Employer of Record in Kenya

With the Marzuna EOR (Employer of Record) service, you may grow your company into Kenya without first forming an organization. With the help of our automated and integrated global HR platform, you can effectively and legally manage your remote employees’ payroll, benefits, and other HR-related operations. With the aid of our extensive worldwide network, we assist you in streamlining the process of going global.

Overview of Kenya

• Population: 48.69 millions
• Currency: Kenyan shilling
• Capital city: Nairobi
• Languages spoken: Swahili, English
• GDP growth rate: 6.9%

Employment Landscape in Kenya

Kenyan employment regulations must be followed by both foreign nationals and local residents. But there are big differences between their rights. Let’s examine some of the unique aspects and other aspects of Kenya’s employment rules.

Before beginning business operations in Kenya, a company must be well aware of the employment laws governing the country. In actuality, they are rather similar to employment regulations in many other nations, despite their seeming complexity. To avoid or lessen the difficulties that may come for companies opening a local office, it is advised to collaborate with a local payroll provider who is knowledgeable with Kenyan laws pertaining to both local and international employees.

Entitlements	Explanation
Statutory Working Hours	Depending on the business, the normal workweek is usually between 40 and 52 hours spread across six days. Employees on the night shift may put in up to 60 hours each week. From 6:30 p.m. until 6:30 a.m. is the night shift. Younger workers (16 years old and under) are permitted to work up to 36 hours a week. The seventh day is a day off for the workers after six days of work. People who work on a rest day get paid at a rate that is double the standard rate. On statutory holidays, workers are entitled to 200 percent of their usual wage.
Overtime eligibility	In two weeks, the sum of normal daytime hours and overtime cannot exceed 116 hours. Overtime and midnight labor cannot total more than 144 hours in two weeks. Overtime pay on workdays is equal to 150 percent of the basic rate. On Sundays and public holidays, overtime is paid at a rate of 200% of the base rate.
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	After one year of employment, employees are entitled to 21 days of paid leave every year. of service.
Sick Leave	Every year, employees are entitled to 14 days of paid sick leave after working for two consecutive months. An employee’s medical certificate must be provided. When an employee has at least two months of service, the first seven days are fully remunerated. 50% of the remaining days are paid.
Maternity and Paternity Leave	With seven days’ notice, female employees are entitled to three months of paid maternity leave. The choice to prolong maternity leave is up to the employer. A male employee’s right to two weeks of paid paternity leave is guaranteed.

Contractors vs Full-Time Employees

When someone is considered an employee, they are also responsible for Social Security and Medicare taxes, as well as for withholding, depositing, reporting, and paying employment taxes.

When a worker is acknowledged as an independent contractor, part of the administrative burden is lifted off them. In addition to having no perks, independent contractors are in charge of planning and filing their own income taxes on a quarterly basis.

Employment Agreements

A documented employment contract that details the employee’s compensation, perks, and reasons for termination must be in the local language in Kenya. In Kenya, the offer letter and job contract must always specify the pay and any other remuneration in Kenyan shillings rather than in a different currency.

Probation & Termination

In Kenya, employment contracts may be terminated by either the employer or the employee, subject to any applicable notice or payment obligations. The specific notice periods can vary based on the frequency of payments and the conditions outlined in the employment contract:

• For employees paid on a daily basis, no notice period is typically required, and the contract concludes at the end of the termination day or resignation day.
• If the employee is paid less often than once per month (e.g., weekly or bi-weekly), the contract typically expires at the end of the pay period following the receipt of written notice.
• Employees paid on a monthly or longer basis usually must provide a 28-day notice before the contract can be terminated.

It’s important to note that employment contracts may include clauses specifying longer notice periods, and the party terminating the employment relationship may opt to provide a monetary settlement in lieu of notice. In cases where an employee resigns, the employer has the option to terminate the notice period but must compensate for any lost wages.

During the probationary period, which is generally of short duration, either party may terminate the employment agreement by giving the other party a 7-day notice or a payment in lieu of notice. The probationary term may be extended by mutual consent for an additional six months.

Upon termination, employers are obligated to settle any unpaid salaries with the departing employees. Employees paid on a monthly basis may also be eligible for severance compensation, depending on the terms outlined in the employment contract.

Employers must submit a written report detailing the reasons for dismissal to the appropriate district employment service center, along with the notice period or payment in lieu of notice.

In cases of serious misconduct, employers also reserve the right to terminate an employee immediately, without prior notice or with less notice than would typically be required.

These regulations uphold fairness and transparency in the workplace, ensuring that both employers and employees adhere to specified procedures when concluding employment contracts in Kenya.

EOR Solution in Kenya

The Kenya Employer of Record (Kenya EOR) solution makes it easier and faster for businesses to expand in Kenya. Without creating an organisation, using the EOR technique ensures smooth and compliant payroll and other employment duties processing. You may manage the monthly payroll, contracts, work permits, and taxes for your employees in Kenya with the help of our integrated employment platform.

Outsourcing Employment Through An Employer of Record

A corporation must choose its course of action while deciding to grow in Kenya. If you wish to manage payroll and employee lifecycle management, you may either build an internal team or engage an EOR.

Types of Visas in Kenya

Visa Category	Explanation
Class A	They are given to anyone who desires to take part in mining or mineral prospecting. These are the minimal needs. It is essential to secure the necessary licences and registrations or to have assurance that you will. A current prospecting mineral licence, a copy of the PIN, and sufficient funds or resources for investing are required for renewals.
Class B	They are given to people who want to make investments in agriculture and animal husbandry. These are the minimal needs. Evidence of land ownership or a leasehold interest in land used for this purpose is required, as is evidence of readily available capital, and approval from the relevant authorities. A current prospecting mineral licence and a copy of the PIN are required for renewals.
Class D	These are given to those who have been offered a certain position by a particular company and who are qualified to accept it. These are the minimal needs. A curriculum vitae and proof of academic or professional certificates Evidence showing the company was unable to fill the post through the local labour market A Form 25 that the company has completely filled out, obtained, signed, and sealed.
Class G	Investors in specific trades, enterprises, or consultancy are eligible for work visas. These are the minimal needs. Documented proof of a minimum investment of $100,000 USD, its equivalent in another currency, or any other currency. Copies of your personal and business PINs if your business is open for business; a company registration certificate OR a certificate of incorporation For renewals, audited financial accounts for the two years before and a Kenya Revenue Authority tax compliance certificate are required.
Class I	Members of a missionary group that has been approved by the Kenyan government and whose presence helps the country are given permits to operate and live in Kenya. These are the minimal needs. A copy of the organisation’s registration certificate A list of the applicant’s qualifications in terms of education and experience
Class K	Those who can demonstrate a reliable source of income from outside sources and who agree not to take any paid employment are granted a residency visa. These are the minimal needs. Class K requires substantiated proof of a guaranteed income..
Class M	Work permits are issued to conventional refugees.

Work Permit

International workers may be sponsored for work visas by a local partner with a Kenyan address.  In Kenya, the EOR is in charge of all employment-related responsibilities. Using our HR software, the client company may oversee the daily operations of its employees.

The estimated time frame for granting a work permit	From the time of admittance to Kenya, plus an extra one to two months for the procedure to be completed, Kenyan work permits typically take four to eight months to get.
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	A copy of the applicant’s diploma, degree, or professional qualification is required as proof of eligibility for the post. A Kenyan attorney should examine the copies..
Passport photographs	Two colour photographs of 35 mm x 45 mm each are needed for the passport. The images must have been recently taken. They must show the applicant’s face in close-up and their shoulders in profile. Headcovers are not permitted, save for religious reasons; in such cases, all facial traits must be clearly seen. • They must show the individual staring correctly at the camera. Photographs should be of acceptable quality and should not be deteriorated or defecated in any form without writing traces, lines, or plumes. Eyeglasses can be used, but the individual’s eyes should be clearly visible, and no shades can be used.
Fees	10,000 KSH must be paid in the form of a banker’s check that is not refundable to cover the fees associated with the application’s review.
CV	It must demonstrate appropriate professional and academic background.
E-Visa form	Online forms must be completed and printed twice before being signed and stamped by the sponsoring organisation.
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	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 helped firms swiftly hire new employees, pay them, and let them go when their employment contracts are up as needed.
• Our HR staff is your devoted ally if you want to quickly and safely get a work visa for an international application. We’ll take you through each step and provide you advice on the required paperwork.

Payroll & Taxes

Things You Must Know To Set Up Payroll In Singapore

When it comes to managing payroll and ensuring tax compliance in Kenya, meticulous attention is required, especially when dealing with international professionals or local residents. Familiarity with and adherence to local tax regulations, encompassing income tax, business tax, withholding tax, employee insurance, social safety contributions, and more, is of paramount importance.

To efficiently handle payroll and taxation matters in Kenya, two primary approaches are available:

• In-House Payroll Team: Establishing an in-house team in Kenya dedicated to payroll management. This team will bear the responsibility of ensuring compliance with local tax regulations and managing payroll processes internally.
• Engage a Local Payroll Specialist: Seeking the services of a local payroll professional with expertise in Kenyan payroll and tax regulations. This external specialist streamlines payroll management while guaranteeing strict adherence to all relevant rules and regulations.

Both options offer distinct advantages, and the choice should align with the specific requirements and resources of your business. By selecting the most appropriate method, you can adeptly navigate the intricacies of payroll and taxation in Kenya, thereby ensuring that your company remains fully compliant with all legal requisites.

Employer Taxation

Tax	Explanation
Income tax rates	Whether residents of Kenya for the entirety of their employment tenure or non-residents if their employer is a resident or has a permanent presence in Kenya, residents are subject to international taxation on their employment income. If a Kenyan citizen is present in Kenya for 183 days or more, or an average of 122 days throughout the same year or the two years prior, they should be considered people for tax reasons. Maintain a permanent address in Kenya The following individuals are subject to Kenyan personal income tax. Revenues from businesses and self-employment employment earnings Income from capital gains on the sale of real estate in Kenya.
Social security contributions	The social security payments are made up of 5% employer contributions. The tariff was increased. 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 makes a 5% contribution to social security benefits Must also pay a part of salary based on the employee’s income to the National Hospital Insurance Fund in addition to the 6% tariff increase.

Bonuses

Bonuses are paid to employees in an amount equal to one month’s salary.

Incorporation: How to Set Up a Subsidiary in Kenya

Kenya has become an increasingly attractive destination for entrepreneurs seeking to do business in a welcoming environment. Nonetheless, establishing a subsidiary in Kenya can be a complex and time-consuming endeavor. To address these challenges, an Employer of Record (EOR) solution presents a practical alternative, enabling organizations to build remote teams in Kenya without the necessity of establishing a legal entity.

The process of setting up a subsidiary in Kenya typically involves multiple steps, including:

• Obtaining approval and reserving a company name from the Registrar of Companies.
• Preparing and notarizing crucial documents such as the Memorandum, Articles of Association, and Statement of Nominal Capital.
• Signing the Declaration of Compliance.
• Completing and submitting all requisite forms.
• Registering for taxes with the Kenya Revenue Authority (KRA).
• Applying for a business permit.
• Registering with social security services.
• Creating a company seal.

Navigating the laws and regulations of a foreign country can be a daunting and time-consuming process, diverting valuable resources and potentially impeding business growth and expansion. However, by leveraging an EOR solution, organizations can establish their presence in Kenya without the need for entity setup, all while ensuring strict compliance with the country’s legal requirements.

By partnering with an EOR provider, businesses can efficiently manage the complexities of local laws, regulations, and administrative procedures. This empowers them to concentrate on their core operations and achieve their growth objectives in Kenya more effectively and with reduced administrative burden.

Working with us may greatly reduce the customary brick and mortar formalities related to conducting business in other countries when expanding into Kenya, enabling you to focus on what you do best: growing your business. Please get in touch with us to find out more about how the team can facilitate your global growth ambitions.