How to Use an Employer of Record to Expand Your Business in Kenya

Expanding your business into Kenya presents immense opportunities due to its growing economy, skilled workforce, and strategic location in East Africa. However, engaging in hiring employees in Kenya comes with challenges related to labor laws, payroll management, and compliance requirements.

An Employer of Record (EOR) provides a hassle-free way to hire employees in Kenya legally, handling everything from payroll processing and tax compliance to employee benefits and HR support. It's a streamlined way to approach hiring for your expansion.

This guide outlines how businesses can use an EOR to enter the Kenyan market efficiently and scale their workforce with ease, optimizing their hiring strategy for success.

Why Expand Your Business to Kenya?

Kenya is one of Africa’s fastest-growing economies, making it an attractive destination for businesses looking to hire local talent and establish a market presence.

Key Advantages of Expanding to Kenya - Setting the Stage for Effective Hiring:

Skilled, English-Speaking Workforce – Kenya has a large talent pool, especially in finance, tech, marketing, and customer service, making it easier to find qualified candidates during hiring.
Cost-Effective Hiring – Hiring in Kenya is more affordable compared to Western markets, improving your budget and staffing plans.
Booming Tech & Startup Ecosystem – Nairobi is known as “Silicon Savannah”, with a strong IT, fintech, and BPO industry, providing you with skilled candidates for your expansion hiring.
Strategic Location – Kenya serves as a gateway to East Africa, offering access to regional markets and making your workforce expansion strategic and advantageous.
Business-Friendly Policies – The government provides investment incentives and tax benefits for foreign businesses, supporting your expansion and ongoing hiring efforts.

With these advantages, expanding into Kenya is a strategic move, and an EOR can simplify the process and make your hiring more efficient.

Step 1: Understanding the Role of an Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that legally hires employees on behalf of a company, managing payroll, taxes, benefits, and HR compliance. They are your partner in navigating local employment laws and regulations.

Why Use an EOR for Business Expansion in Kenya? Streamlining the Way You Hire:

No Need for a Local Entity – The EOR legally employs workers, eliminating the need to set up a subsidiary, which accelerates the hiring process.
Faster Market Entry – Start hiring in Kenya within days, instead of waiting months for entity registration, enabling you to take advantage of immediate opportunities.
Full Compliance with Kenyan Labor Laws – Avoid legal risks and penalties by following local regulations, ensuring ethical and compliant hiring practices.
Simplified Payroll & Tax Management – The EOR handles salary payments, tax deductions, and employee benefits, reducing your administrative burden during hiring and beyond.
HR & Legal Support – The EOR manages contracts, terminations, and dispute resolution, providing a legal safety net as you hire and manage your team.

With Cadana’s EOR services, businesses can hire employees in Kenya quickly, legally, and efficiently, optimizing their approach to expansion and team building.

Step 2: Identify the Right Roles for Hiring in Kenya

Kenya has a highly skilled workforce across multiple industries, making it an ideal market for global hiring. Understanding the landscape is key to successful hiring.

Popular Roles for Remote & On-Site Hiring in Kenya:

Software Developers & IT Professionals – Expertise in software engineering, cybersecurity, and cloud computing, making them valuable for tech-driven expansion plans and your hiring decisions.
Customer Support & Call Center Agents – Kenya has a strong BPO (Business Process Outsourcing) sector, providing skilled professionals for customer engagement roles and your hiring needs.
Finance & Accounting Specialists – Skilled professionals in bookkeeping, tax management, and auditing, ensuring financial integrity as you scale your operations and inform your hiring requirements.
Sales & Marketing Executives – Experience in digital marketing, social media, and business development, essential for building your market presence and guiding your hiring strategies.
Project Managers & HR Specialists – Strong background in operations and people management, ensuring your projects run smoothly and your hiring efforts are strategic and effective.

With an EOR like Cadana, businesses can hire professionals in these fields without administrative complexity, making it easier to find the right fit for your team.

Step 3: Onboard Employees Legally in Kenya – Ensuring Ethical Hiring

Kenyan employment laws require written contracts for employees working longer than three months. An EOR ensures proper onboarding, ensuring contracts, tax filings, and payroll setup are compliant. That's how you start your hiring the right way.

EOR Onboarding Process in Kenya – A Foundation for Compliant Hiring:

Legally Compliant Employment Contracts – Drafted according to Kenyan labor laws, setting the stage for fair and compliant hiring practices.
Right-to-Work Documentation – Verifying national ID, work permits, and tax registration (PIN certificate), ensuring all hires are legally authorized to work.
Payroll Setup – Employees are registered for statutory tax and benefits contributions, streamlining payroll processes and ensuring accurate financial management as you hire.
HR Compliance – Ensures alignment with Kenya’s Employment Act (2007) and wage regulations, protecting both the company and its employees from legal risks during hiring.

Using Cadana’s EOR services, businesses can streamline onboarding and start operations in Kenya immediately, focusing on strategic objectives while ensuring ethical hiring.

Step 4: Manage Payroll & Compliance in Kenya - Supporting Responsible Hiring

Kenya has strict payroll regulations, requiring employers to deduct taxes, social security, and pension contributions. For companies, this means staying informed to support responsible hiring.

Key Payroll & Tax Responsibilities for Employers in Kenya, Influencing the Way You Hire:

Pay As You Earn (PAYE) Tax: Employers must deduct progressive tax rates from 10% to 35%, based on salary levels. Stay current with KRA guidelines.
National Social Security Fund (NSSF): Employers and employees each contribute 6% of gross pay, a standard benefit to consider as you hire. Always confirm current contribution rates.
National Hospital Insurance Fund (NHIF): Monthly contributions range from KES 150 to KES 1,700, based on salary. Check official NHIF announcements for the latest rates.
National Industrial Training Authority (NITA) Levy: Employers contribute KES 50 per employee for workforce training, investing in your team's skills right from hiring.

How an EOR Helps with Payroll Compliance and Supports Responsible Hiring:

Processes salaries & tax deductions accurately, ensuring timely and precise payments for every new hire.
Manages social security, pension, and health contributions, ensuring comprehensive benefits for employees and compliance with Kenyan law.
Ensures adherence to the Kenya Revenue Authority (KRA) tax laws, minimizing compliance risks and promoting transparent hiring.

With Cadana’s EOR services, businesses can handle payroll effortlessly while staying 100% compliant, ensuring fair and responsible practices in all their hiring endeavors.

Step 5: Provide Competitive Employee Benefits – Improving Your Hiring Potential

Offering attractive benefits helps companies retain top talent in Kenya. An EOR ensures employees receive both statutory and additional benefits, boosting satisfaction and productivity, and enhancing your overall hiring potential.

Mandatory Employee Benefits in Kenya That Support Effective Hiring:

Paid Annual Leave: Employees are entitled to 21 paid leave days per year, a basic benefit that impacts your attractiveness during hiring.
Maternity Leave: Three months of paid maternity leave is mandatory, making your company appealing to a diverse range of candidates as you hire.
Paternity Leave: Male employees receive two weeks of paid paternity leave, demonstrating your commitment to family values during the hiring process.
Sick Leave: Employees are entitled to 14 days of paid sick leave per year, signaling that you value employee well-being and improving your hiring prospects.

Additional Benefits Businesses Can Offer to Further Improve Hiring:

Private Health Insurance – Expands coverage beyond NHIF, enhancing the overall value proposition when you hire.
Flexible Work Arrangements – Encourages work-life balance, a benefit that can significantly boost your hiring success.
Bonuses & Incentives – Motivates high performance and attracts ambitious candidates, essential for strategic hiring efforts.
Training & Development Programs – Enhances employee growth, improving your employer brand and making your company a top choice during recruitment.

With Cadana’s EOR solution, companies can offer competitive benefits while staying compliant, ensuring higher employee satisfaction and an improved experience for those they hire.

Step 6: Scale & Grow Your Business in Kenya with an EOR – Streamlining Hiring and Expansion

Expanding in Kenya doesn’t end with hiring; scaling a business requires workforce flexibility. An EOR helps companies adjust staffing levels quickly while managing HR, payroll, and compliance, optimizing the hiring process for sustainable growth.

How an EOR Supports Business Growth and Makes Hiring Easier:

Faster Team Expansion – Hire employees in days, not months, improving your speed and efficiency during team growth.
Effortless HR & Payroll Management – Reduce administrative burden, allowing you to focus on core business activities while simplifying the act of hiring.
Legal & Compliance Support – Stay compliant with Kenyan labor laws, minimizing legal risks as you expand your workforce through strategic hiring.
Cost Savings – No need for entity setup, local HR, or payroll teams, maximizing resources for effective hiring and expansion initiatives.

With Cadana’s EOR services, businesses can scale operations in Kenya seamlessly while focusing on growth, ensuring their approach to hiring is both strategic and sustainable.

Why Use an EOR for Business Expansion in Kenya?

📌 No entity setup required – Hire employees legally without establishing a local subsidiary, streamlining your entry into the Kenyan market.

📌 Payroll & tax compliance handled for you – Avoid legal risks and penalties, ensuring your expansion and hiring efforts are compliant.

📌 Access to Kenya’s skilled workforce – Hire top talent in tech, finance, and BPO, enhancing your team's capabilities.

📌 Faster market entry – Start hiring in Kenya within days, quickly building your presence and operations.

📌 Scalable & cost-effective – Reduce expansion costs while staying compliant, making your hiring more budget-friendly.

Expand Your Business in Kenya with Cadana’s EOR Services

Kenya offers incredible opportunities for international businesses, but navigating employment laws and payroll can be complex. Managing recruitment and expansion can be even more challenging without local expertise.

Cadana’s EOR services provide a turnkey solution for businesses looking to hire, manage, and scale their teams in Kenya, without entity registration or compliance risks.

Ready to expand into Kenya? Partner with Cadana today and start hiring with confidence!