Payroll Services
in Kenya.

Payroll services in Kenya cover the full monthly payroll cycle: gross-to-net salary calculations, PAYE computation against KRA's five tax bands, NSSF Tier I and Tier II deductions, SHIF at 2.75% of gross salary, Affordable Housing Levy at 1.5%, payslip distribution, and annual P9 certificates. A managed payroll provider files all returns on KRA iTax and the NSSF/SHA portals by the statutory deadline, the 9th of every month.

Payroll outsourcing in Kenya typically ranges from KES 2,500 to KES 8,000 per employee per month, depending on headcount and complexity. Two Max Group provides a fixed-fee managed payroll model, PAYE, NSSF, SHIF, Housing Levy, payslips, and 5-year records retention all included. Contact us for a cost model based on your exact headcount.

PAYE must be filed on KRA iTax and the tax remitted by the 9th of the following month. For example, January payroll PAYE is due by 9 February. Missing the deadline triggers an automatic 5% penalty on the outstanding tax plus 1% compounding interest per month. Two Max Group files every client's PAYE before the 9th, without exception.

Kenya payroll has five statutory deductions: (1) PAYE, income tax at progressive rates of 10% to 35%, filed on KRA iTax; (2) NSSF, National Social Security Fund contributions at two tiers under the NSSF Act 2013; (3) SHIF, Social Health Insurance Fund at 2.75% of gross salary (replaced NHIF in October 2024); (4) Affordable Housing Levy, 1.5% from employee and 1.5% from employer, effective March 2024; (5) NITA levy for eligible employers. All are remitted monthly by the 9th.

SHIF, the Social Health Insurance Fund, replaced the National Hospital Insurance Fund (NHIF) in October 2024 under the Social Health Insurance Act 2023. Unlike NHIF's flat-rate contributions, SHIF is 2.75% of gross salary (employee contribution only), remitted monthly to the Social Health Authority (SHA). It has been tax-deductible from December 2024. Two Max Group updated all client payrolls at the SHIF transition with zero salary disruption.

Setting up payroll in Kenya requires: (1) PAYE registration with KRA and iTax access; (2) NSSF employer registration and portal access; (3) SHIF registration with the Social Health Authority; (4) Housing Levy registration; (5) Employment contracts compliant with the Employment Act, Cap 226. Two Max Group handles the full setup and has most clients live within 48 hours of engagement.

Under the NSSF Act 2013 and the February 2026 gazette, NSSF is split into two tiers. Tier I: 6% employee + 6% employer on earnings up to KES 9,000 (maximum KES 540 each). Tier II: 6% employee + 6% employer on earnings from KES 9,001 to KES 108,000 (maximum KES 5,940 each). The maximum total NSSF contribution is KES 12,960 per employee per month. Two Max Group applies current rates on every payroll run.

Yes. Two Max Group provides payroll outsourcing for companies with a registered Kenya entity and for those operating under our Employer of Record (EOR) service. Under EOR, we are the legal employer, we run payroll, file PAYE, NSSF, SHIF, and Housing Levy, and issue compliant employment contracts, all without your company needing a Kenya subsidiary.

Yes. Payroll data is regulated by the Data Protection Act (DPA) 2019, administered by the Office of the Data Protection Commissioner (ODPC). Payroll processors must be registered as data processors and may only use employee data for the stated payroll purpose. Two Max Group is ODPC-compliant and uses encrypted portals for all payroll data exchange and payslip distribution.

KRA requires employers to retain payroll records, including P10 PAYE returns, NSSF schedules, SHIF remittances, and payslips, for a minimum of five years. Failure to produce records during a KRA audit can result in assessments and penalties. Two Max Group maintains a five-year searchable archive for every client, accessible on demand.

A P10 is the monthly PAYE summary return submitted to KRA on iTax. It lists each employee's gross pay, taxable pay, PAYE withheld, and reliefs applied. It is due by the 9th of each month. A P9 is the annual tax certificate issued to each employee at year-end, summarising the full year's PAYE deductions. Two Max Group prepares and files both as part of the standard managed payroll service.

Two Max Group can take over an existing Kenya payroll within 48 hours for most clients. Onboarding involves a payroll data review (existing P10 returns, NSSF accounts, contracts), reconciliation of any compliance gaps, and activation on iTax and NSSF portals. The first Two Max Group-managed payroll run is typically live within one to two business days of data handover.