You've decided to hire. Before the first payslip, there are registrations, a contract, and deductions to put in place — here's what they are, and the order that keeps it legal and painless.
Before the advert, run the numbers. A KES 50,000 gross salary is not KES 50,000 to you — the employee's SHIF, NSSF, and AHL come out of it, your PAYE obligations sit on top of it, and you owe an employer match on NSSF and AHL as well. Our 2026 payroll guide has the full stack and a worked example. Decide the gross salary, know what it costs you, and only then start talking to candidates.
The target is to have these done before the employee's first day, and definitely before the first payslip. Falling behind here means late remittances — and the penalties that come with them.
Under the Employment Act, 2007, a written contract isn't a nice-to-have — it's the law, and your first line of defence if a dispute ever goes to a tribunal. A proper Kenyan employment contract covers at least:
If you're unsure, have a lawyer draft a template; it's a small cost against the alternative.
The payslip is where it all lands. On a KES 50,000 gross salary, the employee's deductions look like this:
| Deduction | Amount (KES) |
|---|---|
| SHIF (2.75%) | 1,375 |
| NSSF (Tier I + II, 6%) | 3,000 |
| AHL (1.5%) | 750 |
| PAYE (after personal relief) | ≈ 5,846 |
| Net pay | ≈ 39,029 |
On top of that, you owe the employer share: 6% NSSF and 1.5% AHL. Budget the real cost of the hire, not just the gross.
Miss a deadline and it gets expensive fast — late PAYE filing is the higher of KSh 10,000 or 25% of the tax due, plus late-payment interest.
The status of NSSF contribution rates has been under legal clarification during 2026. Confirm the current position with your accountant before each payroll run.
Hiring brings your business into the statutory records world: payslips, remittances, and returns that all need to reconcile. Start the way you mean to continue — every payslip filed, every remittance tracked, every return kept. It's the difference between hiring being a delight and hiring being a mountain of January catch-up.
Tieghtsuite computes PAYE, SHIF, NSSF, and AHL on every payslip and keeps the records in one place — so your first hire is also your easiest payroll. Try it free.
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