# Employer of Record in Kenya: Costs, Alternatives

> What an employer of record does in Kenya, what providers charge, when an EOR beats opening an entity, and how to switch to direct employment later.

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

If you want to employ someone in Kenya but have no Kenyan company, you have three honest options: register an entity, engage the person as an independent contractor (only if the work genuinely is contracting), or use an **employer of record**. This guide covers the third option: what an EOR actually does, what it costs, and when it stops making sense.

## What an EOR does

An employer of record is a Kenyan company that employs your worker on paper so that you do not have to. In practice the EOR:

- issues an employment contract that complies with the [Employment Act, 2007](https://www.labourmarket.go.ke/media/resources/The_Employment_Act_2007.pdf);
- runs monthly payroll and remits **PAYE, NSSF, SHIF, the Affordable Housing Levy and the NITA levy** to KRA and the funds (see [Kenya payroll for foreign employers](https://cazini.co.ke/guides/kenya-payroll-foreign-employers) for what each one is);
- issues payslips and the annual P9;
- administers statutory leave - 21 working days annual leave, 3 months maternity, 2 weeks paternity;
- handles terminations in line with the Act's notice, hearing and severance rules.

You direct the work. The EOR invoices you monthly for gross salary, the employer's statutory contributions and its service fee.

## What it costs

On top of salary and employer contributions, the EOR charges a per-employee monthly fee. Published list prices for Kenya in late 2026:

| Provider (published list price) | Per employee / month |
| --- | --- |
| Deel | from USD 599 |
| Teamed | USD 599 flat |
| Playroll | from USD 399 |

Industry guides put the broader market range at roughly **USD 150-600 per employee per month**, with Kenyan providers at the low end and global platforms at the high end. Treat all of these as list prices, not quotes - most providers discount for volume, and some quote a percentage of salary instead of a flat fee. On a KES 150,000 salary, a USD 500 fee adds roughly 40% to the employee's cost; on a KES 600,000 salary it adds roughly 10%. The maths of an EOR gets better as salaries rise and worse as teams grow.

For what the employee themselves costs - employer NSSF, Housing Levy and NITA on top of gross - see [the cost of hiring an employee in Kenya](https://cazini.co.ke/guides/cost-of-hiring-employees-kenya).

## When an EOR is the right call

- **1-5 employees and speed matters.** An EOR can have someone employed in days. Registering an entity, opening a bank account and getting tax registrations in order typically takes weeks.
- **You are testing the market.** If the Kenya bet may be unwound in a year, an EOR is far easier to exit than a company is to wind up.
- **You have no one on the ground.** Payroll deadlines in Kenya are real: PAYE, NSSF and SHIF all fall due by the 9th of the following month, with penalties for missing them.

## When it stops making sense

- **Fees outgrow an entity.** Ten employees at USD 500 each is USD 5,000 a month - more than the running cost of a small subsidiary with payroll software and an accountant.
- **You need to trade.** An EOR employs people; it does not sell for you. Invoicing Kenyan customers in KES, bidding for tenders, or holding regulated licences needs your own entity - see [setting up a company in Kenya as a foreigner](https://cazini.co.ke/guides/setting-up-a-company-in-kenya-foreigner).
- **Key people and IP.** Senior hires often prefer employment by the company they actually work for, and IP assignment is cleaner with a direct contract.

## Switching from an EOR to your own entity

1. Register the subsidiary or branch and complete KRA, NSSF, SHIF and Housing Levy registrations.
2. Offer each employee a new contract with your entity on terms no worse than their EOR contract, recognising continuous service.
3. Agree the handover date with the EOR so that one month's payroll is run by the old employer and the next by the new one, with no gap in NSSF or SHIF contributions.
4. Collect the employment records - contracts, payslips, leave balances, P9s - from the EOR. You will need them for audits and disputes later.

## Watch-outs

- **The EOR's compliance is your problem in practice.** If contributions are not remitted, the employee's SHIF cover lapses and the mess lands on your relationship with them. Ask providers for proof of remittance, not just invoices.
- **Misclassification dressed as contracting.** Some providers offer a cheaper "contractor management" tier. If the person works your hours, under your direction, with your tools, a Kenyan court can find employment regardless of the label - see [hiring remote workers in Kenya](https://cazini.co.ke/guides/hire-remote-workers-kenya) for how the tests work.
- **Notice and severance still apply.** Terminating through an EOR still requires Employment Act process: valid reason, a hearing, notice, and severance where redundancy applies.

## How Cazini helps

Cazini is not an employer of record - it is the system you run employment on once you employ directly. When you move from an EOR to your own Kenyan entity, Cazini gives you contracts and employee records, leave, attendance and payroll that calculates PAYE, NSSF, SHIF and the Housing Levy and pays salaries to M-Pesa and bank accounts. See [payroll](https://cazini.co.ke/payroll) and [employee management](https://cazini.co.ke/employee-management).

## Sources

- [Employment Act, 2007 (Ministry of Labour copy, PDF)](https://www.labourmarket.go.ke/media/resources/The_Employment_Act_2007.pdf)
- [Deel: hire employees in Kenya](https://www.deel.com/hiring/employees/kenya/) - published EOR pricing
- [Playroll: do I need a local entity to hire in Kenya?](https://playroll.com/compliance-hub/local-entity-required-to-hire-in-kenya)
- [Teamed: Kenya hiring guide](https://www.teamed.global/country-hiring-guides/kenya) - published EOR pricing
- [Payoneer: employer of record in Kenya](https://www.payoneer.com/resources/workforce-management/eor-country-guides/kenya/) - EOR fee ranges
- [KRA: Pay As You Earn](https://www.kra.go.ke/individual/filing-paying/types-of-taxes/paye)

## Frequently asked questions

### What is an employer of record in Kenya?

An employer of record (EOR) is a Kenyan-registered company that becomes the legal employer of your staff in Kenya. It issues Employment Act-compliant contracts, runs payroll and remits PAYE, NSSF, SHIF, the Housing Levy and the NITA levy, while you direct the employees' day-to-day work and reimburse the EOR for salary plus its fee.

### How much does an employer of record cost in Kenya?

Published list prices in late 2026 run from roughly USD 150 to USD 600 per employee per month, depending on the provider and headcount, on top of the employee's salary and the employer's statutory contributions. Always get a current quote - list prices change and discounts for volume are common.

### Is an EOR legal in Kenya?

Yes. The EOR is simply a Kenyan employer in law. What matters is that the EOR's contract with your worker complies with the Employment Act, 2007 and that statutory deductions are remitted. You remain responsible for how the person is actually treated day to day.

### When should I stop using an EOR and open my own entity?

A common rule of thumb is when the monthly EOR fees across your team approach what a local entity costs to run, or when you need to sign local contracts, bid for tenders, invoice Kenyan customers in KES or hold licences in your own name. Many companies start with an EOR for 1-5 hires and register a subsidiary once the team is proven.

### Can I move employees from an EOR to my own Kenyan company?

Yes. The usual route is to register your entity, then offer each employee a new contract with your company on terms no worse than the old ones, with continuity of service recognised. Handle accrued leave and seniority explicitly in the new contract so nothing is silently lost.