Kenya¶
The Kenya Payroll localization package enables payroll management that complies with Kenyan statutory requirements.
Configuration¶
Install the following modules to get all the features of the Kenya Payroll localization:
Name |
Technical name |
Description |
|---|---|---|
Kenya - Payroll |
|
Payroll module includes all employee details, salary rules, allowances, deductions, and leave management, for compliance with Kenyan laws. |
Kenya - Payroll with Accounting |
|
Adds account mappings related to payroll calculations. |
Documents - Kenyan Payroll |
|
Employee Tax Deduction Card forms are automatically integrated to the Documents app. |
Setting up employees¶
Some employee information is crucial in generating payslips and payroll reports. Ensure the following fields in the various sections are configured on each employee record.
Personal tab¶
Some personal employee information is required for payroll processing. Open the Personal tab of the employee record, and ensure the following fields are configured in the Citizenship section:
Identification No: Enter the employee’s government-issued national identification number.
KRA PIN: Enter the employee’s 11-digit alphanumeric PIN. This is used when generating payslip, P9, and P10 reports.
Mortgage interest: Populate the employee’s mortgage interest rate, if applicable.
NSSF Number: Enter the employee’s 9 or 10 digit NSSF number. This field is required for generating payslips and NSSF reports.
SHIF Number: Enter the employee’s 7 or 8 digit SHIF number. This field is required for generating SHIF reports.
In the Personal Information section of the Personal tab, ensure the employee’s Birthday is configured.
Additionally, if the employee has been legally declared a person with a disability, check the Disabled box in the Family section. NightPOS automatically adjusts the PAYE computation in line with Kenyan tax regulations.
Payroll tab¶
Different fields in the Payroll tab must be configured for full-time employees and secondary employers.
Full-time employees¶
In the Payroll tab of the employee form, create or update the employee contract in the Contract Overview section. Next, ensure the following sections and fields are configured:
Pay Category: Must be set to Kenya:Employee to access specific rules and computations as required by Kenyan laws.
Pension Contribution: Enter the employee’s monthly pension contribution.
Important
The monthly tax-deductible cap for pension contributions is 30,000 Ksh per month. To automate this deduction along with the NSSF, ensure the monthly pension amount is entered in this field.
Allowances: Enter the various monthly allowances for Food, Airtime, Pension, Commuter, and Housing if provided. This information is automated to calculate taxes based on the applicable benefit caps.
Note
The Housing allowance can be configured either as a set cost per month (/month) or a percentage (% Percentage).
Insurance: Enter the monthly Voluntary Medical insurance, Life Insurance, and Education insurance costs for the employee.
Secondary employers¶
Click the checkbox next to Secondary Contract if the employee has a primary contract with another employer. When checked, the Insurance section is removed from the Payroll tab, as insurance is managed by the primary employer.
Selecting this checkbox allows NightPOS to automatically apply statutory requirements in compliance with Kenyan regulations for secondary employment.
Run Kenyan payroll¶
Payslips are generated either individually or in a group, referred to as pay runs.
The following sections are particularly important to consider when processing payroll in Kenya.
Salary inputs¶
The Salary Inputs tab of a payslip includes additional benefits and deductions that may vary per employee, such as HELB loan repayments, salary advances, fringe benefits, and other salary attachments.
Entries that occur consistently can be automated using salary attachments, and are automatically added as salary inputs. Other inputs that are one-off items, such as a salary advance, can be manually added as a salary input.
To manually add a salary input, click the Add Inputs button.
Salary computation tab¶
The Salary Computation tab contains the computations used to generate the final figures displayed on the payslip, as well as the amounts posted to the accounting journal entries.
Note
No tax deductions are applied in the computation of income tax since they are already factored in by the employee’s primary employer.
Reports¶
The reports in the following sections are available, including Kenya specific reports. All reports can be downloaded.
Important
A valid National ID number, NSSF number, and NHIF/SHIF number must be configured in the Personal tab of the employee’s record to generate NSSF and SHIF/NHIF reports.
Master payroll¶
To generate a master payroll report by month, navigate to . Next, click into the search bar and click the Date drop-down menu, revealing various months and quarters. Click the desired month, and the report displays all payslips for that month.
P9 report¶
Employers in Kenya are required to provide each employee with a document summarizing their total earnings, various deductions, and tax contributions made that year, so that taxes can be properly calculated and paid.
The P9 report is what the company creates, which contains all the tax information.
Each individual employee receives a tax deduction card, which contains all their various earnings.
The various tax deduction cards together make up the P9 report.
Note
All payslips for the desired year must have a status of Done to generate the P9 report.
To generate the P9 report, navigate to .
Click the New button, and a Tax Deduction card form loads, and an
Eligible Employees smart button appears at the top, displaying 0 (zero).
Using the drop-down menu, select the Year in the corresponding field. Update the Description, if needed, then click Populate. The Eligible Employees smart button updates with the number of employees included in the report for that year.
To view the employees and generate the individual cards, click the Eligible Employees smart button, and a list of all employees appears. Select all the employees by clicking the checkbox next to Employee at the top, then click the Generate Reports (#) button.
Once the reports are processed, each corresponding report appears in the PDF File column of the employee list. All successfully generated reports have a State of Generated PDF.
Next, select where the document is stored using the drop-down menu in the Document column. Once a destination is selected, the State of the PDF changes to Posted PDF.
To download and view any of the PDF files, click on the file link, and select where to save the file.
SHIF (NHIF) report¶
A SHIF report is required by Kenya’s SHA and details each employee’s contributions and benefits.
Note
In 2025, Kenya switched from the NHIF to the SHIF.
To create the SHIF report, navigate to , and a SHIF (NHIF) Report pop-up window loads. Only two fields must be configured: the Month and Year fields. The current month and year populate the corresponding dates by default, but can be modified using the drop-down menu.
All relevant payslips for the selected time period appear in the window in a list view. Each entry displays the Payslip Name, Employee, Identification No, SHIF Number, and SHIF Amount.
Any individual payslip can be removed from the report by clicking the (Delete) icon at the end of the row.
Click the Export XLSX button, and the report is generated.
Note
All payslips for the selected month must have a status of Done to generate the SHIF report.
Tip
SHIF excel reports can be uploaded directly to SHIF (NHIF) portals.
Important
SHIF reports are not applicable to employees under a secondary employer contract.
NSSF report¶
An NSSF report logs all the necessary information regarding employee payments and contributions to the NSSF.
Important
Tier 11 NSSF and voluntary pension can be remitted to either NSSF or a third party insurance, and must be defined on the employee’s contract.
On the employee contract, in the Pension Remit To field, select either NSSF or Insurance.
To access this report, navigate to , and an NSSF Report pop-up window loads.
The Month and Year fields are automatically populated with the current month and year. If needed, these dates can be modified.
NightPOS automatically populates the various fields for employees with generated entries for the selected time period.
To generate NSSF reports for an employee, the employee must have the following fields configured in the Citizenship section of the Personal tab of their employee record:
Identification No
NSSF Number
NHIF Number or SHIF Number
To generate the report, click the Export XLSX button, select the location to save the file, then click Save. The report is exported, and stored in the selected location.
Note
All payslips for the selected month must have a status of Done to generate the NSSF report.
Important
NSSF reports are not applicable to employees under a secondary employer contract.
Tip
NSSF excel reports can be uploaded directly to NSSF portals.