True cost to employ
Gross plus employer NSSF and levy
An employee exit is not complete when a name disappears from next month’s payroll. The employer still needs an agreed calculation, payment evidence, statutory reconciliation and a usable record of pay and tax. Use this checklist to assign each step and avoid leaving a final settlement in an email chain.
The employer cost calculator can cross-check ordinary salary costs. It is not a terminal-dues calculator: notice, leave, severance and gratuity require separate classification. Use the employer payroll guide for the wider controls.
1. Confirm dates and outstanding inputs
Record the last day worked, contractual cessation date, period covered by salary and planned payment date. These may differ. Ask the responsible manager to approve attendance, overtime, commission and leave records before payroll closes.
Check the contract and exit documents for notice arrangements and any agreed payments. Do not assume that resignation, expiry of a fixed-term contract and redundancy create identical entitlements. Route a disputed entitlement for resolution rather than choosing a convenient payroll label.
2. Build an itemised final-pay schedule
- Salary earned and any unpaid earlier salary.
- Approved overtime, commission or bonus.
- Unused leave paid in cash, with days and the rate used.
- Notice worked or payment in lieu of notice.
- Any severance, gratuity or other separately identified payment.
- Reimbursements and each proposed deduction, supported individually.
For example, an approved schedule might contain KES 30,000 salary, KES 12,000 leave pay and KES 40,000 notice pay: KES 82,000 gross before deductions. That addition does not establish the tax due or whether each amount is legally payable. Keep the assumptions beside the figures.
Read unused leave pay and tax and notice pay and PAYE before combining those lines. Do not treat the whole settlement as an ordinary monthly salary or automatically exempt income.
3. Reconcile tax and deductions before payment
Document the period to which each taxable component relates, the applicable treatment and tax already accounted for. Review every non-tax deduction against its supporting records and lawful basis. An equipment handover issue is not, by itself, a calculation of an amount deductible from wages.
Have a second reviewer compare the approved gross components, deductions and net amount. Separately identify employer-funded costs so they are not accidentally charged to the employee. Give the employee an understandable breakdown and a contact for specific discrepancies.
4. Prepare the employee’s pay and tax records
KRA describes the P9 as the employer-issued summary of employment income for the year. As an exit control, reconcile the employee’s pay and tax record through the final payment and give them a clear statement of the figures. Agree how they will receive the year-end P9 after their work email closes; a bank receipt alone cannot explain the tax history.
For the employee’s next payroll, see changing jobs and PAYE records. Keep the tax certificate distinct from other employment documents.
5. Close remittances and leave a controlled adjustment route
Match deductions to the relevant submissions and payments, then retain acknowledgements and receipts. Removing a person from future regular salary runs should not delete their history or hide an unpaid deduction. Use the payroll records checklist for the archive.
Assign someone to handle a later bonus, arrears payment or correction. Recheck its tax treatment and update affected records rather than reopening the employee as an ordinary full-month starter. Maintain a closing log with the final payment date, outstanding items, owner and resolution evidence. That makes the exit auditable even after the original payroll administrator has moved on.
Sources and review date
Published and reviewed on 31 October 2026. Use the official instructions and rules applicable to the return period.