Cost of an employee in Kenya (2026)
What an employee really costs an employer in Kenya: gross salary plus mandatory employer social contributions.
On a gross salary of KES 200,000 per month in Kenya, an employer pays about KES 215,000 in total once mandatory employer social contributions of 7.5% on top of the gross are included.
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How salary is taxed in Kenya
Income tax in Kenya is progressive: marginal rates rise from 10% to 35% as income grows.
Employees also pay social contributions of around 10.25% of gross salary.
A tax-free allowance of about KES 288,000 per year is deducted before income tax.
The standard VAT rate is 16%.
| Annual taxable income | Tax rate |
|---|---|
| Up to KES 288,000 | 10% |
| Up to KES 388,000 | 25% |
| Up to KES 6,000,000 | 30% |
| Up to KES 9,600,000 | 32.5% |
| KES 9,600,000 and above | 35% |
Frequently asked questions
What does it cost to employ someone in Kenya?
On top of the gross salary, an employer in Kenya pays mandatory social contributions. The total cost of employment is the gross salary plus those employer contributions.
Are employer contributions the same as salary deductions?
No. Employer contributions are paid by the company in addition to the gross salary, while employee deductions (income tax and social contributions) are taken out of the gross to leave the net take-home pay.
Employer-contribution rates are approximate and may be capped or vary by region and sector.
Approximate 2026 estimate. Simplified model, verify before relying on it. Not tax advice.
Rates updated June 2026