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6 Items of a Kenyan Payroll Revealed


6 Items of a Kenyan Payroll Revealed

May 20, 2021
8 min read

Having a seamless Kenyan Payroll system is one way to add value to your organization's human resource processes. Because as research shows, when it comes to value, it has a positive impact on employee performance.

In order to capitalize on this, it is important to create value, and an efficient payroll system is one way to go. 

Now, let’s look into it:

For most companies, payrolls are a headache. The whole process of manually calculating salaries, taxes, NHIF, and NSSF payments including allowances and deductions is tedious.

A challenge the organization may face is employees experiencing salary delays which in turn increases employee dissatisfaction.

However, an effective Kenyan payroll system easily solves this problem. 

Now, with that said here are 6 items every Kenyan payroll system must have:

1. Calculating Statutory Deductions (NHIF, NSSF, and PAYE)

As a requirement, employers have to make mandatory statutory deductions on employee salaries.

By calculating these manually, a lot of the work will fall on HR departments. In addition to this, the manual process is also prone to human error.

But, a Kenyan payroll system guarantees automatic calculation of each employee's deductions meeting the standards outlined by KRA, NHIF, and NSSF.  

2. Paying statutories

Salary calculation forms a major part of payroll processes. Included in this process, is the paying of NHIF, NSSF and PAYE  Failure to make these payments could result in penalties for an organisation.

Manual payroll systems e.g. Excel spreadsheets, means that the payment of statutory has to be done physically. It is tedious and time-consuming.

Automating payroll, as well as payments, is key in enhancing communication between HR and Finance.  Even better, automating statutory payments such as PAYE, NHIF and NSSF will save your teams, even more, time and money.

3. Statutory Reports

Running a Kenyan payroll means a number of things. The most important include:

  • Considering allowances and deductions - including statutory deductions
  • Considering the number of days an employee has worked

Under the Kenyan Employment Act, these payments are mandatory. By providing a platform where employers can easily generate these reports: the system increases efficiency and allows quick access anytime.  

A system that can generate key reports such as NSSF, NHIF, PAYE, HELB, and NITA  is an added advantage for any organization. Especially when these reports a built using the same template the same bodies use. Meaning, one does not need to make any changes on them.

4. Multi-company management

When looking for a Kenyan payroll system, flexibility is important. With organizations having diverse needs, the ability to adapt to each one of these needs is crucial.

One important need an organization might have is having a way to manage multiple branches and subsidiaries since payroll is probably prepared on different dates with different HRM's. In addition, each of these branches has its own requirements.

Ranging from a varying number of employees, departments, and operational procedures - the payroll system should allow organizations to independently manage each of these branches tailored to each specific need.

Including a unique feature that allows multi-level access. Each branch is able to independently manage its records and run processes with ease.

This is an ingenious way to increases efficiency.   

5. Paying directly to bank and M-Pesa

A challenge most businesses face is making payments. These payments could range from day-to-day expenses like petty cash to the payment of salaries.  

An organization should not have to deal with manual systems of making such payments.  For example, writing cheques, directly using the bank and in some cases making withdrawals to pay casual labourers by cash.

It not only makes the process long, but it also increases risk by having large sums amounts of cash at hand.  

The solution?

An integrated payroll solution interlinked with all banks in Kenya and allows payments via M-Pesa at very competitive rates.

Also, by integrating unique features such as time attendance the payroll system is streamlined and offers convenience when calculating the number of days an employee has worked and making salary payments.

6. Employee self- service portal

The world of human resource is changing and managers are looking at empowering their employees by increasing engagement. As such, supporting statistics show that organizations with engaged employees are 21% more likely to be profitable.  

A payroll system that can be able to, for instance, offer a self-service portal employees are able to:

  1. Request for leaves
  2. Request for salary Advances
  3. Request for loans
  4. Download payslips and p9 forms
  5. Digitize key documents e.g CV's
  6. Request for petty cash and upload receipts e.g transport

This makes it easier for a business to plan work schedules as well as their finances.

Here’s how you can get yourself started with automating your payroll processes.

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