Payroll is more than paying salaries — it’s about legal compliance, correct deductions and accurate records. For small and medium enterprises in Kenya, mistakes can lead to penalties and damaged trust. Use this checklist to keep payroll tidy and compliant.
1. Register correctly
Ensure your company is registered with KRA (PIN), and that employees are registered for NSSF and NHIF where required.
2. PAYE (Pay As You Earn)
Calculate and deduct PAYE correctly each pay period using the current tax bands. File and remit PAYE monthly to KRA through iTax.
3. NSSF contributions
Apply the current NSSF contribution rules and remit on time. Keep records of employer and employee contributions.
4. NHIF deductions
Deduct NHIF monthly according to the current bands and remit promptly. Make sure employees understand their benefit bracket.
5. Statutory benefits & other deductions
Account for other deductions (pension schemes, group life, union dues) and ensure employees have authorised these in writing.
6. Payslips & records
Issue payslips each pay period and maintain payroll registers, tax certificates and remittance receipts for at least the statutory period.
7. Year-end obligations
Prepare and distribute PAYE certificates and reconcile payroll with accounts for year-end reporting.
8. Data security & confidentiality
Store payroll data securely — limit access and ensure backups. This protects employees and reduces compliance risk.
9. Keep up with changes
Rules change: subscribe to KRA, NSSF and NHIF updates, or partner with an HR/payroll provider who tracks changes.