Employer Cost Calculator — Kenya (2026)
Estimate the total cost of employing someone in Kenya, including employer statutory contributions and any additional costs.
2026 Rates
Last verified: Today
Assumptions & Notes
Employer on‑costs considered in this calculator (2026).
Other employer costs
Method & Rounding
How This Employer Cost Calculator Works
Understanding total employment costs in Kenya including statutory employer contributions
Step 1: Enter Employee Gross Salary
Input the employee's gross monthly or annual salary. This is the amount before any deductions. The calculator uses this as the base to compute all employer-side costs including statutory contributions.
Step 2: Select Employer Contributions
Choose which statutory contributions to include: employer NSSF (6% up to KES 36,000/month), employer Housing Levy (1.5%), and optional pension matching. These are costs the employer pays on top of the employee's salary.
Step 3: Add Optional Costs
Include additional employment costs like benefits (medical, transport), training, equipment, or other fixed costs. Enter as a percentage of salary or fixed amount. This gives you the complete cost-to-company (CTC) picture.
Step 4: View Total Employer Cost
See the complete breakdown: gross salary + employer NSSF + employer Housing Levy + pension + other costs = total employer cost. The calculator shows both the amount and percentage markup over base salary for budget planning.
Understanding Your Employer Cost Results
What each component means and how employment costs work in Kenya
Gross Salary
The employee's salary before any deductions. This is what you advertise in job postings and what the employee sees as their "salary." However, your actual cost as an employer is higher due to statutory contributions.
Employer NSSF (6%)
Employer contribution to NSSF at 6% of gross pensionable pay, capped at KES 2,160/month (Tier I: KES 9,000, Tier II: KES 108,000). This is separate from the employee's 6% contribution. Total NSSF is 12% (6% employer + 6% employee).
Employer Housing Levy (1.5%)
Employer contribution to the Affordable Housing Fund at 1.5% of gross pay. This is in addition to the employee's 1.5% contribution. Total Housing Levy is 3% (1.5% employer + 1.5% employee).
Pension Matching
Optional employer pension contributions if you match employee voluntary pension contributions. Common matching ratios are 5-10% of gross salary. This is a competitive benefit that helps attract and retain talent.
Benefits & Other Costs
Additional employment costs like medical insurance, transport allowances, training, equipment, office space, and administrative overhead. These typically add 10-30% to base salary depending on the role and company benefits.
Total Employer Cost
The complete cost-to-company (CTC) including all statutory and optional costs. Typically 15-40% higher than gross salary. Use this for accurate hiring budgets, financial planning, and understanding true employment expenses.
When to Use This Employer Cost Calculator
Common situations where understanding total employment costs helps with business planning
1 Hiring Budget Planning
When planning to hire new employees, use this calculator to estimate the true cost beyond just salary. Include statutory contributions and benefits to set realistic hiring budgets and avoid budget overruns.
2 Salary Negotiations
During salary negotiations, understand your total cost as an employer. If an employee asks for KES 100,000, your actual cost might be KES 120,000+ with all contributions. Use this to negotiate within your budget constraints.
3 Financial Projections
For business plans and financial projections, calculate accurate payroll costs. Include all employer contributions to avoid underestimating your employment expenses and ensure sustainable growth planning.
4 Contractor vs Employee
Compare the cost of hiring a full-time employee versus a contractor. Employees have statutory contributions (NSSF, Housing Levy) that contractors don't. This calculator helps you make informed hiring decisions.
5 Benefits Package Design
When designing employee benefits packages, see how additional benefits affect total cost. Balance competitive benefits with budget constraints by understanding the full cost impact of each benefit.
6 Payroll Budgeting
Calculate total monthly or annual payroll costs for your entire team. Multiply individual costs by headcount to get department or company-wide employment expenses for accurate budget allocation.
Official Data Sources
Our employer cost calculations use official 2026 Kenya employment regulations and rates
- National Social Security Fund (NSSF) — Employer NSSF contribution is 6% of gross pensionable pay as of 2026. Tier I capped at KES 9,000/month, Tier II capped at KES 108,000/month. Maximum employer contribution is KES 2,160/month.
- Affordable Housing Act, 2024 — Employer Housing Levy is 1.5% of gross pay. This is mandatory for all employers and is in addition to the employee's 1.5% contribution. Total Housing Levy is 3% (1.5% employer + 1.5% employee).
- Employment Act, 2007 — Governs employer obligations in Kenya including minimum wage, statutory deductions, and employment contracts. Employers must comply with all statutory contribution requirements.
- Retirement Benefits Act — Governs pension contributions in Kenya. While voluntary, many employers offer pension matching (5-10% of salary) as a competitive benefit to attract and retain talent.
- Cost-to-Company (CTC) — Total employer cost typically ranges from 115-140% of gross salary depending on benefits. Statutory contributions (NSSF + Housing Levy) add approximately 7.5% minimum. Additional benefits vary by company.
- Last Verified: . We verify our calculations against official NSSF rates and employment regulations. All rates are current for 2026.
Real-World Employer Cost Examples (2026)
See comprehensive employer cost calculations for common hiring scenarios in Kenya with 2026 rates
Entry-Level Employee
Gross Salary: KES 50,000
Employer NSSF (6%): KES 2,160 (capped)
Employer Housing (1.5%): KES 750
Total Employer Cost: KES 52,910
Cost Markup: 5.8%
Total Cost to Company
KES 52,910
Mid-Level Manager
Gross Salary: KES 150,000
Employer NSSF (6%): KES 2,160 (capped)
Employer Housing (1.5%): KES 2,250
Benefits (10%): KES 15,000
Total Employer Cost: KES 169,410
Cost Markup: 12.9%
Total Cost to Company
KES 169,410
Senior Executive
Gross Salary: KES 400,000
Employer NSSF (6%): KES 2,160 (capped)
Employer Housing (1.5%): KES 6,000
Pension Match (5%): KES 20,000
Total Employer Cost: KES 428,160
Cost Markup: 7.0%
Total Cost to Company
KES 428,160
Annual Hire Budget
Annual Gross: KES 1,200,000
Employer NSSF (annual): KES 25,920
Employer Housing (annual): KES 18,000
Other Costs: KES 50,000
Total Annual Cost: KES 1,293,920
Cost Markup: 7.8%
Total Annual Cost
KES 1,293,920
Employer Cost — FAQs
Short answers about total cost of employment in Kenya.
SHIF is treated as an employee deduction. This calculator includes only employer on‑costs: employer NSSF, employer Housing Levy, and optional other costs.
NSSF employer contribution is 6% of pensionable pay up to statutory caps. We will apply the current caps in the calculator logic.
It’s a percentage added to the base payroll amount to represent employer‑funded benefits (e.g., insurance, perks). It’s an optional estimate for budgeting.
No. This calculator uses Gross + taxable allowances as the employer cost base. Non‑taxable allowances are excluded from employer NSSF and employer Housing Levy bases.
Employer Housing Levy is 1.5% of the gross base (Gross salary + taxable allowances). This mirrors the employee rate.
We divide annual inputs by 12, compute monthly values with 2026 caps (e.g., NSSF tiers), then multiply results by 12 for annual totals. Percentages (on‑cost) are unchanged.
Not by default. If applicable, include it under “Other fixed costs” to add a flat KES amount per period.
Employers may define pensionable pay in policy. We approximate it with the gross base for caps and 6% employer contribution using current NSSF limits.
Yes. The calculator applies the current monthly upper limit (KES 36,000 in 2026) across Tier I and Tier II at 6% employer contribution.
Yes. Use “Copy share link” to copy a URL with your inputs (period, gross, allowances, toggles, other costs). Paste it anywhere to reproduce the scenario.
Statutory contributions (NSSF + Housing Levy) add approximately 7.5% minimum. With benefits (medical, transport, pension), total markup typically ranges from 15-40% depending on the role and company benefits package.
No. Independent contractors are not employees, so you don't pay employer NSSF, Housing Levy, or provide benefits. However, you may need to withhold 5% WHT on professional fees. Contractors typically charge higher rates to cover their own costs.
No. Employer NSSF (6%) and Housing Levy (1.5%) are mandatory statutory contributions set by law. All employers must comply regardless of company size or industry. Non-compliance results in penalties and legal issues.
Calculate the total employer cost per employee using this calculator, then multiply by your headcount. Add 10-15% buffer for recruitment costs, training, and turnover. This gives you an accurate annual payroll budget.
Include medical insurance costs under "Benefits %" or "Other fixed costs." Medical insurance typically adds 5-15% to employment costs depending on coverage level. This is a common benefit that helps attract quality employees.
Yes, if interns receive a stipend above minimum wage thresholds. You must pay employer NSSF and Housing Levy on their stipend. However, many companies offer unpaid or low-stipend internships to minimize costs while providing experience.
Very accurate for statutory costs. Startups often have leaner benefits packages (5-10% vs 20-30% for corporates), so adjust the benefits percentage accordingly. Use this to pitch investors with realistic hiring budgets.
Remote employees in Kenya have the same statutory contributions as office-based employees. However, you may save on office space costs while potentially adding home office allowances. Adjust "Other costs" to reflect your remote work policy.
Yes. When a candidate asks for a specific salary, use this calculator to see your true cost including statutory contributions and benefits. This helps you negotiate within your budget while explaining the total value of the compensation package.
Employer contribution rates are typically confirmed in Kenya's annual Finance Act (July/August). NSSF and Housing Levy rates have been stable. We update this calculator immediately when any rate changes are announced. Subscribe for 2027 rate alerts.