How is gratuity calculated in Kenya?

The statutory basis under the Employment Act is 15 days' pay for each completed year of service. Your daily rate is the monthly salary divided by 30, multiplied by 15 gives half a month's pay per year of service. So service pay roughly equals half your monthly salary times your years of service.

Who is entitled to service pay in Kenya?

Service pay under section 35(5) is due to employees who are not covered by NSSF, a registered pension or provident scheme, or a gratuity arrangement at least as favourable. Where you are covered, those schemes generally take the place of statutory service pay, though redundancy severance under section 40 is separate.

Is redundancy severance the same as gratuity?

The rate is the same — 15 days' pay per completed year of service — but it is paid under section 40 specifically for redundancy, alongside notice pay and any leave owed. A contractual or end-of-contract gratuity can be more generous if your contract says so.

Is gratuity taxable in Kenya?

Gratuity and service pay are generally subject to PAYE, though there are reliefs that can spread or reduce the tax, and registered pension or gratuity schemes have their own tax treatment. This calculator shows the gross statutory entitlement before any tax.

Does this calculator store my data?

No. All figures are computed locally in your browser and nothing is uploaded, so your salary and service details stay private.

Kenya Gratuity / End-of-Service Calculator

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This Kenya gratuity calculator works out your statutory end-of-service or redundancy entitlement using the Employment Act’s 15-days-per-year rule.

How it works

The statutory rate is 15 days’ pay for every completed year of service. Your daily rate is the monthly salary spread over 30 days:

daily rate = monthly salary ÷ 30
gratuity   = daily rate × 15 × years of service

Because 15 ÷ 30 = 0.5, this is effectively half a month’s salary per year of service. The tool also pro-rates extra months so a part-year counts fairly.

The same 15-day rate underlies both service pay under section 35(5) and redundancy severance under section 40.

Example

With a last salary of KES 60,000 and 8 years of service, the daily rate is 60,000 ÷ 30 = KES 2,000. Gratuity is 2,000 × 15 × 8 = KES 240,000 — exactly half a month’s pay (KES 30,000) per year over eight years.

Notes

Statutory service pay is for employees not covered by NSSF or an equivalent scheme; if you are covered, those benefits may replace it.
Redundancy severance is paid in addition to notice pay and accrued leave.
The figure shown is gross; gratuity is generally subject to PAYE, with some reliefs available.