# Cost of Hiring an Employee in Kenya

> What a Kenyan employee really costs: employer NSSF, Housing Levy and NITA on top of gross, worked examples, and the costs people forget to budget.

Original page: https://cazini.co.ke/guides/cost-of-hiring-employees-kenya  
Updated: 2026-11-09 · Cazini (Paul Omondi)

Budgeting a Kenyan hire on gross salary alone understates the cost. The employer pays three statutory amounts **on top of** gross - NSSF, the Affordable Housing Levy and the NITA levy - and carries leave, severance exposure and benefits besides. Here is the full picture, with the rates in force today.

## What sits on top of gross pay

| Employer-paid item | Rate | Cap |
| --- | --- | --- |
| NSSF (pension), employer share | 6% of pensionable pay | Capped at the KES 108,000 upper earnings limit (max KES 6,480/month) - February 2026 limits |
| Affordable Housing Levy, employer share | 1.5% of gross pay | No cap |
| NITA industrial training levy | KES 50 per employee per month | Flat, paid with the PAYE return |

Everything else you see on a payslip - PAYE, the employee's 6% NSSF, SHIF at 2.75% (minimum KES 300) and the employee's 1.5% Housing Levy - comes out of the agreed gross. It changes take-home pay, not your cost. The full deduction-by-deduction walkthrough is in [Kenya statutory deductions](https://cazini.co.ke/guides/kenya-statutory-deductions).

## Worked examples

| Monthly gross | Employer NSSF (6%) | Employer AHL (1.5%) | NITA | Total monthly cost | On-cost |
| --- | --- | --- | --- | --- | --- |
| KES 50,000 | 3,000 | 750 | 50 | KES 53,800 | 7.6% |
| KES 100,000 | 6,000 | 1,500 | 50 | KES 107,550 | 7.6% |
| KES 150,000 | 6,480 (capped) | 2,250 | 50 | KES 158,780 | 5.9% |
| KES 300,000 | 6,480 (capped) | 4,500 | 50 | KES 311,030 | 3.7% |

Two things to notice. The NSSF cap means the on-cost **percentage falls** as salaries rise: statutory on-costs are 7.6% at KES 50,000 but only 3.7% at KES 300,000. And the Housing Levy is uncapped, so it keeps growing with salary where NSSF stops.

To see the employee's side of the same salary - what they take home after PAYE, NSSF, SHIF and the levy:

| Monthly gross KES 100,000 | KES |
| --- | --- |
| NSSF (employee) | 6,000 |
| SHIF | 2,750 |
| Housing Levy (employee) | 1,500 |
| Taxable pay | 89,750 |
| PAYE (after relief) | 19,308 |
| Net pay | 70,442 |

[Kenya PAYE calculator](https://cazini.co.ke/tools/kenya-paye-calculator) - work out net pay and every deduction for any salary.

## The costs that are not on the payslip

- **Paid leave.** 21 working days of annual leave plus Kenya's public holidays means you pay roughly 13 months of salary for 11 months of work, before sick leave (7 days full pay, 7 days half pay per year after two months' service).
- **Maternity and paternity leave.** 3 months on full pay for mothers, 2 weeks for fathers. Small teams should budget cover.
- **Severance exposure.** Redundancy costs at least 15 days' pay per completed year of service, plus notice. It is contingent, but on long-serving staff it is real money - see [termination and redundancy in Kenya](https://cazini.co.ke/guides/termination-redundancy-kenya).
- **Benefits the market expects.** Medical cover is customary for professional roles even though SHIF is mandatory; pension top-ups above NSSF are common in competitive sectors. Neither is legally required.
- **Recruitment and verification.** Advertising, screening time and [background checks](https://cazini.co.ke/background-checks) before the offer; getting this wrong costs far more than doing it once, properly.
- **Equipment and workspace**, and for foreign employers, banking and FX costs on funding the payroll account.

## An annual budget line that works

For a mid-range professional role, a safe planning figure is:

**13.5 x monthly gross + statutory on-costs + benefits.** The 13.5 covers 12 salary months plus leave accrual and a cushion for sick days; statutory on-costs are the table above; benefits depend on the role. For a KES 150,000 hire with KES 8,000/month medical cover, that is roughly KES 2.23M a year.

If you are comparing this with the cost of not employing at all - an employer of record or contractors - see [employer of record in Kenya](https://cazini.co.ke/guides/employer-of-record-kenya) and [hiring remote workers in Kenya](https://cazini.co.ke/guides/hire-remote-workers-kenya).

## How Cazini helps

Cazini's payroll calculates PAYE, NSSF, SHIF, the Housing Levy and NITA for every employee with the current rates, shows you the employer cost next to gross, and pays salaries to M-Pesa and bank accounts when you finalize the run. The [free Kenya PAYE calculator](https://cazini.co.ke/tools/kenya-paye-calculator) uses the same verified rate table. See [payroll](https://cazini.co.ke/payroll).

## Sources

- [KRA: Pay As You Earn](https://www.kra.go.ke/individual/filing-paying/types-of-taxes/paye)
- [NSSF](https://www.nssf.or.ke/) - Year 4 (February 2026) earnings limits: lower KES 9,000, upper KES 108,000, 6% each for employee and employer
- [SHA: employer compliance notice on SHIF remittances](https://new.sha.go.ke/wp-content/uploads/2025/07/PUBLIC_NOTICE_ON_EMPLOYER_REMITTENCES.pdf)
- [KRA: collection of the Affordable Housing Levy](https://www.kra.go.ke/news-center/public-notices/2099-collection-of-the-affordable-housing-levy-by-kenya-revenue-authority-2)
- [NITA: industrial training levy](https://www.nita.go.ke/) - KES 50 per employee per month, collected through KRA
- [Employment Act, 2007 (Ministry of Labour copy, PDF)](https://www.labourmarket.go.ke/media/resources/The_Employment_Act_2007.pdf) - leave, sick pay and severance provisions

## Frequently asked questions

### How much does an employee cost on top of gross salary in Kenya?

The employer pays NSSF (6% of pensionable pay, capped at the KES 108,000 upper limit), the Affordable Housing Levy (1.5% of gross, uncapped) and the NITA levy (KES 50 per employee per month). On mid-range salaries that is roughly 7-8% on top of gross; the percentage falls on higher salaries because NSSF is capped.

### Is PAYE a cost to the employer?

No. PAYE, the employee's NSSF share, SHIF and the employee's Housing Levy all come out of the agreed gross salary. The employer's own costs are its NSSF share, its Housing Levy share and NITA, which are paid on top and must not be deducted from the employee.

### What does a KES 100,000 employee cost in total?

About KES 107,550 a month - gross 100,000 plus employer NSSF 6,000, employer Housing Levy 1,500 and NITA 50 - before any benefits you choose to add, such as medical cover or a pension top-up.

### What non-statutory costs should I budget for?

Paid leave (21 working days a year plus public holidays), maternity and paternity leave, severance of 15 days' pay per year of service if you ever make the role redundant, recruitment and onboarding time, equipment, and any medical or pension benefits the market expects for the role.

### Do I pay these costs for probationary staff too?

Yes. Statutory deductions and employer contributions apply from the first payroll, probation or not. Probation only changes the notice rules, not the cost of employing someone.