Internships and student attachments are how many young people get their first experience of work, and how many businesses find talent. Yet they sit in a grey area. Is an intern an employee? Must they be paid? Is the stipend taxed? The answers depend on the arrangement, and a vague one creates problems for both sides. This guide sets out the basics. It is general information; take advice for your situation.

Intern, trainee or employee?

An attachment is usually a placement arranged through a school or college to give a student practical experience, often unpaid or with a small allowance. An internship is typically a fixed period of work-based learning, after or between studies. Some people called interns do real work under the direction of the business and are treated as employees in law. The label does not decide it; the reality of the relationship does. If the person works set hours, does tasks that would otherwise be done by staff and is paid regularly, treat them as an employee.

Put it in writing

Whatever the arrangement, agree and sign a short document. It should state the start and end dates, the duties, the hours, the supervisor, the pay or stipend, the leave and the conditions for ending early. It should also say whether there is any promise of a job at the end. A clear letter avoids misunderstandings. What to check in an employment contract before you sign lists points that apply to interns as well.

Pay and stipends

There is no general rule that attachments must be paid, but many employers pay a stipend to cover transport and meals. If the intern is effectively an employee, minimum wage rules may apply, so check the rate for the role with the minimum wage checker and read how to check the minimum wage for your job. Paying less than the lawful wage to someone who is in fact an employee is a risk for the employer.

Tax on stipends

A regular payment for work is generally income. If a stipend is paid to an employee-like intern, PAYE may apply once the income passes the tax-free threshold. Use the PAYE calculator to see whether any tax is due at a given amount. Reimbursing actual costs, such as transport against receipts, is treated differently from a fixed allowance. Taxable allowances and company benefits explains the difference.

Statutory deductions

If the intern is an employee, NSSF, SHIF and the Housing Levy may apply, and the employer must register and pay. Check the position with the relevant agencies and see employer obligations checklist. The intern needs a KRA PIN; how to get a KRA PIN is a good first task for a young person.

Health, safety and supervision

An employer owes a duty of care to everyone on the premises, including interns. Provide an induction, explain safety rules, supply protective equipment where needed and assign a supervisor. Check that insurance covers interns for injury at work. For attachment students, the school may require a logbook and a supervisor's report, so schedule time for both.

Records for the employer

Keep a file for each intern: the agreement, ID, PIN, school letter, attendance, stipend payments and the end-of-placement report. Record stipends in payroll or the cashbook. The employee records register and the employee attendance register provide ready layouts. If you pay stipends in cash, issue a receipt and have the intern sign.

What interns should do

Ask what you will be paid and when, get the arrangement in writing and keep a record of your work. Ask for a letter of reference at the end. Use the time to learn: ask for feedback, build contacts and take on stretch tasks. Open a bank account and keep proper records of what you earn. Start building good habits with money early; how to budget on a Kenyan salary after deductions applies to a first stipend too.

When an internship leads to a job

If you offer a role at the end, give a proper contract and set a probation period; see probation, contracts and notice periods in Kenya. Time spent as an intern may or may not count towards service, so state it clearly.

A fair deal for both sides

A good placement gives the student real experience and the business real help. Pay a fair stipend where you can, set clear expectations, protect the intern's safety and keep records. Treating interns well builds a reputation that attracts good people for years.