Kenyan Payslip Requirements for 2026: An Employer's Guide

Why a Compliant Payslip is a Legal Requirement in Kenya

As an employer in Kenya, providing a detailed payslip is not a matter of good practice. It is a strict legal duty. The core Kenyan payslip requirements are defined in Section 20 of the Employment Act, 2007 (Cap 226), which mandates that every employee receives an "itemised pay statement" at or before the time of payment. This document is the official record of an employee’s earnings and all deductions for a given pay period. Failure to issue a compliant statement can result in formal labour disputes, financial penalties from the Ministry of Labour, and significant challenges during KRA tax audits. This guide details every mandatory component for a Kenyan payslip in 2026 to ensure your organisation stays compliant.

What Every Kenyan Payslip Must Include (Employment Act, Section 20)

The Employment Act provides the blueprint for a compliant payslip. It exists to create transparency and prevent misunderstandings between employer and employee. A legally sound payslip must clearly separate earnings from deductions, leaving no room for ambiguity. Here are the essential items.

1. Employer and Employee Identification

The payslip must begin with basic, unambiguous details that identify both the employer and the employee for record-keeping purposes.

• Employee’s Full Name and Number: The name as it appears on their national ID or passport, plus any internal employee number.
• Employer’s Full Legal Name and Address: The registered name of the company or organisation.
• KRA PINs: Both the employee's and employer's Kenya Revenue Authority PINs are mandatory.
• Pay Period: The specific start and end dates the payment covers (e.g., 1 July 2026 to 31 July 2026).

2. Gross Pay and Earnings Breakdown

Gross pay represents an employee's total earnings before any deductions. It is not enough to show a single figure. You must itemise each component to show how the total was reached.

• Basic Salary: The contractual fixed salary for the period.
• Allowances: All allowances must be listed separately. This typically includes house allowance, transport or commuter allowance, and meal allowance.
• Overtime Pay: If an employee worked overtime, the payslip must show the hours worked and the rate applied. Under the law, overtime is paid at 1.5 times the normal hourly rate for workdays and 2.0 times for rest days or public holidays.
• Commissions and Bonuses: Any performance-based or variable payments earned.
• Other Earnings: This can include payments for accrued leave, back pay adjustments, or other one-off payments.

3. Mandatory Statutory Deductions (As of 2026)

These are deductions required by law. The employer is legally responsible for calculating them accurately, deducting them from the employee's pay, and remitting both the employee and employer portions to the correct government agencies. The deadline for remittance is the 9th of the month following the payroll. Late payments attract steep penalties.

PAYE (Pay As You Earn)

PAYE is the income tax withheld from an employee’s earnings and paid to the KRA. It is calculated on taxable pay (gross salary less NSSF pension contributions). For a comprehensive breakdown, see our employer's guide to PAYE in Kenya. The 2026 tax bands are:

• First KES 24,000 per month: 10%
• Next KES 8,333 per month: 25%
• Amounts over KES 32,333 per month: 30%

All employees are entitled to a Personal Relief of KES 2,400 per month, which directly reduces the final tax owed.

NSSF (National Social Security Fund)

NSSF is the national pension fund. Contributions under the NSSF Act No. 45 of 2013 are tiered. The rate is 6% from the employee and a matching 6% from the employer. The maximum monthly contribution is KES 2,160, divided as follows:

• Tier I: On earnings up to KES 7,000 (the Lower Earnings Limit). This is a mandatory KES 420 from the employee and KES 420 from the employer.
• Tier II: On earnings between KES 7,001 and KES 36,000 (the Upper Earnings Limit). The maximum Tier II contribution is KES 660 from the employee and KES 660 from the employer.

For more detail, read our complete guide to the new NSSF rates in Kenya for 2026.

SHIF (Social Health Insurance Fund)

The Social Health Insurance Fund (SHIF) replaced the previous NHIF scheme. It is a mandatory contribution for universal health coverage. The rate is 2.75% of the employee's gross monthly salary, deducted entirely from the employee. There is no employer contribution. The deduction has a minimum of KES 300 and a maximum of KES 5,000 per month. Learn more about the new system in our SHIF Kenya 2026 guide.

Affordable Housing Levy (AHL)

The AHL funds the government’s affordable housing programme. The employer deducts 1.5% from the employee’s gross monthly salary and contributes a matching 1.5%. Unlike SHIF and NSSF, this levy has no upper limit or cap.

4. Other Permissible Deductions

An employer may only make non-statutory deductions with the employee’s prior written consent, under a court order, or as part of a collective bargaining agreement. These must be specified on the payslip.

• Loan Repayments: For a staff loan provided by the employer.
• Sacco or Co-operative Contributions: As instructed by the employee.
• Pension Contributions: For voluntary or occupational pension schemes.
• Trade Union Dues: Where applicable.

Crucially, employers must abide by Section 19 of the Employment Act. This section stipulates that the total of all deductions in any pay period cannot exceed two-thirds (2/3) of the employee's total wages. Exceeding this limit is a breach of the law.

5. Net Pay and Payment Method

The payslip must conclude with the final calculation, showing the employee exactly what they receive.

• Total Deductions: The sum of all statutory and other deductions.
• Net Pay: This is the final "take-home" amount, calculated as Gross Pay less Total Deductions.
• Payment Method: It is best practice to state how the pay was disbursed (e.g., "Bank transfer to Equity Bank, Acc. No. XXXX").

Achieving Full Payroll and Payslip Compliance

Generating a compliant payslip requires constant vigilance over Kenya's evolving tax and labour legislation. For many organisations, particularly foreign-registered entities and NGOs, managing this in-house introduces significant risk. An error in calculation, a missed remittance deadline, or an improperly formatted payslip can lead to costly penalties and erode employee trust.

Outsourcing this function to a specialist firm guarantees accuracy and compliance. Our payroll processing services in Kenya are designed to manage every aspect of your payroll. We handle precise calculations of all statutory deductions, ensure timely remittances to the KRA, NSSF, and SHA, and generate clear, compliant payslips for every employee. This allows you to focus on your primary objectives with the confidence that your payroll is managed correctly and legally.