Kenya PEO Services

Under the Kenya Citizenship and Immigration Act 2011 all foreign nationals wishing to be employed by a Kenyan entity are required to apply for a Kenyan work permit. The Act provides that the presence in Kenya of a person who is not a citizen of Kenya shall be unlawful unless that person holds a valid work permit, residence permit or pass.

Employment Information

• The payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last day of the month. Contractual work such as consultancy services is paid once the job is done.
• Regular work hours are eight hours per day Monday through Friday and five hours on Saturday, making a 45-hour workweek. It is legal to work up to 52 hours a week, or 60 hours for night work. Employees are entitled to one day of rest out of every seven days.
• Overtime work is compensated at 150% of normal wages for weekday work and 200 per cent of normal wages for Sundays and public holidays. Additional overtime regulations apply to different sectors of the economy.

Leaves

• An employee is entitled to a minimum of 21 days of paid annual leave after completing one year of employment. An employer may, with the employee’s consent, divide the minimum annual leave entitlement into different parts to be taken at different intervals.
• There are 13 public holidays. If a holiday falls on a Sunday, then the following Monday is observed as a public holiday.
• After two consecutive months of service, employees are entitled to sick leave of not less than seven days at 100% of the employee's regular salary. After that, a further seven days at 50% of the regular salary.
  • All sick leave requires a professional medical certificate of incapacity to work.
• Women are entitled to three months of maternity leave paid at 100.00% of the regular pay rate. To be eligible, the woman must give at least seven days’ notice to their employer when the leave is intended to be taken and must provide a medical certificate. Married men are eligible for two weeks of paternity leave.

Visas

• Kenya’s immigration system provides several options for employers of foreign nationals. Business travellers must apply for an e-Visa to enter the country. Port-of-entry immigration officers will determine the authorized length of stay in Kenya, which is usually a maximum of 30 days, extendable twice for 30 days each at the Immigration Department in Kenya for a maximum of 90 days.
• A special pass can be obtained for short-term engagements (less than three months) or as an interim measure while waiting for a work permit to be issued. The special pass allows foreign nationals to work for up to 90 days.
• The work permit (Class D Permit) is suitable for skilled and experienced professionals or technical workers. It requires sponsorship from a Kenyan legal entity. Work permits are issued for one or two years and can be renewed for similar periods.
• Businesses looking to enter the Kenyan market can do so without a permanent entity in-country by engaging with a Kenya PEO partner. At Procorre Global, we provide PEO and EOR services for Kenya, regularly assisting international businesses with their global expansion journey.

Taxation

• Pay as you earn (PAYE) is the mandatory tax levied on all employees' income at the prevailing rates. In Kenya, the government manages the PAYE tax through the Kenya Revenue Authority (KRA), which collects the statutory contributions from the employer, before salaries and wages are paid to the employee. PAYE is paid on or before the 9th day of the following month. There are two more statutory deductions, these being the National Hospital Insurance Fund and the National Social Security
• Any person providing professional services as defined under the Income Tax Act under a contract for service shall pay tax on the professional fees received, which shall be withheld by the payer of the income. There are different withholding tax rates depending on the taxpayer’s tax residence.

Cultural Information

Kenya has over 40 different ethnic groups with different languages and dialects. English is the most widely used language aside from Swahili, so foreign nationals should not be too worried about language barriers.

The Constitution of Kenya guarantees freedom of worship and there are hundreds of religious denominations and sects in the country. The followers of the Christian faith are the majority, with 40% being Protestant and 30% Roman Catholic. Islam is the main religion for most of the communities along the coast and the Somali community. The Asian community is mainly Hindu. Some Kenyans observe traditional methods of worship.

Business culture in Kenya places emphasis on relationships, both personal and professional to boost good working conditions.

Impacts from COVID-19

Covid-19 has had a great impact in Kenya.

The government responded to the negative effects through various ways including:

• The government proposed a 100% tax relief on persons earning gross monthly income of KES 24,000. This is still in place.
• There was a reduction in corporate tax from 30% to 25% to allow companies to have additional resources to sustain their businesses during the Covid-19 period. The rate has since reverted to 30%.
• Value Added Tax (VAT) was also reduced from 16% to 14%. The rate has since reverted to 16%.
• Bank fees were waived for individuals who moved money between their bank account and mobile wallet. This has since been revised.
• The government also implemented new social assistance programmes for vulnerable Kenyans including the multi-agency Covid-19 cash transfer, the National Council for People with Disabilities cash transfer, and the Kazi Mtaani project which created jobs for the vulnerable as well as promoting hygiene through cleaning public places.
• The government further allowed and encouraged people to work from home wherever possible. This has had a significant effect on working relationships and has developed into a “working from home” culture with the bulk of business transactions and interactions being handled online. This culture is likely to persist beyond Covid-19.