Payroll Guide for Kenyan Employers

Before running payroll

Collect employee identification, KRA PIN, NSSF and SHA details, employment terms and the applicable pay period. Confirm tax residence and documented deduction or exemption claims. A disability registration card alone is not a tax exemption certificate. Keep access to personal payroll documents restricted to those who need it.

Calculate and check

Separate regular cash earnings, irregular payments and taxable non-cash benefits. Apply the correct statutory bases and pension limits. Deduct qualifying employee NSSF, SHIF and Housing Levy before PAYE, then apply resident personal relief and qualifying insurance relief. Treat HELB, SACCO and salary advances separately as cash deductions. Check benefits against the applicable KRA valuation rules.

Budget the employer share

For regular gross pay of KES 100,000, employee NSSF is KES 6,000 and the employer adds KES 6,000. The employer Housing Levy is KES 1,500, so gross plus these two employer contributions is KES 107,500. There is no general matching employer SHIF contribution. This is not the complete cost of employment: insurance, leave, training and other applicable obligations may add costs.

File and remit separately

PAYE filing and payment are due by the ninth day of the following month. NSSF remittance is also due by the ninth; do not use the fifteenth as a general NSSF deadline. Housing Levy is due within nine working days of month-end. Follow the relevant SHA and HELB remittance instructions. PAYE filing does not by itself prove that another agency has received its contributions.

Records, corrections and penalties

Retain payroll working, payslips, receipts, employee declarations and supporting certificates. Reconcile totals against agency statements and provide accurate P9 information. KRA lists late PAYE filing penalties as the higher of 25% of tax due or KES 10,000, with separate late-payment penalties and interest. Do not apply one penalty formula to every levy. Correct identified errors through the relevant portal and keep the reconciliation trail.

Sources and further checks

• KRA PAYE rates and deductions
• KRA December 2024 PAYE amendments
• KRA employer guidance
• NSSF Year 4 contribution notice

Use the linked topic articles below for detailed examples and eligibility checks.