True cost to employ
Gross plus employer NSSF and levy
The cost of employing someone starts with gross salary, not take-home pay. PAYE and employee contributions are usually withheld from that gross salary. Adding them again on top of gross would double-count them.
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Employer additions to the salary
Budget the employer’s NSSF contribution and its Housing Levy share separately. Under the February 2026 NSSF limits, the employer matches the employee contribution up to KES 6,480 per month. Housing Levy is 1.5% of the applicable gross monthly salary. SHIF is not a second matching employer contribution simply because payroll remits it.
Illustration for ordinary monthly salary
| Gross salary | Employer NSSF | Employer levy | Subtotal before other costs |
|---|---|---|---|
| 30,000 | 1,800 | 450 | 32,250 |
| 50,000 | 3,000 | 750 | 53,750 |
| 100,000 | 6,000 | 1,500 | 107,500 |
| 150,000 | 6,480 | 2,250 | 158,730 |
The KES 107,500 subtotal for a KES 100,000 employee is not an all-in employment budget. It excludes any applicable training levy, insurance, equipment, benefits and contractual or termination costs. Use the employer’s actual obligations rather than a universal “25–40% extra” estimate.
Other items to budget explicitly
- Applicable NITA levy and work-injury insurance obligations.
- Contractual pension or medical benefits beyond statutory contributions.
- Recruitment, onboarding, equipment and software.
- Cover during leave, overtime and any contractual bonus.
- Notice, accrued benefits and other lawful exit obligations where relevant.
Paid annual leave is already included in a monthly salary where that salary continues through leave. Add replacement cover if needed, not another full salary charge for the same days. Not every departure creates the same severance entitlement.
Monthly compliance checklist
Register and maintain the relevant employer obligations. Verify employee identifiers, calculate the employee deductions and employer contributions, reconcile the payroll register, file the correct returns and retain payment evidence. PAYE and NSSF are due by the 9th of the following month; Housing Levy uses the ninth working day. Track each obligation separately.
Cashflow and reporting
Reconcile the sum of bank payments and withheld deductions back to gross salary. Then add the employer-funded amounts to reconcile the full cash requirement. Review member credits where relevant: an amount shown as deducted has not necessarily been remitted successfully.
See the employer PAYE filing guide, NSSF tiers and Housing Levy for more detail. The employer cost calculator provides a starting subtotal, not every possible employment cost.
Sources and review date
Reviewed on 21 October 2026. Use the rules for the period being calculated; historical payslips may use different limits.