Overtime is time worked beyond your normal hours, and Kenyan wage rules require it to be paid at a higher rate. Knowing the rules protects employees from underpayment and helps employers budget for it correctly.

The two overtime rates

The Regulation of Wages (General) Order sets the common rates:

  • 1.5 times the normal hourly rate for overtime on a normal working day
  • 2 times the normal hourly rate for work on a rest day or a public holiday

Your contract or a collective agreement may give more, but not less. Some senior or managerial roles are paid a salary that already covers extra hours; check your contract.

Working out the hourly rate

A common payroll convention divides the monthly basic pay by 225 hours, which assumes a normal month of about 225 hours. The right figure depends on your normal hours in the contract and the wage order for your sector, so confirm the divisor your employer uses. Using KES 45,000 as monthly basic pay, the hourly rate is KES 200.

A worked example

You work 6 hours of overtime on normal days and 8 hours on a Sunday. At an hourly rate of KES 200:

  • Normal-day overtime: 6 x 200 x 1.5 = KES 1,800
  • Rest-day work: 8 x 200 x 2 = KES 3,200

Total overtime pay is KES 5,000. The overtime pay calculator does the sum for any figures, and shows how each part is built.

How overtime is taxed

Overtime is part of your taxable pay in the month it is paid. It is taxed in the same bands as your salary, so the extra pay falls in your highest band, and SHIF and the Housing Levy are charged on it as part of gross pay. The effect is the same as for a bonus; see tax on bonuses and commissions for a worked example. Test your own overtime in the PAYE calculator.

Recording overtime

Disputes about overtime start with missing records. Employees should note the hours with dates; employers should approve overtime before it is worked and keep timesheets. These templates help:

What employers should watch

Regular heavy overtime is a sign of understaffing, and it is expensive. Compare the cost with hiring another person using the staff cost and headcount budget planner. Also check legal limits on weekly hours and rest periods for your sector.

Getting it right on the payslip

Overtime should appear on its own line with the hours and rate, so the employee can check it. Our guide to reading your payslip line by line explains the rest of the payslip.

If you think you are underpaid

Keep your own record of hours, ask for the calculation in writing and raise it with HR first. If that fails, the labour office can help. Check the gazetted minimum for your role with the minimum wage checker.

Wage orders and rates differ by sector and are revised from time to time. Confirm the current rules with the labour office or a registered professional.

Common questions

How do I work out my hourly rate? For employees paid monthly, the Regulation of Wages (General) Order treats the hourly rate as at least one 225th of the monthly minimum wage. Many employers apply the same divisor to the contract salary, and your contract may give a better one.

Is overtime taxed more heavily? Overtime is added to the month's pay and taxed through PAYE at your marginal rate, so the extra pay can be taxed at a higher band than your basic pay. The tax is not a different tax, it simply lands on the top slice of income.

Can overtime be paid in time off instead? Only if your contract or a collective agreement allows it and you agree. Otherwise the law expects overtime to be paid at the rates set for normal days and for rest days and public holidays.