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Severance pay calculator (Employment Act 2007)

Calculate the statutory severance, notice pay, and accrued leave you're owed on redundancy. Employment Act 2007 §40(1)(g) sets the floor at 15 days' pay per completed year of service.

KES
years
days

Employment Act minimum: 28 days for monthly contracts.

days

Standard: 21 working days/year.

Result

Total gross payout

KES 336,000

Severance (15 days/year)

KES 200,000

Notice pay

KES 80,000

Leave pay

KES 56,000

Estimated tax (after 100k exempt)

KES 70,800

Estimated net to you

KES 265,200

By paybillke · Updated May 2026

Independent. Not affiliated with any company listed.

Employment Act 2007 §40(1)(g). 15 days pay per completed year. KES 100,000 lump-sum exemption.

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Three things to ask for on redundancy

When your employment ends through redundancy (not gross misconduct), you're statutorily owed three components. Make sure all three are in your final settlement letter:

  1. Severance pay: at least 15 days of pay per completed year of service. Many employers pay one-month-per-year as a goodwill premium, push for that if you have leverage.
  2. Notice pay: usually 28 days for monthly contracts, 7 days for weekly ones. If your employer wants you to leave immediately, they pay this in lieu.
  3. Accrued leave: any unused annual leave converted to cash at your daily rate.

Tax treatment

Under the Income Tax Act, the first KES 100,000 of any lump-sum redundancy / severance payment is exempt. Above that, PAYE applies at your usual band rate (we estimate 30% here, typical for the salary level that gets severance). Ask your HR / payroll which month they will declare the lump sum to KRA so you can plan your year-end tax.

What if I'm dismissed for cause?

Severance under §40(1)(g) only applies to redundancy. Termination for cause (gross misconduct, etc.) does not entitle you to severance, only your accrued benefits to date. If you dispute the cause, you can file with the Employment & Labour Relations Court.

Frequently asked

Can I be paid less than 15 days per year?

No. The Employment Act sets 15 days as the statutory minimum for redundancy. A contract clause paying less is unenforceable. A contract paying more is enforceable.

Does the calculator handle gratuity?

Not directly, gratuity is contractual, not statutory. Add it manually as part of your "totalGross" if your employer offers it.

Can my employer pay severance in instalments?

Only with your written agreement. By default it is due as a lump sum at termination.

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