The Complete Guide for Employers to Kenyan Payslips with ElevateHR Africa.

For Kenyan employers issuing payslips is a legal requirement that cultivates transparency and accountability. Let's unravel the legal framework, delve into the crucial role of transparency, and discover how ElevateHR Africa sets a new standard in payroll management by providing a user-friendly app for seamless payslip generation.

Legal Mandate for Payslips in Kenya:

The Employment Act (Section 31) mandates every employer to provide a written statement detailing employment particulars, including remuneration. This legal provision underscores the commitment to openness and fairness in the employment relationship.

Importance of Transparency and Accountability on Payslips

• Fostering Trust: Payslips serve as a comprehensive breakdown of earnings, fostering trust and understanding between employers and employees.
• Communication Enhancement: Transparent remuneration details enhance communication and contribute to a healthier work environment.
• Adherence to Agreements: Payslips ensure that both parties adhere to agreed-upon terms, establishing accountability and fairness.

Statutory Deductions in Kenyan Payslips:

A Kenyan payslip is incomplete without the inclusion of statutory deductions, which are essential for both employees and employers. These include SHIF-former NHIF, NSSF, and PAYE. Statutory deductions impact both the employer and employee in the Kenyan payroll system. It is crucial to comprehend the specific calculations and implications of each deduction.

Also, failure to register for these deductions can lead to significant statutory penalties for businesses and individuals. Seeking expert advice on statutory deductions or utilizing tools such as a free PAYE calculator can help ensure accurate calculations and compliance with the relevant regulations. Let's delve into each deduction individually.

SHIF (Social Health Insurance Fund), former NHIF

• SHIF (Social Health Insurance Fund) is a new healthcare financing system in Kenya, replacing NHIF.
• It aims to provide equitable and affordable healthcare to all Kenyans, regardless of their employment status.
• SHIF contribution rates are based on income, with a minimum and maximum limit.
• All workers are expected to contribute a percentage of their salaries towards the new health fund, ensuring access to quality healthcare.
• The system seeks to ensure equity and access to health services for the poor and those in the informal sector who were previously not covered under the NHIF.

NSSF (National Social Security Fund)

• NSSF is a mandatory savings scheme for Kenyan workers.
• NSSF deductions are based on gross monthly earnings.
• NSSF deductions are intended to ensure financial security in retirement, disability, or death.
• NSSF deductions are credited to employees' NSSF accounts for retirement benefits.
• Both employees and employers make contributions.
• Employers deduct and remit NSSF contributions on behalf of employees.
• Contributions are a percentage of the employee's salary.
• The NSSF Act sets lower and upper earnings limits.
• NSSF contributions gradually increase over a specified period.

PAYE Deduction on Payslip

• PAYE stands for Pay As You Earn and is an income tax deduction mechanism.
• It is calculated based on an employee's taxable income and collected by employers on behalf of the Kenya Revenue Authority (KRA).
• The PAYE rates are on a graduated scale with the lowest rate being 10%.
• Employees resident in Kenya are allowed personal relief on PAYE deducted on their employment income.
• Late filing and payment of PAYE attract penalties.
• Employers are required to remit HELB contributions deducted from salaries paid to their employees.
• PAYE ensures that the yearly amounts you have to pay are collected evenly on each pay day over the year.
• Employees may be entitled to tax credits and to tax reliefs and exemptions to reduce the amount of tax they pay.
• Employees who are domiciled/resident in Kenya are required to pay income tax.
• Non-resident employees are taxable only on their income earned from within Kenya or derived from.

How To Generate Employee Payslips with ElevateHR Payroll Processing Software

1.Register an Account:

Begin by registering an account with ElevateHR. Provide the necessary information and follow the registration process to gain access to the payroll processing software. We will be in touch after your registration to help you get set up.

2. Explore ElevateHR's Features:

• Once registered, familiarize yourself with ElevateHR's payroll management features. Understand the tools available for payslip generation within the platform.

3. Employee Self-Service App:

• As an individual employee, you can generate your own payslip. Log in to the ElevateHR platform and navigate to the Employee Self-Service App. This app empowers employees to independently generate their payslips. ElevateHR’s online payslip app is compatible with both Android and iOS

4. Initiate Payslip Generation:

• Once inside the app, locate the option to generate payslips. This may be prominently displayed or found within a specific section of the app.

5. Follow the Prompts:

• Follow the step-by-step prompts provided by ElevateHR. The software may guide you through selecting the desired pay period, reviewing deductions, and finalizing the payslip.

6. Review and Confirm:

• Before finalizing the process, carefully review the generated payslip for accuracy. Confirm that all details, including earnings and deductions, are correct.

7. Download or Print:

• Depending on your needs, choose the option to download the payslip electronically or print a hard copy for your records.

8. Additional Support:

• If you encounter any issues or have questions during the payslip generation process, utilize ElevateHR's support resources or contact our customer service for assistance.

Adopting Technological Evolution of Payslip Generation

Recent tech advances have transformed payroll, bringing payslip creation into the digital era.  Traditional paper-based payslips are making way for electronic systems and online platforms. Payroll software and integrated HR systems have not only streamlined the process but have also enhanced the accuracy of payslip creation. Automated systems precisely calculate salary structures, tax deductions, and statutory contributions, ensuring compliance with changing regulations.  

Furthermore, the adoption of cloud-based solutions has facilitated secure storage and easy retrieval of payslips. It also provides a convenient and organized way for both employers and employees to access historical payslip records.

Data Security Measures for Payslip Information

In the digital payroll era, safeguarding payslip information is crucial. Trusted partners like ElevateHR Africa employ robust security measures—encryption, multi-factor authentication, and regular audits—to ensure payslip confidentiality. Compliance with data protection regulations underscores a commitment to privacy, fostering trust between employers and employees.

The Role of Payslips Beyond Compliance:

1. Loan and Mortgage Applications: Payslips serve as vital documents when employees apply for loans or mortgages.
2. Visa and Immigration Processes: Payslips often play a role in proving financial stability during visa and immigration applications.
3. Budgeting and Financial Planning: Employees can utilize payslips for effective budgeting and financial planning.

Conclusion:

Issuing payslips transcends legal compliance; it shapes transparent and accountable employment relationships. ElevateHR Africa not only meets these requirements but sets a new standard with its user-friendly app, putting the power of payslip generation directly into the hands of employees. 

To set up your employees on the ElevateHR Africa ESS App, click here. 
 

Choose compliance, choose clarity, choose ElevateHR Africa. 

(App available on Play Store and App Store)