Monthly payroll cost for a team, with all employer statutory on-costs.
Total monthly payroll cost
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Gross salaries
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Employer on-costs
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On-cost as % of gross
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Annual payroll cost
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What the real cost of a hire is in Kenya
When you offer someone KES 90,000 a month, that figure is not what leaves the company bank account. On top of every salary, a Kenyan employer carries statutory on-costs that the staff member never sees on their payslip. This tool exists to turn a headcount plan into a number you can take to a board meeting or a cash-flow model, because the gap between gross salaries and total payroll is where small businesses quietly overspend.
The on-costs this calculator adds are the three that fall on the employer rather than the employee. First, the employer match into the National Social Security Fund (NSSF). Kenya runs NSSF on two tiers, with the employer matching the employee shilling for shilling at the rate this calculator applies, which is six percent of pensionable pay split between a lower and an upper earnings limit. Critically, that match is capped: the model uses a ceiling of KES 6,480 per employee per month, so a KES 120,000 earner and a KES 300,000 earner cost the employer the same NSSF. Second, the employer half of the Affordable Housing Levy, modelled here at 1.5 percent of gross pay with no cap, which means it is the one on-cost that keeps rising with salary. Third, the National Industrial Training Levy (NITA), a flat KES 50 per employee each month as applied here.
Why richer payrolls have a smaller on-cost percentage
Because NSSF caps and NITA is flat, the employer burden as a share of pay actually shrinks as average salaries climb. A team of minimum-wage staff carries a higher percentage on-cost than a team of senior engineers, since only the housing levy scales with the bigger salaries. That is a useful piece of judgement when you model two very different teams against the same budget.
A ten-person team at KES 90,000 average
Take the default case: ten people on an average gross of KES 90,000. Per employee, NSSF is 6 percent of pay at KES 5,400, the 1.5 percent levy on KES 90,000 is KES 1,350, and NITA adds KES 50, for a per-head on-cost of KES 6,800. The steps below use the rates this calculator applies.
| Line | Per employee | Whole team (x10) |
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The on-cost of KES 68,000 is 7.56 percent above gross, and the annual payroll lands at KES 11.62 million. The chart shows how the total splits between the salaries you intend to pay and the statutory layer sitting on top.
A common budgeting mistake
The tool deliberately does not add SHIF health contributions or PAYE on top, because both are employee deductions that already live inside the gross figure you typed. Adding them again is the most frequent error in homemade payroll models, and it inflates the budget by a wide margin. It also assumes everyone earns the same average, so a team with a few very high salaries will be slightly overstated on NSSF, since those people are already at the cap. For a precise figure per person, model each salary band separately and sum the results.
Practical tip: when you pitch a fixed salary to a candidate, quote the cost-to-company internally as gross plus roughly six to seven percent for a typical Kenyan salary, then sanity-check against this tool. These rates sit in flux across recent Finance Acts, so confirm the current NSSF ceiling and levy figures with the Kenya Revenue Authority before you lock a budget.
Do I pay the housing levy on bonuses and allowances?
The levy as modelled applies to gross pay, which in practice includes most cash allowances and bonuses paid through payroll. If you run a large one-off bonus month, your employer levy for that month rises with it, since there is no cap. Confirm the precise definition of qualifying gross with the KRA, because the treatment of specific allowances has shifted.
Does an intern or part-timer trigger the same on-costs?
Anyone on your payroll with pensionable pay generally attracts NSSF and the housing levy in the same way, and NITA is per employee. A short-term consultant invoiced as a supplier sits outside payroll and is handled through withholding tax instead, which this tool does not cover.
How do I turn this into a true cost-to-company figure?
Add anything you fund beyond statutory minimums: private medical cover, a pension top-up above NSSF, training budgets, or equipment. Those are commercial choices, not law, so they are not in the calculator. Layer them on the KES 968,000 baseline to reach your real annual commitment.