One of the first questions any company asks when exploring employer of record services in Kenya is: how much does it actually cost? The short answer is that Kenya EOR costs have three components: the EOR management fee, the employee's gross salary, and the employer's share of Kenya statutory contributions. Understanding all three before you budget is essential — many global EOR platforms quote only the management fee, leaving companies to discover the statutory employer obligations separately. This guide explains all three components precisely, using the 2026 rates set by the Kenya Revenue Authority and the National Social Security Fund.
Component 1: The EOR Management Fee
The EOR management fee is the charge from the employer of record provider for the service of legal employment, payroll processing, statutory filings, HR compliance, and Employment Act advisory. The structure of this fee varies between providers:
- Fixed monthly retainer per employee: The most transparent model. You pay a fixed amount per employee per month, regardless of salary level or the number of payroll runs. Two Max Group charges USD 199 per employee per month (approximately KES 25,800 at current rates), inclusive of payroll processing, monthly PAYE filing on KRA iTax, NSSF and SHIF remittances, Employment Act contract management, and dedicated IHRM-certified HR advisory.
- Percentage of gross salary: Some global EOR platforms charge 10–20% of gross salary as their management fee. At a KES 300,000 gross salary, that would be KES 30,000–60,000 per month in fees alone — three to six times more than a fixed-fee model at that salary level.
- Minimum fee plus percentage: A hybrid that benefits the provider at higher salary levels.
When comparing EOR providers, always confirm whether the management fee includes payroll processing, PAYE filing, NSSF remittance, and HR advisory — or whether these are billed as separate line items. For a full comparison of what each model means for total headcount costs, see our guide on EOR vs company registration in Kenya.
Component 2: Gross Salary
The employee's gross salary is agreed between the client company and the employee during the hiring process. The EOR pays this gross salary in full and then recoups it from the client as part of the monthly invoice. In Kenya, gross salary must be paid in Kenya Shillings unless the employee holds a valid work permit and both parties agree in writing to payment in a foreign currency — a practice common in Kenya expat payroll arrangements.
Kenya's national minimum wage for urban general workers is KES 16,114 per month as of the 2025/2026 Wages Order. Professional roles attract market rates significantly above this floor, and sector-specific minimum wages apply in certain industries. The EOR confirms the applicable minimum for each role at engagement.
Component 3: Statutory Employer Contributions in Kenya 2026
These are non-negotiable employer obligations under Kenya law. They are paid by the EOR and recharged to the client as part of the monthly invoice. As of July 2026, the employer-side statutory contributions are:
- NSSF Employer Contribution (from February 2026): Under the NSSF Act 2013 Year 4 rates, the employer contributes an amount equal to the employee's contribution — capped at KES 6,480 per month per employee (Tier I: 6% of KES 8,000 pensionable pay = KES 480; Tier II: 6% of the difference between pensionable pay and the lower earnings limit, capped). In practice, for most employees earning above KES 24,000/month, the employer NSSF contribution is KES 2,160–6,480/month depending on pensionable pay. To keep the example simple, we use KES 2,160 (Tier I only) for employees below the upper earnings limit.
- Affordable Housing Levy (AHL) — Employer Share: 1.5% of gross salary, employer-matched. Introduced under the Finance Act 2023. For a KES 100,000 gross salary, the employer AHL contribution is KES 1,500/month.
- NITA Levy: The National Industrial Training Authority levy is payable by employers in the industrial sector at prescribed rates. It does not apply to all employers — the EOR confirms applicability at engagement.
Note: PAYE income tax and the employee's SHIF contribution (2.75% of gross) are employee deductions — the employer deducts these from gross salary and remits them. They are not an additional employer cost over and above gross salary, but they must be accounted for in the employee's net pay calculation. Our Kenya payroll processing service handles all of this automatically.
Worked Examples: Total Cost of Employment via EOR
The following examples show the total monthly cost to the client company for a Kenya employee hired through Two Max Group's EOR service at three gross salary levels. All figures are in KES and use July 2026 statutory rates.
Example 1 — KES 80,000 gross salary (junior professional):
- Gross salary: KES 80,000
- Employer NSSF contribution: KES 2,160
- Employer AHL (1.5%): KES 1,200
- EOR management fee (USD 199 ≈ KES): KES 25,800
- Total monthly cost to client: KES 109,160
Example 2 — KES 150,000 gross salary (mid-level manager):
- Gross salary: KES 150,000
- Employer NSSF contribution: KES 2,160
- Employer AHL (1.5%): KES 2,250
- EOR management fee: KES 25,800
- Total monthly cost to client: KES 180,210
Example 3 — KES 300,000 gross salary (senior director):
- Gross salary: KES 300,000
- Employer NSSF contribution: KES 6,480
- Employer AHL (1.5%): KES 4,500
- EOR management fee: KES 25,800
- Total monthly cost to client: KES 336,780
What the EOR Management Fee Includes at Two Max Group
The USD 199 per employee per month covers: Employment Act-compliant contract drafting and management; monthly payroll calculation; PAYE filing on KRA iTax by the 9th of each month; NSSF Tier I and II remittance; SHIF and AHL remittance; monthly payslip generation; annual P10 filing for income tax reconciliation; HR advisory by an IHRM-certified consultant (available by phone, email, and WhatsApp); leave management (annual, maternity, paternity, sick); disciplinary procedure support; and termination handling with substantive and procedural fairness documentation. There are no per-action charges, no additional PAYE filing fees, and no surprise invoices.
Hidden Costs to Watch for with Global EOR Platforms
Global EOR platforms (Deel, Remote, Oyster, and similar) frequently sub-contract Kenya employment to a local Nairobi partner and mark up the cost. Common additional charges include: payroll processing fees billed separately from the platform fee; monthly statutory filing fees; HR advisory charged per incident rather than included; work permit support billed per application; and currency conversion fees on the USD invoice amount. When comparing providers, request a single all-in invoice example at a specific gross salary so you can compare like with like. Two Max Group provides this at the proposal stage with no obligation.
EOR vs Self-Managed Entity: The Total Cost Comparison
The true comparison is not "EOR fee vs zero" — it is "EOR fee vs the cost of running your own Kenya entity payroll and HR compliance operation." A self-managed Kenya subsidiary with three to ten employees typically incurs KES 120,000–300,000 per month in company secretarial, payroll bureau, HR advisory, and audit costs, in addition to the salary costs. For a team of five earning an average of KES 150,000 gross, the entity overhead alone costs as much as or more than the EOR management fee for the equivalent headcount. For a precise comparison relevant to your specific headcount and salary levels, contact us for an EOR proposal and we will model both options with real numbers. See also our guide on what is an employer of record in Kenya for the full structural explanation.
