter and job contract must always include the salary and any other remuneration in Kenyan shillings and not in a foreign currency.

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Probation & Termination

Employers or employees can terminate an indefinite-term employment contract by giving the following notice:

If the employee is paid on a daily basis, no notice period is necessary, and the contract will expire at the end of the day on which the employee is terminated or resigns.
When the employee receives less than 1 month (for example, weekly or every 2 weeks) payment, the contract will cease at the end of the pay period after the period of pay during which the written notice has been sent.
If the employee is paid monthly or longer, the contract will cease 28 days after the notice is issued.
Employment contracts may include provisions for increased notice periods. Additionally, the party canceling the contract may grant compensation in place of notice. When an employee resigns, the employer may dismiss the notice period but must compensate the employee for any earnings received during the notice period.
Employers and workers are entitled to cancel a contract of employment during the probation period by giving 7 days’ notice or compensation in place of notice. If the company and employee agree, the probation term may be extended to another six months.
Employers are required to pay any outstanding wages to employees upon termination. Monthly compensated workers may be entitled to severance pay of an amount specified in the employment contract, although certain conditions apply.
The employer must provide a written report to the employer in the district in which the employee worked, detailing the circumstances and grounds for dismissal, and providing the notice period or wages as compensation in place of notice.
Employers may fire an employee summarily without providing notice or with less notice than is needed for egregious misbehavior.

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EOR Solution in Kenya

The Kenya Employer of Record (Kenya EOR) solution enables enterprises to grow in Kenya more easily and quickly. Using the EOR method guarantees seamless and compliant payroll and other employment obligations processing without forming an organization. Skuad’s unified employment platform can assist you with managing your workers' monthly payroll, contracts, work permits, and taxes in Kenya.

Outsourcing Employment Through An Employer of Record

When a company decides to expand in Kenya, it must also decide on the path to pursue. Whether you want to develop an in-house team or hire an EOR to handle payroll and employee lifecycle management.

Types of Visas in Kenya

Visa Category	Explanation
Class A	They are issued to those who want to participate in mineral exploration or mining. The minimum requirements are as follows. It is vital to get or be guaranteed to obtain the required permits and registrations. Renewals need a valid prospecting mineral license and a copy of the PIN. An adequate amount of money or resources for investing.
Class B	They are issued to individuals desiring to invest in Agriculture and Animal Husbandry. The minimum requirements are as follows. Evidence of land ownership or a leasehold interest in land used for this purpose Evidence of accessible capital for the goal Approval by appropriate authorities For renewals: A valid prospecting mineral license and a copy of the PIN
Class D	These are issued to individuals offered a particular job by a specific business and who are qualified to accept it. The minimum requirements are as follows. Documents of academic/professional certifications and a curriculum vitae Proof that the organization could not fill the position via the local labor market A fully completed, signed obtained, and sealed Form 25 by the firm
Class G	Work permits are meant for investors in specified trades, businesses, or consulting. The minimum requirements are as follows. Documented verification of a minimum investment of $100,000 US dollars or its equivalent or any other currency A company's registration certificate OR a certificate of incorporation Copies of your personal and business PIN if your firm is operational For renewals: Audited financial statements for the preceding two years and a tax compliance certificate from the Kenya Revenue Authority
Class I	Permits to work/reside in Kenya are provided to members of a missionary organization that has been sanctioned by the Kenyan government and whose presence benefits the nation. The minimum requirements are as follows. A copy of the organization's registration certificate The applicant's academic and professional credentials
Class K	A residence permit is provided to those who have an established source of income from outside sources and agree not to accept any kind of paid job. The minimum requirements are as follows. For Class K, documented evidence of guaranteed income is necessary. Please talk to us to learn more.
Class M	Conventional refugees are granted work permits.

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Work Permit

Skuad's Kenya-based local partner may sponsor international employees for work visas. Skuad, as an EOR in Kenya, is responsible for all employment-related duties and duties. The client organization may manage their workers' everyday activities and operations using Skuad's HR platform.

The estimated time frame for granting a work permit	Typically, obtaining a work permit in Kenya takes between four and eight months from the time of admission to Kenya, plus an additional one to two months to finish the process.
Steps to get the work permit	Entry Permit Class D Application E-Visa Application Entry to Kenya Re-Entry Pass Application
Documents for the work permit	Passport page with a validity of two years
Proof of qualifications	Documentation establishing the applicant's eligibility for the position - a copy of the applicant's diploma/degree/professional qualification. A Kenyan lawyer should verify copies.
Passport photographs	Two passport-sized images (35 mm x 45 mm) in color are required. The photos must have been recently shot. They must display a close-shot of the applicant’s face, and the top of their shoulders. They must show the person gazing properly at the camera. Headcovers are not allowed unless for religious reasons; all facial characteristics must be clearly shown in such circumstances. Eyeglasses can be used; however, the individual's eyes should be readily visible, and no shades should be used. Photographs should be of good quality and shall not be degraded or defecated in any manner without writing traces, lines, or plumes.
Fees	A payment of 10,000 KSH must be made in the form of a banker's check, not reimbursable, and shall cover the costs of the examination of the application.
CV	It should show relevant professional and educational experiences.
E-Visa form	Fill out the form online and print out two copies, which the sponsoring body will then sign and stamp.
Digital photo	A maximum of 500 px x 500 px digital passport photograph is required.
E Visa payment	Online $51, paid with a credit or debit card Visa or MasterCard
Passport information copy page	Scanned copy or photo
Passport validation	The passport is valid for two years
Registration fee	KES 2000 per individual
Foreign registration application form	Fill out the form online, print it out, and sign it.

We have assisted businesses in quickly onboarding, payrolling, and terminating workers at the conclusion of their employment agreements as required.
If you wish to get a work visa for an overseas applicant swiftly and without danger, Skuad's HR team can act as your loyal partner. We will walk you through each stage and advise you on the necessary documentation.

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Things You Must Know To Set Up Payroll In Kenya

You must be aware of the requirements that differ from category to category in order to create payroll and handle taxes in Kenya. First and foremost, if you wish to engage international experts or residents. You must be informed of local tax rules, such as income tax, business tax, withholding tax, insurance for employees, social safety expenses, etc., and you must comply with them. There are two methods to accomplish it:

You establish staff in Kenya that manages the payroll.
You engage the services of a local payroll professional, who will simplify management while also ensuring compliance with Kenyan rules.

Payroll & Taxes

Employer Taxation

Tax

Explanation

Income tax rates

Individuals who are residents are charged internationally on their job incomes, whether they are Kenya tax residents throughout their work period or non-residents if their employer is a resident or has a permanent presence in Kenya.

Kenyan citizens for tax purposes should be deemed individuals if they

Are present in Kenya for 183 days or more or an average period of 122 days and over the same year or in the previous two years
Have a constant residence in Kenya

Persons from the following groups are liable to Kenyan personal income tax.

Business and self-employment revenues Employment revenue
In Kenya, income from capital gains on property transfers.

Social security contributions

Each employer contributes 5% of social security payments. The tariff was hiked to 6%.

Employee Taxation

Tax

Explanation

Income tax rates

Income	Tax Rates %
1 - 288,000	10
288,001 - 488,000	15
688,001 and above	25

Tax returns

Yes

Social security and legal contributions for employees

Each employee contributes 5% of social security payments. The tariff was hiked to 6%.
Also, must additionally pay a proportion of pay depending on the employee’s income to the National Hospital Insurance Fund.

Bonuses

Employees are given bonuses amount that’s equivalent to their one month’s salary.

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Incorporation: How to Set Up a Subsidiary in Kenya

Over the years, Kenya has transformed into a favorite business destination for all budding entrepreneurs because of its business friendliness. Setting up a subsidiary in Kenya can be challenging and time-consuming. Hence, an EOR like Skuad enables organizations to build remote teams in Kenya without setting up an entity.

Obtaining approval on and reserving a company name through the Registrar of Companies
Preparing and stamping the Memorandum, Articles of Association, and Statement of Nominal Capital
Signing the Declaration of Compliance
Completing and filing all relevant forms
Registering for taxes with the Kenya Revenue Authority (KRA)
Applying for a business permit
Registering with social security services
Creating a company seal

While meeting a country’s law can be a painful process, it does require a huge amount of time, which might affect your business growth and expansion. Instead, Skuad can enable operations in Kenya without having to set up an entity while completely complying with the country's laws.

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PEO and payroll in Kenya

The days of businesses being unable to grow abroad as fast as desirable are over. This is due to impediments to global commerce such as complex local regulations or the time-consuming and expensive process of establishing a foreign subsidiary. Professional Employer Organizations have created a new and improved method of expanding globally by recruiting foreign labor from other countries.
Skuad’s payroll solution in Kenya is an excellent method to avoid the burden of establishing a legal business or navigating local labor rules. It enables you to concentrate on critical business duties. By using our foreign employment outsourcing service in Kenya, you can avoid the risks associated with employee misclassification and/or non-compliance.

PEO

A Professional Employer Organization functions as the organization's co-employer and is responsible for the organization's entire staff. It shares an organization's human resource obligations and liabilities and may take over the entirety of human resource activities. It employs a minimum of five to ten people. It works for the organization it is associated with, in all countries.

PEO vs EOR

Employment rules and regulations get increasingly complicated and diversified when a business expands across regions.

If a business works with a PEO, it must create a legal presence in each state or nation where it has workers. However, if the corporation's EOR spans many countries, the corporation is legally permitted to hire people in those states through the EOR.

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Conclusion

When expanding into Kenya, partnering with Skuad may significantly decrease the traditional brick-and-mortar procedures associated with conducting business in international locations, allowing you to concentrate on what you do best: developing your business! To learn more about how we, the Skuad team, can help you streamline your worldwide expansion efforts, please contact us.

FAQs

1) What is an employer of record in Kenya?

An Employer of Record (EOR) in Kenya legally employs your Kenyan staff and handles payroll, benefits, taxes, social security contributions, and HR compliance as per local laws and legal standards without setting up a local entity. To know more about cost of employment in Kenya, click here.

2) What is the employer of record service agreement?

An Employer of Record (EOR) service agreement formalizes your partnership with an EOR provider. It outlines their legal responsibilities as the employer of your overseas staff. This includes handling tasks like payroll, tax withholding, and benefits administration. The agreement clarifies service terms for both parties, ensuring smooth collaboration and protecting you from legal risks associated with international hiring.

3) What is the employer of record for international employees?

Employer of Record services help companies seeking to leverage international talent pools. They own legal responsibilities for your employees in different countries. This eliminates the need for a local entity.

4) How does an EOR work?

An Employer of Record becomes the legal employer for your international workers, taking on the full weight of HR responsibilities. This includes ensuring compliance with local employment laws, managing onboarding, payroll, and taxes, and administering benefits.

5) What is the difference between EOR and PEO?

An employer of record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) co-employs staff, sharing responsibilities with the client company but typically requires the client to have an established business entity in the country.

Kenya

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Employer of Record in Kenya