Non-compliance is one of the top reasons Kenyan SMEs face unexpected penalties and disruptions. This checklist covers the core obligations across KRA tax, NSSF & NHIF, county permits, employment law, and corporate governance. Work through it annually and whenever you hire, expand, or change your business structure.
ⓘ This checklist is for general guidance only. For your specific situation, speak to our compliance team.
1. KRA Tax Obligations
PIN Registration Required
Every business must have a KRA PIN. Sole proprietors use personal PIN; companies need a separate business PIN. Register at itax.kra.go.ke.
VAT Registration (if turnover > KES 5M/year) Required
Mandatory once annual turnover exceeds KES 5 million. Monthly VAT returns due by 20th of following month.
Monthly VAT Returns Filed Monthly
File even if no transactions (nil return). Penalty: KES 10,000 per month late or 5% of tax due (whichever is higher).
PAYE Filed & Remitted Monthly
Pay-As-You-Earn must be filed and remitted by the 9th of the following month for all employees. Late penalty: 25% of unpaid tax.
Annual Income Tax Return Filed Annual
Companies: within 6 months of financial year end. Individuals/partnerships: by 30 June each year. Instalment taxes due March, June, September, December.
Withholding Tax on Service Payments
Withhold tax on payments to consultants, contractors, and specified service providers. Rates: 5–15% depending on payment type. Remit by 20th of following month.
2. NSSF & SHA (Health Insurance)
NSSF Employer Registration Required
All employers must register with NSSF within 30 days of hiring first employee. Each employee must also be individually registered.
NSSF Contributions Remitted Monthly
Employee contributes 6% of gross pay; employer matches 6%. Due by 9th of following month. Minimum contribution: KES 200 (employee) + KES 200 (employer).
SHA (Social Health Authority) Registration Required
NHIF was replaced by SHA in 2024. Register all employees with SHA. Employee contributes 2.75% of gross salary (no employer match required). Remit by 9th of following month.
AFRA Housing Levy (if applicable) Monthly
Affordable Housing Levy: 1.5% of gross salary (employee) + 1.5% employer contribution. Due by 9th of following month.
3. Employment Law
Written Employment Contracts for All Staff Required
Employment Act requires written contracts for all employees. Must include role, salary, hours, leave entitlements, and notice period.
Minimum Wage Compliance
Kenya minimum wages are set by sector and county. Reviewed annually. Check current rates at the Ministry of Labour website.
Annual Leave Entitlement Applied
Employees are entitled to 21 working days paid leave per year (after 12 months service). Carried over leave must be tracked and honoured.
WIBA (Work Injury Benefits Act) Compliance Required
Must maintain insurance cover for all employees against work-related injuries. Failure to insure is an offence under WIBA.
Payslips Issued Each Pay Period
Employees must receive a payslip detailing gross pay, deductions (PAYE, NSSF, SHA, Housing Levy), and net pay.
Redundancy/Termination Procedures Followed
Notice periods, severance pay, and procedural fairness requirements under the Employment Act must be followed to avoid wrongful termination claims.
4. Business Permits & Licences
Single Business Permit (County) Annual
Required for all businesses operating within a county. Renewed annually — fees vary by county, business type, and turnover. Operating without is an offence.
Sector-Specific Licences
Check if your industry requires additional licences: food & beverage (county health), financial services (CBK/IRA/CMA), health (MOH), education (MoE), etc.
Fire Safety Certificate Annual
Required for business premises. Inspection by county fire department. Ensure fire exits, extinguishers, and safety plans are in place.
NEMA Licence (if applicable)
Required for businesses with environmental impact (manufacturing, food processing, chemicals). Environmental Impact Assessment may be needed for new projects.
5. Corporate Governance & Filings
Annual Returns Filed with BRS Annual
Companies must file annual returns with the Business Registration Service within 42 days of AGM. Includes updated director/shareholder information.
Audited Accounts (if required)
Companies above KES 5M turnover or with external investors typically require audited financial statements. Check your Articles of Association and shareholder agreements.
Beneficial Ownership Register Updated
Companies must maintain a register of beneficial owners (persons owning 10%+ of shares) and file with BRS. Required under the Business Laws (Amendment) Act.
Director/Shareholder Changes Notified to BRS
Any change in directors, shareholders, registered address, or company name must be filed with BRS within 14 days of the change.
Data Protection Registration (if applicable)
The Data Protection Act 2019 requires businesses that process personal data to register as data controllers/processors with the Office of the Data Protection Commissioner (ODPC).
6. Quick Wins & Best Practices
Compliance Calendar Created
Set up a monthly/annual calendar with all filing deadlines. Assign an owner for each. Missed deadlines compound quickly into large penalties.
Business & Personal Finances Separated
Maintain separate bank accounts for the business. Mixing funds is one of the most common causes of tax complications for SME founders.
Receipts & Records Kept for 5+ Years
KRA requires records to be kept for at least 5 years for audit purposes. Use cloud accounting software (QuickBooks, Xero, Sage) to stay organised.
Tax Clearance Certificate Obtained (if tendering)
Required for government tenders and contracts. Apply via iTax once all returns are filed and taxes are settled.
Need help closing compliance gaps?
Our compliance and risk team works with Kenyan SMEs to audit their obligations, fix gaps, and set up systems that keep them clean year-round — without the headache.
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