How to Process Payroll in Kenya 2026 Guide for Employers

How to Process Payroll in Kenya (Step-by-Step Guide)

Processing payroll in Kenya involves several steps to ensure employees are paid accurately while complying with statutory regulations.

Step 1 – Collect Employee Salary Information

Start by gathering employee salary details including:

• Basic salary
  
• Allowances
  
• Overtime payments
  

Step 2 – Calculate Gross Pay

Gross pay includes the total earnings before deductions.

Step 3 – Calculate Statutory Deductions

Employers must calculate deductions such as:

• PAYE income tax
  
• NSSF contributions
  
• SHIF contributions
  
• Housing Levy
  

Step 4 – Calculate Net Salary

Net salary is the amount employees receive after deductions.

Step 5 – Generate Payslips

Employees should receive detailed payslips showing earnings and deductions.

Step 6 – Submit Statutory Reports

Employers must submit required reports to tax authorities and statutory bodies.

Step 7 – Pay Employees

After payroll is processed, salaries are transferred to employees.

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