What a Kenyan employer pays on top of salary

The contributions a Kenyan employer pays on top of gross salary, NSSF, the Housing Levy and the NITA levy, and how to budget for them in a new hire.

By Achekam · 11 October 2026 · 4 min read · For Running a business businesses in Kenya

When a Kenyan business agrees a gross salary with a new hire, the number in the offer letter is not what the job will cost. On top of it, the employer pays its own share of several contributions, each with its own rate, cap and collector. Leave them out of the budget and every hire costs more than planned.

This article covers only the employer's side: what the business pays in addition to gross pay, at the time of writing. What comes off the employee's payslip is a separate question, covered in Kenyan payroll deductions and who collects them. Rates change, so confirm each one with the collecting body before you rely on it.

The employer's NSSF match

From February 2026, NSSF contributions are 6% from the employee and 6% from the employer, on pensionable pay up to KES 108,000 a month. The employer's share is therefore at most KES 6,480 a month for each employee.

The contribution has two tiers:

So the employer's NSSF cost rises with pay until pensionable pay reaches KES 108,000, and then stops. Contributions are remitted to the NSSF by the 9th. The NSSF explains on its employers' page how a business registers as an employer, and the employer's duty to register every employee and pay contributions by the 9th of the following month.

The employer's Housing Levy

Kenya's Affordable Housing Levy is 1.5% of gross monthly pay from the employee plus 1.5% from the employer. Unlike NSSF, the levy is a share of the whole gross pay, so the employer's cost keeps growing with pay. KRA collects it within nine working days after the month end, and late payment costs 3% a month.

The NITA levy per employee

Kenyan employers also pay a NITA training levy of KES 50 per employee per month. It is an employer cost, not a deduction from pay, so it never appears as a deduction on the payslip. NITA's own levy page sets out how and when it is paid.

Who collects what

The three employer costs go to different places, which matters for paying them on time:

• KRA collects PAYE and the Affordable Housing Levy;
• NSSF contributions go to the NSSF;
• the NITA levy is not collected by KRA.

Paying the right body by the right date is part of the cost: the Housing Levy's late-payment charge alone can add up quickly. Late payment penalties on Kenyan payroll covers what happens when a date is missed.

Each cost in its own liability account

Achekam runs Kenyan payroll with PAYE, the Affordable Housing Levy, SHIF, NSSF Tier I and II and the NITA levy, and prepares the P10, SHIF, NSSF and NITA schedules and each employee's P9A. Its Kenyan payroll calculates PAYE with personal and insurance relief and each of those contributions.

When a pay run is approved, it is posted to the business's own ledger as a wages journal, with amounts owed to the tax authority and funds shown as liabilities. Each contribution posts to its own liability account, for example PAYE and Housing Levy Payable (KRA). That separation is what lets you see, at any month end, how much is owed to each collector, and check that what you paid matches.

Payroll cost reports by department

Payroll reports in Achekam show cost, headcount and staff movements by month and by department. For budgeting, the cost report is the one to use: it shows what each department really costs, including the employer's contributions, rather than just the gross salaries.

Compare it with the budget. A business can set a budget per account and period and compare it with actual figures from its ledger, so the wage and contribution accounts can carry a monthly budget that reflects the employer's share.

Budgeting for a new hire

A worked example in words. A business plans to hire a finance manager at a gross monthly salary above KES 108,000. Its monthly cost of employment is:

• the gross salary;
• plus the employer's NSSF, which at that pay is the maximum of KES 6,480;
• plus the employer's Housing Levy at 1.5% of the gross salary;
• plus the NITA levy of KES 50.

For a junior hire on lower pay, the employer's NSSF is 6% of pensionable pay instead of the maximum, and the other two items work the same way.

Remember that pensionable pay and gross pay are not always the same figure. If some allowances are left out of pensionable pay, the NSSF share is worked out on the smaller amount while the Housing Levy still uses gross pay. Check how each allowance is treated before you build the budget, not after the first payslip.

A budgeting checklist for every new post:

1. Gross salary, and any allowances that form part of gross pay.
2. Employer's NSSF at 6% of pensionable pay, capped at KES 6,480.
3. Employer's Housing Levy at 1.5% of gross pay.
4. NITA levy of KES 50 a month.
5. Any benefits the business pays on top, such as medical cover or a pension scheme of its own.
6. A note of the date each rate was checked, so the budget can be refreshed when rates change.

Before the offer letter

Run the checklist for the next post you plan to fill, and give the hiring manager the full monthly cost rather than the salary alone. Then, once the hire is on payroll, check the first month's department cost report against the figure you budgeted.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.