Outsourced Payroll Processing and Management in Kenya

Outsourced Payroll Processing and Management in Kenya.

Following his ascension to the presidential seat in 2022, President William Ruto vowed to, among other things, crack down on ‘tax cheats.’ In the corporate world, the impact of this is twofold. On the one hand, the Kenya Revenue Authority (KRA) will enhance the vigilance with which they ensure tax compliance throughout Kenya. On the other hand, from the employer’s perspective, they will need to be extra cautious in their accounting functions, especially their payroll processing. A company looking to avoid being legally culpable for the crime of tax evasion and to strengthen its accountability for its resources will need to invest in quality payroll processing. They could do this internally or opt for payroll outsourcing.

Regardless of whether a company prefers internal or outsourced payroll processing services, the same processes and rules apply. The entity must be conversant with local labor laws and payroll-related statutory policies and provisions. Mainly, they will need to accurately act on policies regarding the computation of Pay As You Earn (PAYE), Withholding Tax (for entities with expatriates or consultant staff), Tax Reliefs/Rebates, Social Security Contributions (NSSF), and NHIF contributions. It is imperative that the payroll accountant understands what income is taxable, what is tax-exempt, and all the applicable thresholds. Not to mention, any tax declarations ought to be made within the deadlines that the government, through KRA, has set. The accountant ought to keep abreast of any statutory developments and effect these in the payrolls accordingly and promptly. At the end of a successful payroll processing cycle, the employer makes payments to their human resources on time and timely remissions to KRA (PAYE and NITA levy), NSSF, NHIF, and other organizations of interest (if applicable). Moreover, the company inches closer to strengthening its accountability for its resources.

Companies that prefer payroll outsourcing would significantly benefit from working with skilled professionals adept at payroll processing services: the likes of Career Options Africa Group (COAG). In addition to payroll processing, this esteemed agency in Kenya specializes in Employer of Record (EOR), Professional Employer Organization (PEO), and recruitment agency services. Specific to payroll outsourcing, COAG’s seasoned professionals are well-versed in Kenyan labor laws and payroll-related statutory provisions. More importantly, they embody a customer-centric commitment to delivering timely and quality services that leave their clients satisfied and coming back for more.

Rodgers Tumuhairwe 18 May 2023
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