Processing payroll manually in Kenya is time-consuming and error-prone. With four statutory deductions to calculate -- PAYE, SHA, NSSF, and the Housing Levy -- even a small mistake can lead to penalties from KRA or SHA. Payroll software designed for the Kenyan market automates these calculations, generates the correct filing reports, and helps businesses stay compliant without needing a dedicated tax accountant.
Key Features to Look for in Kenyan Payroll Software
- Automatic PAYE calculation using current KRA tax brackets, including personal relief and insurance relief.
- Built-in SHA deduction table that updates when rates change.
- NSSF Tier I and Tier II computation with both employer and employee shares.
- Housing Levy calculation at 1.5% with employer matching.
- P9, P10, and P10A report generation for KRA filing.
- Payslip generation in PDF format for distribution to employees.
- Multi-currency support for companies paying staff in USD or other currencies.
- Employee self-service portal for viewing payslips and tax certificates.
The Real Cost of Manual Payroll
Many Kenyan SMEs still use Excel spreadsheets to process payroll. While this may seem cost-effective, the hidden costs are significant. A single PAYE miscalculation can result in a 25% penalty on the shortfall. Late SHA remittance triggers a 5x penalty on the contribution amount. Beyond penalties, manual payroll consumes hours of staff time each month that could be spent on revenue-generating activities.
| Factor | Manual (Excel) | Automated (Payroll Software) |
|---|---|---|
| Time per payroll run | 4-8 hours | 15-30 minutes |
| PAYE accuracy | Prone to errors | Auto-calculated |
| Statutory reports | Manual formatting | One-click generation |
| Compliance risk | High | Low |
| Payslip distribution | Manual email/print | Automated delivery |
| Year-end P9 forms | Hours of work | Instant generation |
How Vendly Simplifies Payroll for Kenyan Businesses
Vendly is built specifically for the Kenyan business environment. It handles all four statutory deductions automatically, generates KRA-compliant reports, and provides a clean dashboard where you can review and approve payroll before processing. Each payroll run produces detailed payslips, a summary of deductions, and the exact figures needed for your P10 return.
Automated Statutory Compliance
When you add employees to Vendly and set their salary details, the system automatically computes PAYE using current tax brackets, applies personal relief, calculates SHA based on the correct salary band, splits NSSF into Tier I and Tier II with employer matching, and applies the 1.5% Housing Levy. All you need to do is review the figures and approve the run.
Reporting and Filing Support
Vendly generates P9 tax deduction cards for each employee at year-end, P10 monthly PAYE returns ready for submission to KRA, and summary reports for SHA and NSSF remittance. These reports can be exported as CSV or PDF files, making it easy to upload them to the KRA iTax portal or share with your accountant.