🦁 Documentation Payroll Kenya 🇰🇪
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Payroll KE

Overview 

This localization is specific to Kenya. It allows management of payroll according to the statutory requirement in Kenya.


Install the following module to access the Kenya Payroll Localization features:

Personal Information Updated

Several employee information is crucial in generating payslips and payroll reports. Ensure you have the following update


Personal information tab

Citizenship Section


  • NSSF Number: Important in generating payslip and NSSF report

  • KRA PIN: Used generating payslip and P9 and P10 reports

  • SHIF Number: Required in generating SHIF report

  • Mortgage interest- For employees paying mortgage



Payroll Tab

Case 1: Full Time employee

On employee form, create a contract on the payroll Tab:


Updating the contract follows the same criteria as explained in Contract documentation, However, the following information is crucial for kenya payroll generation

  • Pay category : -MUST be Kenya:Employee to access specific rules and computation for as required by the Kenyan laws

  • Tax Deduction: Pension contribution deducted from employee gross

    Note: Pension is a tax deductible capped at Ksh.30000 per month. To automate this deduction along with NSSF, ensure your pension amount is updated in this section.

  • Allowances Section: Food, airtime, pension, commuter, and housing allowances are optional and may be provided at your company’s discretion. This information has been automated to calculate taxes based on the applicable benefit caps.

  • Insurance Section: Voluntary Medical insurance, Life insurance  and education policy




Case 2: Secondary Employer

For contracts involving a secondary employer, the Insurance section is excluded from the Payroll tab, as it is managed by the primary employer. Selecting this checkbox allows Odoo to automatically apply statutory requirements in compliance with Kenyan regulations for secondary employment.

Case 3: Persons with Disability

Select this option if the employee has been legally declared a person with a disability. Odoo will then automatically adjust the PAYE computation in line with Kenyan tax regulations.


Update this information under the Personal Information tab in the Family section.




Payroll Generation

The payroll generation guide is available under Payslips. The following sections are particularly important to consider when processing payroll in Kenya.


  1. Salary Input Section

This section includes additional benefits and deductions that may vary per employee, such as HELB loan repayments, salary advances, fringe benefits, and other salary attachments.

These entries can be automated using Salary Attachments (for example, loan instalments spread over a defined period), added through Salary Inputs if they apply consistently, or captured manually for one-off items (such as a salary advance).

To manually add an input, click the Add Input button.




2. Salary Computation


This section contains the computations used to generate the final figures displayed on the payslip, as well as the amounts posted to the accounting journal entries.

i. Primary Employer


ii Secondary employer


NOTE: No tax deductibles will be applicable in the computation of Income tax since they are already factored in by whoever is the employee’s the primary employer


  1. Payslips Generation

    Refer to this resource for payslip generation documentation. Here is a sample.





  6. Payroll journal entries





NOTE: Refer to this resource for accounting journal mapping



Reports

a) Master payroll

To generate a master payroll report, navigate to Reporting →payslip lines, then filter by the month for which you want to generate the report. Use the download feature to generate as an excel file






b)Kenya Specific report

Kenya-specific reports can be accessed by navigating to Reporting → Kenya, then selecting the desired report.



Note:

  • All payslips for the selected month must be in a Done state in order to generate the NSSF and SHIF reports. Similarly, all payslips for the selected year must be in a Done state to generate the P9 form.

  • SHIF (NHIF) and NSSF reports are not applicable to employees under a secondary employer contract.

  • SHIF (NHIF) and NSSF excel reports can be uploaded directly to  SHIF (NHIF) and NSSF portals

  • A valid National ID number, NSSF number, and NHIF/SHIF number must be provided on the employee form to generate NSSF and NHIF reports.


i)SHIF (NHIF) report

Select the SHIF (NHIF) report and specify the month and year. Odoo will automatically populate the relevant fields based on employees with generated entries for the selected period.


 


Sample report on excel






ii) NSSF Report

Tier 11 NSSF and voluntary Pension can be remitted to either NSSF or a third party insurance. Hence this must be defined at contract level



On report section, select the NSSF report and specify the month and year. Odoo will automatically populate the relevant fields based on employees with generated entries for the selected period.





On an excel







iii)P9 Form


Select the p9 report and specify the year you'd like to generate the report for and click populate.

 


After population, Odoo pulls all employee entries for each month where a payslip has been validated during the selected year.



Open the eligible employee button and select of employees you and click generate PDF