Kenya Redundancy & Severance Pay Calculator 2026 ☆ Save
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What the law requires on redundancy
Where an employee is declared redundant in Kenya, severance pay is calculated at 15 days' pay for each completed year of service — the statutory minimum, and the figure the calculator above applies.
Your contract or a collective agreement may provide more. It cannot provide less.
Note the word redundancy: severance applies where the position is genuinely no longer required. It is not payable on resignation, and it is treated differently from dismissal for misconduct — so establishing which category applies is the first question, not a detail.
Severance is not the whole entitlement
A redundancy package typically includes several separate components, and people frequently accept a figure without checking all of them:
- Severance pay — 15 days per completed year;
- Notice, or payment in lieu of it, per your contract and the law;
- Accrued leave, paid out for days not taken;
- Any earned but unpaid salary, and pro-rata benefits your contract provides;
- Your pension or NSSF position — see below, because this usually matters more than the severance itself.
The process has requirements too
Redundancy in Kenya is regulated, and a payout does not cure a defective process. In broad terms an employer is expected to give proper notice to the employee and, where applicable, the union and the labour officer; to apply fair and objective selection criteria; and to account for factors such as seniority, skill and reliability.
If you believe the selection or the process was unfair, there are time limits for raising a dispute. Act promptly and take advice — from your union, a labour officer, or an employment advocate. And do not sign a settlement you do not understand because you feel rushed; asking for time to take advice is a reasonable request.
Your retirement savings: the decision that outlasts the payout
You will face a choice about accumulated retirement savings. Preserving or transferring them keeps decades of compounding intact; withdrawing typically triggers tax and restarts the clock.
Withdrawing at redundancy is understandable and often the most damaging financial decision available — because the loss is not the tax, it is the growth you never see. Model what you would give up in the compound interest calculator before deciding, and check your NSSF record while you are at it.
The week after: what to do with the money
- Work out your runway. Divide the net amount by your essential monthly costs — that number should drive every other decision;
- Clear the most expensive debt. Consumer credit typically costs far more than any return you can earn — see the debt payoff planner;
- Do not commit to anything large for a month. Lump sums attract urgent-sounding opportunities, and almost none survive a month's delay;
- Keep the rest accessible — this is runway, not investment capital. See the savings calculator;
- Recalculate your budget on the new reality, using take-home figures from the income tax calculator when new work starts.
Frequently asked questions
How is severance calculated?
15 days' pay for each completed year of service, using a 30-day month convention. Your contract may provide more.
Do I get severance if I resign?
No — severance applies to redundancy, where the role is no longer required.
Is severance taxed?
Tax treatment of terminal dues depends on their components and the rules in force. Ask for a breakdown of what is being paid and how it is being taxed, and confirm with KRA or a practitioner.
What if I think the redundancy was unfair?
Raise it quickly — time limits apply. Speak to your union, a labour officer or an employment advocate before signing anything.
Should I take my pension in cash?
Usually not. Preserving it protects decades of compounding; withdrawing costs tax now and growth later.
Statutory severance is 15 days per completed year per the figures held in this site's configuration. Employment law and tax treatment change and individual circumstances differ — take advice. General information, not legal or tax advice.