NileEdge provides expert payroll processing services in Kenya: monthly payroll calculation, PAYE deduction and KRA remittance, NSSF, SHA, Affordable Housing Levy, digital payslips, P9 annual certificates, and full KRA compliance. Fixed monthly fee per employee. No late filing penalties. Ever.
Managing payroll in Kenya is significantly more complex than simply paying salaries. Every pay run triggers a cascade of statutory obligations, PAYE must be calculated correctly for each employee using current KRA tax bands, deducted from gross salary, and remitted to KRA via iTax by the 9th of the following month. NSSF and SHA contributions must be calculated and remitted monthly. The Affordable Housing Levy must be deducted from employees and matched by the employer. A monthly P10 return must be filed with KRA. And every employee must receive a payslip on payment date.
NileEdge's payroll processing service manages the complete monthly payroll cycle for Kenyan companies, from receiving salary inputs to delivering payslips and filing all returns. Our payroll service is designed for companies that have their own registered Kenyan entity and employ staff directly, and who want the payroll administration managed externally without the cost of a dedicated in-house HR/payroll function.
We process payroll for workforces ranging from 2 to 200+ employees, across all sectors, manufacturing, technology, professional services, NGOs, hospitality, construction, and logistics. Our fixed monthly fee per employee means payroll costs are predictable and scale transparently with headcount.
Payroll outsourcing vs Employer of Record, which do you need? If your company has a registered Kenyan entity and employs staff directly, you need payroll processing outsourcing: NileEdge manages the payroll administration on your behalf. If you need to hire in Kenya without a local entity, you need our Employer of Record (EOR) service, where NileEdge acts as the legal employer. Contact us at +254 716 170 349 and we will advise which service applies to your situation.
Every Kenyan payroll involves multiple mandatory deductions from gross salary plus employer contributions on top. NileEdge calculates every item correctly and remits to the correct authority by every deadline.
The total employer cost per employee is always higher than the gross salary agreed with the employee. For every KES 100 of gross salary, the employer must additionally budget approximately KES 7.5–8.5 in employer-side contributions (AHL employer match + NSSF employer contribution + SHA employer contribution). NileEdge provides a full employer cost breakdown for every new employee before any hire is made, so there are never unexpected payroll cost surprises.
NileEdge's payroll service covers every statutory payroll obligation for Kenyan employers, monthly and annually, leaving nothing for the company to manage internally.
We calculate each employee's net pay every month, starting from gross salary, applying all deductions (PAYE, AHL, NSSF, SHA), any loan repayments or advance deductions, and any agreed benefits or allowances, to arrive at the net salary to be paid into each employee's bank account. All calculations use the current KRA tax bands and NSSF/SHA rates applicable for the payroll month.
We calculate PAYE for every employee using the current KRA progressive tax bands, apply all eligible personal reliefs (personal relief KES 2,400/month, insurance relief, mortgage interest relief where applicable), and remit the total PAYE to KRA via iTax by the 9th of the following month. The monthly P10 payroll return is filed simultaneously.
We calculate the 1.5% AHL employee deduction and 1.5% employer contribution for every employee and remit the combined 3% to KRA as part of the monthly PAYE remittance. AHL is remitted together with PAYE by the 9th of the following month via iTax. We ensure AHL is correctly applied to all employees' payroll records from the month of hire.
We calculate both the employee and employer NSSF contributions for each payroll, deduct the employee portion from gross salary, and remit the combined employee and employer contributions to the NSSF portal by the 15th of the following month. We manage NSSF registration for all new employees upon hire and NSSF deregistration when employees leave.
We calculate and remit Social Health Authority (SHA) contributions for all employees monthly. SHA replaced NHIF and operates under revised contribution rates. We ensure all employees are registered with SHA upon hire, contributions are correctly calculated and remitted each month, and any changes to SHA contribution rates following government updates are applied immediately.
Every employee receives a digital payslip on payroll date showing gross salary, all deductions itemised (PAYE, AHL, NSSF, SHA, any other deductions), and net pay. Payslips comply with the Employment Act 2007 requirement that every employee receives a written statement of deductions on payment. We deliver payslips directly to each employee's registered email address or provide a bulk payslip pack to the employer for distribution.
We file the monthly employer payroll return (P10) with KRA via iTax confirming all employee details, gross salaries, PAYE deducted, AHL deducted, and total remittances for the month. The P10 is filed simultaneously with the PAYE remittance, always before the 9th deadline. Filed P10 returns are provided to the client as confirmation of KRA compliance each month.
We prepare and distribute P9 annual tax deduction certificates to every employee by 28 February of the following year, showing the total gross salary paid and total PAYE deducted throughout the year. Employees use their P9 to file their annual personal income tax return (IT1) via iTax. We also file the year-end P9A employer reconciliation with KRA confirming full-year PAYE.
We process new employee additions to payroll, obtaining KRA PIN, NSSF and SHA registration, and adding the employee to the payroll system from the correct start date. When employees leave, we process the final payslip (including accrued leave pay and notice period), manage NSSF and SHA offboarding, issue the P45 equivalent, and advise on any severance or termination payment calculations under the Employment Act 2007.
PAYE is calculated using Kenya's progressive income tax bands. The rates below apply to monthly income, NileEdge applies these precisely, with all eligible reliefs, for every employee every month.
| Monthly Taxable Income (KES) | Tax Rate |
|---|---|
| First KES 24,000 | 10% |
| Next KES 8,333 (24,001 – 32,333) | 25% |
| Next KES 467,667 (32,334 – 500,000) | 30% |
| Next KES 300,000 (500,001 – 800,000) | 32.5% |
| Above KES 800,000 | 35% |
* PAYE bands are set annually in the Finance Act. NileEdge updates rates immediately when new Finance Acts are enacted. Rates shown are effective as at 2026.
Personal reliefs reduce the PAYE payable and must be correctly applied to every employee's payroll calculation:
Are all reliefs being applied to your payroll? Many companies process payroll without applying all eligible reliefs, resulting in employees overpaying PAYE. NileEdge reviews relief eligibility for each employee upon payroll onboarding and ensures all applicable reliefs are correctly applied from the first pay run. Employees receive the full benefit of reliefs they are entitled to, and the employer remits the correct, not over-stated, PAYE amount.
The Employment Act 2007 requires every employer to provide employees with a written statement of earnings and deductions on every payment date. NileEdge delivers compliant digital payslips to all employees on payroll date.
* Example payslip for illustration. Figures calculated on KES 160,000 gross with personal relief applied. Actual PAYE will vary based on applicable reliefs and deductions.
The Affordable Housing Levy (AHL) was introduced in Kenya as a mandatory contribution from both employees and employers toward Kenya's affordable housing programme. It applies to every employee without exception.
The AHL requires 1.5% of each employee's gross monthly salary to be deducted from the employee and matched by an equal 1.5% employer contribution: making the total AHL remittance 3% of gross salary per employee per month. Both the employee deduction and the employer contribution are remitted together with PAYE via KRA iTax by the 9th of the following month.
The AHL applies to the full gross salary, basic salary plus all taxable allowances including housing and transport allowances. There is no lower or upper earnings limit on the AHL, it applies to every employee regardless of income level.
AHL is a real employer cost: Unlike PAYE (which is funded entirely from the employee's salary), the AHL employer contribution is an additional cost to the employer on top of the gross salary. For a company with 50 employees at an average gross salary of KES 80,000, the AHL employer cost alone is KES 60,000 per month. NileEdge includes AHL employer cost in every payroll quote so employers can budget accurately.
Foreign national employees on Kenya work permits require the same payroll compliance as Kenyan employees, but with additional requirements. NileEdge manages the complete payroll process for both Kenyan and foreign national staff.
Foreign national employees often receive benefits, housing, company car, school fees, flights, that are taxable in Kenya. KRA has specific rules on how these benefits are valued and taxed:
NileEdge runs a structured monthly payroll cycle, from salary input collection to PAYE remittance and payslip delivery, completed fully before statutory deadlines each month.
Between the 1st and 5th of each month, we request the payroll inputs for the previous month, or confirm no changes where the payroll is unchanged. Inputs include: any salary changes effective that month, new employee additions (name, KRA PIN, NSSF, SHA, bank details, salary), leavers and their leaving date, any additional payments (bonuses, commissions, back-pay), and any deductions (loan repayments, salary advances, other agreed deductions).
We process all inputs and calculate the full payroll, gross to net for every employee, including PAYE (with all applicable reliefs), AHL (employee and employer), NSSF (employee and employer), SHA, and all other deductions. The calculated payroll is reviewed internally against the previous month to identify any unexplained variances before submission. Any queries are raised with the client and resolved before the payroll is finalised.
We send the client a payroll approval summary, listing every employee, their gross salary, all deductions, net pay, and the total PAYE/NSSF/SHA/AHL remittances due. The client approves the payroll before any payments or filings are made. The net pay summary shows the total bank transfer the client needs to make to fund the salary payments, and the PAYE/NSSF/SHA/AHL remittances NileEdge will make.
On receipt of client approval and funding confirmation, we remit PAYE and AHL (employer + employee) to KRA via iTax and simultaneously file the monthly P10 payroll return. All remittances are completed on or before the 9th of the month. Payment confirmation receipts are provided to the client the same day as remittance. We also remit NSSF contributions (employer + employee) to NSSF and SHA contributions to SHA by their respective deadlines.
Digital payslips are generated for every employee and delivered to each employee's registered email address (or provided in a bulk pack to the employer for distribution) on or before the agreed payroll date. A monthly payroll summary report is provided to the employer showing total payroll cost (gross salaries + employer contributions), total net pay, and all statutory remittances made during the month. The payroll summary is available in CSV or PDF format and can be formatted to integrate with the client's accounting system.
Kenya payroll compliance involves multiple monthly deadlines across different government portals. Missing any one of them triggers automatic penalties. NileEdge meets every deadline, without exception.
| Obligation | Authority | Deadline | Late Penalty |
|---|---|---|---|
| PAYE Remittance | KRA iTax | 9th of following month | 25% of tax due + 1% per month interest |
| AHL Remittance | KRA iTax (with PAYE) | 9th of following month | Same as PAYE, 25% + 1% p.m. |
| P10 Monthly Return | KRA iTax | 9th of following month | KES 10,000 per month late |
| NSSF Contributions | NSSF Portal | 15th of following month | Prescribed penalty + interest |
| SHA Contributions | SHA Portal | Monthly deadline | Penalty + surcharge |
| P9 Annual Certificates | Issued to employees | 28 February (following year) | Employment Act breach, labour claim risk |
| P9A Annual Reconciliation | KRA iTax | 28 February (following year) | KES 10,000 per month late |
One missed deadline, real cost: A company with 20 employees at an average gross salary of KES 60,000 has a monthly PAYE liability of approximately KES 120,000. If PAYE is filed one month late, the 25% penalty alone is KES 30,000, plus interest. Over a year of monthly late filings, the penalty accumulation can exceed KES 400,000. NileEdge has never caused a late payroll filing penalty for any client in our payroll bureau. Contact us at +254 716 170 349 to take over your payroll today.
NileEdge is the trusted payroll bureau for Kenyan companies, multinationals, NGOs, and growth-stage businesses that cannot afford payroll errors or compliance failures.
NileEdge has never caused a late PAYE, NSSF, or SHA filing penalty for any payroll client. We operate a pre-deadline payroll completion target of the 7th, two days before the 9th statutory deadline, giving buffer for any banking or portal technical issues. For clients who join NileEdge after accumulating penalties with a previous payroll provider, we file KRA penalty waiver applications as part of onboarding.
NileEdge manages payroll for mixed Kenyan and foreign national workforces, obtaining KRA PINs for foreign employees, advising on benefit-in-kind PAYE treatment, managing work permit validity monitoring, and advising on Kenya-source income determination for employees partially based abroad. Foreign employee payroll is an area where many Kenya payroll bureaus lack expertise; NileEdge processes it for clients across 30+ employee nationalities.
Many Kenya payroll providers apply only the basic personal relief and miss other eligible reliefs, resulting in employees overpaying PAYE every month. NileEdge reviews all available reliefs for each employee upon onboarding, insurance, mortgage interest, disability, post-retirement medical, and applies every applicable relief correctly. Employees receive the benefit they are legally entitled to; the employer remits the correct amount to KRA.
For clients who use NileEdge for both payroll and bookkeeping, payroll data flows directly into the accounting records, no double entry, no reconciliation between separate systems, no payroll/accounts discrepancy. The payroll journal entries are prepared by NileEdge and posted to the accounts immediately after each payroll run. This integration eliminates one of the most common sources of accounting errors in Kenyan companies.
KRA PAYE bands, NSSF rates, SHA contribution rates, and AHL percentages are set by annual Finance Acts and periodic regulations, and can change at any time. NileEdge monitors all KRA and NSSF rate updates and applies new rates from the effective date, without the client needing to monitor these changes. In the month following a rate change, we advise clients proactively of the impact on their payroll cost.
Payroll confidentiality is taken seriously at NileEdge. Salary information is handled by a dedicated payroll team with strict data access controls. Payslips are delivered to individual employee email addresses, no batch payslip email that discloses colleagues' salaries to each other. Payroll data is stored securely and retained for the statutory minimum period required by KRA and the Employment Act.
"We transferred our payroll for 65 employees to NileEdge after our in-house HR officer resigned. The transition took one week. By the following payroll date, NileEdge had processed the full run, remitted PAYE before the 9th, and delivered payslips to every employee. That was 18 months ago. Not a single late payment or KRA penalty since. Our new HR officer focuses on people, not payroll admin."
"Our Kenya team includes employees from Kenya, India, South Korea, and the UK. NileEdge handles PAYE for all of them, including the benefit-in-kind on housing and cars for our expatriate team. They knew exactly how to treat the school fees benefit for our Indian GM. Previous payroll providers had handled this completely incorrectly. We haven't had a KRA query on payroll in two years."
"We're an NGO with 40 national staff across three Kenyan counties. NileEdge processes payroll for all of them, handles the P9 certificates for grant reporting, and feeds payroll data directly into our accounting system. The fact that the payroll and bookkeeping are with one provider has eliminated the monthly reconciliation nightmare we had before. P9s were issued on 15 February, two weeks before the deadline."
Mandatory payroll deductions in Kenya include: PAYE (Pay As You Earn income tax), deducted from gross salary at progressive rates from 10% to 35% and remitted to KRA by the 9th of the following month; NSSF (National Social Security Fund), employee contribution matched by the employer, both remitted by the 15th; SHA (Social Health Authority), employee contribution remitted monthly; and Affordable Housing Levy (AHL), 1.5% of gross salary deducted from the employee and matched by the employer. NileEdge calculates all deductions and remits to KRA, NSSF, and SHA on behalf of every payroll client.
NileEdge manages payroll for Kenya companies, PAYE, NSSF, SHA, AHL, payslips, P9 certificates, and KRA compliance. Fixed monthly fee per employee. Zero late filing penalties. Free assessment.