Employer of Record in Kenya

How hiring through an employer of record works in Kenya

The local employer signs the Kenyan contract and pays the statutory lines, while your managers direct the daily work. Under section 9 of the Employment Act, a contract lasting three months or more must be in writing, and section 10 requires particulars such as hours and the rate of pay within two months of the start. NITA's guidance says every employer operating in Kenya must register as a levy payer.

Employer costs and contributions in Kenya

NSSF's Year 4 notice sets 6% each for employee and employer, with Tier I on the first KSh 9,000 (KSh 540) and Tier II on earnings up to KSh 108,000 (up to KSh 5,940). The maximum is KSh 6,480 per side, due by the 9th of the following month.

The Affordable Housing Levy is 1.5% of gross monthly pay from the employee and a matching 1.5% from the employer, due by the 9th working day after month end. The NITA training levy is KSh 50 per employee per month, paid by the employer through the PAYE return and due on the 9th.

SHIF is an employee contribution, deducted by the employer and remitted by the 9th, and the SHA charges 2% a month on late amounts. If pensionable earnings equal gross pay and stay at or below KSh 108,000, the employer's NSSF and housing levy lines add up to 7.5% of pay, plus KSh 50 for NITA. Your quote confirms the full figure.

Income tax withholding in Kenya

KRA's PAYE page lists monthly bands of 10% on the first KSh 24,000, then 25%, 30% and 32.5%, and 35% above KSh 800,000, with personal relief of KSh 2,400 a month. Employee housing levy and SHIF contributions are deductible, as are registered pension contributions up to KSh 30,000.

Leave, hours and pay rules in Kenya

• Annual leave: at least 21 working days with full pay after every 12 months of service.
• Sick leave: after two months, 7 days with full pay and then 7 with half pay in each 12 months, on a medical certificate.
• Parental leave: three months of maternity leave with full pay on seven days' written notice, and two weeks of paternity leave with full pay.
• Hours: the Act leaves hours to the employer within written law and gives at least one rest day in seven.
• Minimum wage: Regulation of Wages orders set it by occupation and area, and the Ministry of Labour's General Wages Council determines it. Your quote confirms the current schedule for the role and location.

Probation, notice and termination in Kenya

Probation cannot exceed six months and can be extended by up to six more only with the employee's agreement. Either side can end it on seven days' notice, or the employer can pay seven days' wages instead.

After probation, a monthly-paid contract ends on 28 days' written notice unless it sets a longer period. Service pay for each year worked is owed unless the employee belongs to a scheme named in section 35(6), which includes the NSSF. The employer must prove a valid, fair reason and a fair procedure, or the termination is unfair (section 45). Redundancy under section 40 needs notice to the labour officer, a month's notice or wages, and severance of at least 15 days' pay per completed year.

Getting paid in stablecoins, USDC, USDT, tokens and crypto in Kenya

Short answer: No. Section 17(1) of the Employment Act 2007 requires wages to be paid directly in the currency of Kenya, by cash, bank deposit, cheque or similar, and the Central Bank of Kenya says virtual currencies are not legal tender, so a USDC payout cannot replace shilling pay.

What the law says about the form of pay

Section 17(1) of the Employment Act 2007 requires the whole of the wages to be paid directly, in the currency of Kenya: in cash, into a bank or building society account the employee designates, by cheque, postal order or money order, or to a person the employee authorises in writing. Section 17(5) allows an allowance in kind only with the employee's consent and for their personal use. The Central Bank of Kenya's December 2015 public notice says virtual currencies such as Bitcoin are not legal tender in Kenya.

What it means for employee salary

A Kenyan salary therefore stays in shillings, and USDC or USDT cannot replace it. No official source reviewed here lets employer and employee agree to settle wages in stablecoins. The Virtual Asset Service Providers Act 2025 is a licensing law: the National Treasury says it makes the Central Bank of Kenya the regulator of wallet providers, payment processors and stablecoin issuance, and the Capital Markets Authority the regulator of exchanges and brokers. What applies to a specific hire is confirmed when Toku checks the arrangement.

Tax on crypto and tokens

KRA's iTax notice says the digital asset tax was repealed, with payment slips only for transfers before 30 June 2025, and a KRA notice applies a 10% excise duty from 1 July 2025 to fees that virtual asset providers charge. No KRA page opened says how crypto received as pay, or sold later, is taxed for an employee, so that is confirmed before an offer.

How Toku handles it

Employee salary in Kenya stays in local currency. Toku’s stablecoin payroll and its USDC or USDT payouts through contractor management are separate arrangements from employee salary, and token grants are administered through token grant administration. What applies to a specific hire in Kenya is confirmed before an offer.

Reviewed November 7, 2026 against the official sources listed below. General information, not legal or tax advice. Tax on crypto or tokens received depends on local rules and where the person is resident, so confirm it with a local adviser.

How hiring through Toku works in Kenya

1. Share the role, location, salary and start date.
2. Toku confirms coverage, the contract type and the right to work.
3. The local employer issues the contract and onboards the person.
4. Payroll, contributions and filings run each cycle.

Toku checks the role, location and contract terms before a start date is set. Prepare identification, bank details and the agreed shilling salary, and expect the local employer to handle the written contract and payroll registrations. Your quote confirms the onboarding timeline for Kenya.

What an employer of record costs in Kenya

Where Toku supports the hire, its employer of record service starts at $599 per employee per month, with salary, employer contributions and benefit premiums itemized in your quote. Coverage in Kenya is confirmed before an offer. See the published pricing.

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