How to Calculate Overtime Pay in Kenya

To calculate overtime pay in Kenya under the Regulation of Wages (General) Order, multiply qualifying overtime hours by the applicable hourly rate and then by 1.5 for ordinary overtime or 2 for work on a normal rest day or public holiday. First establish the employee's applicable wage order, normal weekly hours and hourly base. For employees not paid by the hour, the Order sets an hourly minimum of the basic minimum monthly wage divided by 225, rather than a universal rule to divide every actual salary by 225.

Confirm Which Rules Cover the Employee

Do not begin with a salary figure. Begin with the instrument governing the employee's working hours and overtime entitlement.

Use this decision path:

• Agricultural worker: the General Order expressly excludes workers in the agricultural industry. Identify the applicable agricultural rules instead of using the General Order's calculation automatically.
• Employee covered by a sector-specific wage order: establish that order's hours, hourly-rate provisions and overtime rules before calculating.
• Employee covered by the General Order: use its weekly-hours provisions, overtime multipliers and hourly-rate floor.
• Employee with contractual or collective-agreement terms: compare those terms with the statutory minimum. Under section 26 of the Employment Act, more favourable applicable terms prevail.

This matters when an employer has copied a standard overtime clause across different roles. A common payroll setting is not evidence that the same wage order or working-week definition applies to every employee.

Establish the Normal Working Week

Under the General Order, the normal working week is no more than 52 hours spread over six days. For a person employed on night work, it is no more than 60 hours per week.

These provisions come from the General Order, not directly from the Employment Act. Section 27 of the Act requires employers to regulate working hours in accordance with the Act and other written law, and provides at least one rest day in every seven-day period.

Ordinary Overtime Uses the Applicable Weekly Threshold

The General Order describes ordinary overtime as time worked beyond the normal number of hours per week. Do not configure a universal eight-hour daily trigger and present it as the General Order's rule.

Equally, do not automatically postpone overtime until the General Order's maximum where a more favourable applicable contract or collective agreement establishes a different entitlement. Record the normal week and the overtime trigger supported by the employee's governing terms.

Rest-Day Work Is a Separate Category

Identify the employee's normal rest day from the working arrangement and roster. Sunday is not automatically that day.

For employees covered by the General Order, work on the normal rest day or a public holiday attracts twice the normal hourly rate. Classify these hours separately from ordinary weekly overtime so payroll does not accidentally process them at the lower multiplier.

Set the Correct Hourly Base

The hourly base is where a convenient calculator can produce a misleading result. Separate employees paid by the hour from those paid on another basis.

Employees Paid by the Hour

Start with the employee's normal hourly rate under the applicable terms. Apply the ordinary-overtime or rest-day/public-holiday multiplier to the relevant hours, taking account of any more favourable entitlement.

Keep the rate source with the calculation, such as the contract or applicable collective agreement. That makes a later pay query traceable to a documented rule rather than a payroll operator's assumption.

Monthly-Paid and Other Non-Hourly Employees

The General Order states that the basic hourly rate for overtime purposes is deemed to be not less than one two-hundred-and-twenty-fifth of the employee's basic minimum monthly wage.

The statutory floor is therefore:

Basic minimum monthly wage ÷ 225

The words “not less than” matter. This is a minimum, not permission to replace a more favourable contractual calculation with a lower figure.

Check the applicable wage schedule by occupation and geographic area. The 2026 amendment replaced the General Order's wage schedule and is deemed to have come into operation on 1 May 2026, so the wage floor must match the relevant pay period.

If the governing agreement uses actual basic salary divided by 225, document that as the applicable agreed calculation and check it against the statutory floor. Do not describe it as the exact statutory wording, and do not automatically substitute gross salary, which may include other pay components.

Calculate Each Overtime Category Separately

Use the following calculation sheet after establishing coverage, qualifying hours and the hourly base.

Add the calculated amounts to obtain gross overtime pay. Where a contract or collective agreement provides a more favourable rate or calculation, use that entitlement instead.

For a monthly-paid employee, the calculation trail should show the applicable minimum monthly wage, its division by 225, and the hourly rate ultimately used. For an hourly-paid employee, it should show the normal hourly rate and its source.

Check that the same attendance hours have not been accidentally entered into multiple categories. Keep any contractual rule about overlapping entitlements explicit rather than letting the spreadsheet silently decide it.

Turn Attendance Into an Auditable Payroll Input

Ask the approving manager to submit a calculation record containing:

• Employee, role and applicable wage order.
• Relevant contract or collective-agreement provision.
• Normal weekly hours and rostered rest day.
• Actual attendance dates and hours worked.
• Ordinary, rest-day and public-holiday hours in separate fields.
• Hourly-rate calculation and the wage schedule used.
• Applicable multiplier, calculated amount and approval.

Treat this as a recommended control workflow, not a claim that every field is a prescribed statutory form. Approval should help establish what work occurred and how it was classified; it should not replace checking the employee's entitlement.

Use employee management to organise the roster and attendance evidence, and carry the approved calculation into payroll. As an audit practice, show overtime separately from basic pay and keep the underlying calculation with the payroll record. A payslip figure alone does not explain the hours or rate behind it.

Apply Payroll Deductions After Calculating Entitlement

KRA identifies overtime as a taxable cash payment received in respect of employment. Calculate the gross overtime entitlement first, then include it in taxable employment income for PAYE, subject to applicable allowable deductions and reliefs.

Employers must deduct PAYE, file the return through iTax and remit the tax on or before the 9th day of the following month. The employee's additional take-home pay is therefore not necessarily equal to the gross overtime amount.

Overtime can also affect gross-pay-based deductions. KRA states that Affordable Housing Levy is charged at 1.5% of gross monthly salary for the employee, with a matching 1.5% employer contribution. Where overtime increases that salary base, account for the levy effect and the employer contribution when budgeting.

Use the Kenya PAYE calculator to review the gross-to-net effect after establishing the legal overtime amount. A net-pay calculation cannot determine which hours qualify or which wage order applies.

Kenya PAYE calculatorWork out net pay and every deduction for any salary.

Sources

Kenya Law - Regulation of Wages (General) Order - Coverage, weekly hours, overtime multipliers and the minimum hourly-rate calculation. Kenya Law - Employment Act - More favourable employment terms, regulation of working hours and weekly rest entitlement. Kenya Law - Regulation of Wages (General) (Amendment) Order, 2026 - Replacement wage schedule, occupation and geographic classifications, and commencement. Kenya Revenue Authority - PAYE Brochure 2026 - Overtime as taxable employment income. Kenya Revenue Authority - Pay As You Earn - Employer PAYE deduction, filing and remittance obligations. Kenya Revenue Authority - Collection of the Affordable Housing Levy - Employee and employer levy rates and the gross monthly salary base.

Frequently asked questions

What is the overtime rate in Kenya?+

Under the Regulation of Wages (General) Order, ordinary overtime is paid at 1.5 times the normal hourly rate, while work on the employee's normal rest day or a public holiday is paid at twice that rate. First confirm that the General Order covers the employee. More favourable terms under an applicable contract, collective agreement or other governing instrument apply.

Should I divide basic salary or gross salary by 225?+

The General Order says the basic hourly rate for a non-hourly employee must be not less than the employee's basic minimum monthly wage divided by 225. It does not prescribe dividing every employee's actual gross salary by 225. Check the applicable minimum wage and any more favourable contractual or collective-agreement calculation before setting the hourly base.

Does overtime start after eight hours a day?+

The General Order's ordinary-overtime provision uses hours beyond the applicable normal working week, not a universal eight-hour daily trigger. Its normal working week is no more than 52 hours spread over six days, or 60 hours for a person employed on night work. A more favourable applicable agreement may establish a different entitlement.

Is Sunday always paid at double time in Kenya?+

No, Sunday is not automatically every employee's normal rest day. Under the General Order, double time applies to work on the employee's normal rest day or a public holiday. Check the roster and any more favourable contractual or collective-agreement terms before classifying Sunday work.

Is overtime pay taxable in Kenya?+

Yes, KRA classifies overtime as a taxable cash payment received in respect of employment. Calculate the gross overtime entitlement first, then include it in taxable employment income when calculating PAYE, subject to applicable deductions and reliefs. Do not treat the gross overtime amount as a guaranteed increase in take-home pay.