The global talent pool is limitless. So, if you’re on the search for new team members, consider extending beyond your physical borders. Gain access to a bigger, more affordable talent pool of skilled professionals worldwide with fresh perspectives and valuable insights.
Kenya, for example, has a talented and diverse workforce with relatively low labor costs. You can find skilled employees in various industries, including technology, finance, agriculture, and healthcare.
If you’re interested in hiring employees from Kenya, it’s key to understand how much it costs. This guide will break down everything you need to know.
Costs to Consider
There are a number of costs to keep in mind when hiring employees from Kenya. Some are legally mandated, while others are optional but frequently offered. We’ll also go over some fringe benefits that can help attract and retain top talent.
Mandatory Costs
- Salary
- Taxes and benefits
- Paid time off
- Overtime pay
- Severance pay
Optional and Frequently Offered Benefits
- Added Benefits
- Bonuses, discounts, and rewards
- Extended health plan
Optional Perks
- Coworking space
- Health and wellness benefits
Mandatory Costs of Hiring in Kenya
To start, you need to take the following costs into account - there’s no way around it. So make sure to budget for them to ensure you comply with Kenya’s local laws and regulations.
Salary
The minimum wage in Kenya is set at 15120 Kenyan shillings per month or $111.17 USD. The average salary in Kenya can vary significantly, depending on factors such as the industry, job position, qualifications, and level of experience. However, even top earners make significantly less than their counterparts in North America.
Taxes and Contributions
In Kenya, employers are responsible for various taxes and contributions related to employing workers. Here's a brief overview:
- National Social Security Fund (NSSF): 6.00% - a maximum of KES 200 per month (USD 1.50)
- National Industrial Training Levy (NITA): 50 KES per employee (USD 0.36)
Paid Leave
Employees in Kenya are entitled to the following types of paid leave from work.
- Vacation: After one year of full-time employment, employees in Kenya are entitled to 21 annual leave days with full pay.
- Sick leave: An employee is entitled to a minimum of 7 full-pay days and 7 half-pay days of sick leave per year.
- Maternity Leave: Female employees are entitled to a minimum of three months (91 calendar days) of maternity leave. This includes a mandatory six weeks of leave before the expected date of delivery (antenatal leave) and a recommended minimum of eight weeks. During maternity leave, employees are entitled to receive a percentage of their salary through the government's Maternity Leave Scheme. The payment is typically based on the employee's average monthly earnings.
- Public holidays: Kenya has 12 public holidays, and employees are typically entitled to a day off from work with full pay.
Overtime Pay
Overtime is defined as hours worked outside of normal working hours. Employees can work up to 52 hours per week (12 hours of overtime).
While employers are required to pay junior employees the relevant overtime rate, overtime pay is not required for senior employees because extra work hours are factored into their salaries.
Eligible employees are paid 1.5 times their regular hourly wage for extra hours worked and 2 times their regular hourly wage if they work overtime on a rest day or public holiday.
Severance Pay
Severance payments are only required when an employee is laid off due to redundancy, and they are calculated at a rate of 15 days' wages for every year of service.
Optional Costs
Attracting in-demand talent in today’s job market isn’t easy. The ongoing labor shortage has companies locked in fierce competition around the world, making it increasingly important to level up. Consider implementing the following benefits to attract and retain top talent.
Benefits
Offering a solid benefits package shows job seekers and employees that you value your team. An EOR, like Borderless, offers localized benefits packages that typically include the following:
- Medical Insurance
- Vision Insurance
- Dental Insurance
- Life Insurance
- Retirement Contributions
In addition to health insurance, it’s wise to add extra perks to your benefits package. Consider offering a health and wellness spending account, professional development opportunities, and monthly subscriptions. These are just a few attractive offerings that can help incentivize new hires.
Bonuses
Along with attracting top talent, bonuses come with a range of benefits. They help to improve retention rates, strengthen company morale, and boost productivity. Providing your team with a variety of generous bonuses shows them you value their hard work. There are a number to choose from, like signing, referral, and holiday bonuses.
In Kenya, it is not a legal requirement for employers to provide a 13th or 14th-month bonus to employees. However, some employers choose to offer an additional bonus or "13th-month" pay as a discretionary benefit. This bonus is typically paid out once a year, usually during the holiday season, and is often based on the employee's annual salary.
Perks and Rewards
In addition to bonuses, many employers opt to provide their team with fun perks and gifts as a way to show their appreciation. For example, employers offer their workers rewards based on their interests, such as free sports tickets or live shows. They wine and dine employees and work to show them a good time outside of working hours. Another approach many top companies take is to offer quality employees more paid time off and flexible working arrangements.
Workspace Costs
Working with a global team helps cut down on costs surrounding real estate, utilities, cleaning, office furniture, etc. In short, remote-first work can save you a ton. However, it is a good idea to put aside some money for your distributed team members' workspaces.
Many companies offer their remote employees a budget for their home office or set them up in a coworking space. These membership-based workspaces have been proven to help employees thrive and are available throughout Kenya’s big cities.
Save with Borderless
Sign up with Borderless to learn everything you need to know about hiring in Kenya. Our intuitive platform and dedicated team will make sure you take care of your new teammates and maintain compliance every step of the way. Book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
