More than half of small businesses still use spreadsheets and manual processes for payroll. If you’re one of them, you are doing a huge disservice to your company that can affect not only your finances but employee experience, too.
Processing payroll with such outdated systems often means that:
- You’ll experience regular payroll errors
- Employees will have to deal with late or incorrect salaries
- You won’t keep up with all the compliance requirements stipulated by Kenyan labor laws
- You’ll be operating across multiple systems with siloed data that can’t paint a correct picture of your payroll expenses
The solution to these issues comes down to investing in an online payroll service in Kenya.
That service can refer to payroll apps for small businesses or managed payroll processing support.
The latter is the best option when you don’t have the capacity to run your own payroll, even with payroll automation tools in the picture.
That’s because you’ll receive more support, and you won’t actually be involved in the tedious, time-consuming part of payroll processing.
On the other hand, if you choose a payroll app, you must have an in-house team to run the platform.
However, either of these two options is much better than doing payroll manually.
Read on to find the five best online payroll services for a Kenyan business.
Top 5 Online Payroll Services in Kenya
These are some of the top online payroll providers in Kenya. For each provider, we tell you why they might be a good fit and the best-case scenario to use them.
1. Bridge Talent Management (BTM)
If you’ve been wrestling with payroll errors or live with the constant worry that your employees’ salaries aren’t hitting their accounts on time, BTM eliminates that burden entirely.
As a managed payroll processing service, BTM handles your entire payroll operation end-to-end.
In this case, you are not just buying payroll software. What you get is software plus a dedicated payroll specialist who takes ownership of the process.
BTM’s system also automatically calculates and submits all statutory deductions on time. More importantly, Bridge Talent Management layers in quality assurance processes to catch errors before they happen.
You can work on other parts of your business, knowing that your payroll is in experts’ hands.
However, the best thing about payroll services with BTM is that it’s fully customized to your business needs. All the data you share with BTM will be safe and fully encrypted. The system also includes permission controls to ensure that only authorized users can access it.
BTM has created trust across more than 100 companies in multiple sectors and regions because this hands-on approach works.
With such a managed service, you will reduce payroll errors and transfer the entire compliance risk to experts who’ve seen it all and guarantee you won’t miss a deadline or delay paying your team.
Book your free consultation to learn how our payroll specialists can help you reduce payroll processing time and ensure total compliance.
BTM features
- A system to calculate and submit PAYE, NSSF, and SHIF deductions automatically and on time.
- Integrated leave and time tracking to ensure payroll reflects attendance and approved leave days.
- Payroll specialists to manage payroll from start to finish.
- Employees can access their payslips and P9 forms anytime through a secure online self-service system.
- Quick access to HR and management lines for faster issue resolution.
- On-demand reports for statutory deductions, taxes, or the overall payroll cost statements
2. Workpay
Workpay is a popular cloud payroll service known mostly for its multi-country payroll processing across Africa.
If you hire in more than 10 African countries, Workpay is a good fit since it lets you pay employees in their local currencies from a single system.
The platform also integrates seamlessly with other top financial and accounting systems you may already use.
Workpay features
- Multi-currency salary disbursements
- On-demand statutory and tax reports
- Payroll processing automation
- Access to employee payslips
- Payroll financing for employers
- Android and iOS employee self-service app
3. KaziQuest
Like WorkPay, KaziQuest is a cloud-based payroll automation tool that works for businesses of different scales and helps with your entire payroll process.
This payroll service can automate salary calculations, manage deductions, and make salary disbursements. You can calculate the salaries of hundreds of employees with just one click.
The platform also tracks data on work hours, leave balances, and overtime, and later provides payroll reports that you can share across your teams.
KaziQuest features
- Automated payroll calculations
- Leave and benefits management
- Real-time payroll compliance
- Document management
- Employee self-service that allows them to view payslips, update personal details, and download tax forms
4. Sage Payroll
Although Sage is a multinational company, they’ve been able to localize payroll solutions for Kenyan businesses via Sage 300 People.
This online payroll service is best for medium to large organizations that need advanced HR and payroll management features.
Sage 300 People can support unlimited companies, employee records, and pay period setups.
It allows full customization of earnings, deductions, benefits, and company contributions to match any organization’s payroll structure.
Sage Payroll features
- Automatic salary payments and deductions
- Single click for tax submissions
- Salary splits across multiple bank accounts
- Detailed activity tracking and field-level access control
- Leave reports
- Printable payslips
- Backed up employee records
- Customize the leave function to match your company’s policies
- Statutory compliance across 12 African countries
5. Wagemaster Kenya
Wagemaster Kenya is a Kenyan payroll solution for businesses that need flexibility in managing and running payroll.
It supports weekly and monthly pay runs, and is therefore a good option for businesses that are not exclusively formal or those that work regularly with casual employees.
And if you operate in multiple countries, Wagemaster can process, record, and report salary payments and deductions in more than one currency.
Wagemaster features
- Customize earnings, deductions, and contributions to fit your business needs.
- Automatically calculate and file statutory deductions.
- Handles tax computations accurately and on time.
- Allows users to send automated emails with payslips and P9A forms to employees.
- Generates detailed reports for bank transfers, timesheets, and more, with options for custom report creation.
Find out how much you can expect to pay for payroll in our guide on Payroll Service Rates in Kenya.
5 Non-Negotiable Features for Your Online Payroll Service
The payroll market is expected to hit $32.6 billion in 2025. Translation: You have hundreds of online payroll services to choose from.
However, before you settle on a platform, make sure that it provides these five core features.
1. Automated salary calculations
The reason you want an online payroll service is because you need to eliminate the stress of payroll processing.
At the very least, your software should automate most of what goes into running payroll. For example, it should be able to calculate salaries based on employee working hours and apply the correct deductions, allowances, and statutory contributions automatically.
It should handle variations such as overtime, bonuses, commissions, unpaid leave, and benefits without requiring manual adjustments.
Ultimately, an online payroll service should reduce errors, save time, and ensure employees are paid accurately every cycle.
2. Compliance with local tax laws
A good payroll processing system should automatically apply current tax rates, statutory deductions, and contribution rules based on local labour and tax regulations.
These are the main statutory deductions and contributions required under Kenyan law:
- Pay As You Earn (PAYE) tax.
- National Social Security Fund (NSSF) contributions at 6% from both the employer and the employee.
- Social Health Insurance Fund (SHIF) deductions at 2.75% of gross salary.
- Affordable Housing Levy at 1.5% of gross salary.
- Employee-specific deductions such as HELB loan repayments and SACCO contributions.
The service should also update automatically whenever Kenyan tax or labour regulations change. Likewise, it should ensure all payroll records are properly formatted and compliant so you can file them without errors or manual adjustments.
And just so you see the severity of the situation, these are the fines you risk incurring if you work with non-compliant online payroll services.
- PAYE non-compliance: 25% of tax due or KSh 10,000 plus 5% late payment penalty and 1% monthly interest
- Late PAYE filing (after the 9th): 25% of tax due or KSh 10,000
- Missed NSSF contributions: Up to KSh 50,000 per violation, plus 5% monthly penalty
- Affordable Housing Levy late submission: 3% penalty
- HELB repayment delays: 5% monthly penalty
- Missing P9 forms or records: Additional payroll compliance violations and potential fines
3. Customization freedom
As your organization grows, your workforce will naturally change. Employees will leave, new ones will join, and positions or pay structures will evolve.
Your payroll system should be flexible enough to grow with you. It should let you easily customize earnings, deductions, and employee information without having to contact the provider every time.
4. Guaranteed data security
Since you’re trusting your employee and company data to a third party, the online payroll service should have a stringent data security guarantee.
Before committing, look at whether the provider has had previous data breaches. You can also ask them if they’re ISO 27001 certified. This certification ensures that:
- Employee and company payroll data are stored and processed securely.
- Confidential information such as salaries, bank details, and tax records is protected under international standards.
- The system maintains privacy and compliance at all times.
5. Support is easily accessible
Even with a skilled payroll team, you’ll occasionally need help from your payroll service provider. At the very least, the platform you use should offer reliable email or chat support.
Ideally, you should also be able to reach a real person by phone when you need quick, hands-on assistance.
Check out this guide to find a few other top features to look out for in payroll apps for small businesses.
Get Reliable, Real-Time Online Payroll Support
According to a 2024 study by the Global Payroll Association, half of all small businesses have faced penalties due to payroll errors at some point. This happens for many reasons, the main one being the lack of the right systems.
Now with this list, you already have a few options for an online payroll system that can save you time and errors.
However, owning a payroll system doesn’t guarantee compliance.
The easiest and most hands-free way to simplify payroll and ensure compliance is to outsource payroll to a qualified HR and payroll processing firm.
For example, Bridge Talent Management gives you the best of both worlds. You get an automated system that guarantees accurate payroll and expert HR oversight to maintain full regulatory compliance every pay cycle.
When set up, our online payroll service can operate almost entirely hands-free, except for occasional updates when your company structure changes.
Book a free consultation to learn how Bridge Talent Management can simplify your payroll and keep your business fully compliant.
FAQs
What is a payroll service?
A payroll service handles the entire process of paying your employees, from calculating salaries and deductions to ensuring everything complies with Kenyan labor laws. You can choose between online payroll software (which your team runs) or a managed service (where experts handle everything for you).
What is the best way to do payroll for an SME?
If you have an in-house team, payroll automation software is all you need to purchase. However, for most SMEs, a managed payroll service is the better choice as it gives you the software and a dedicated payroll specialist who can ensure payroll accuracy and compliance without pulling you away from running your business.
Which features should I consider before choosing an online payroll service?
The best cloud payroll services should offer automated salary calculations, compliance with Kenyan tax laws, customization options, data security, and accessible support. These features guarantee accurate payments, keep you compliant, and save you from costly penalties.
Reach out to a payroll specialist at Bridge Talent Management to learn more about simplifying your payroll.
