How to Calculate Overtime in Kenya 2026

Working Hours in Kenya

Before understanding overtime, it is essential to know the standard working hours prescribed by Kenyan law. Section 27 of the Employment Act 2007 sets the following limits:

• Maximum working hours: 52 hours per week
• Normal working day: Most employment contracts specify 8 hours per day for a standard workday
• Working week: Typically 5 or 6 days, depending on the industry and employment contract
• Rest day: Every employee is entitled to at least one rest day per week, which is typically Sunday

It is important to note that the 52-hour weekly maximum includes regular hours and any overtime worked. Any hours worked beyond the employee's normal contractual hours (but within the 52-hour cap) qualify as overtime and must be compensated accordingly.

For context on how overtime earnings affect an employee's total pay and deductions, see our Understanding Your Payslip guide. To calculate the impact on take-home pay, use our salary calculator.

When Does Overtime Apply?

Overtime applies in the following situations under Kenyan employment law:

• Hours beyond the normal workday: If an employee's contract specifies 8 hours per day and they work 10 hours, the additional 2 hours are overtime
• Work on a rest day: Any hours worked on the employee's designated rest day are treated as overtime, paid at an enhanced rate
• Work on a public holiday: Any hours worked on one of Kenya's 13 gazetted public holidays are treated as overtime at the highest rate
• Work beyond agreed weekly hours: If the employment contract specifies 40 hours per week and the employee works 48 hours, the extra 8 hours are overtime

Overtime should be authorised by the employer in advance. Employers cannot unilaterally require excessive overtime, and employees should not be penalised for refusing to work overtime that would push them beyond the 52-hour weekly limit.

Overtime Rates Under the Employment Act

The Employment Act prescribes different overtime rates depending on when the overtime is worked:

These are minimum rates. Employers are free to offer higher overtime rates as part of their employment contracts or company policy, but they cannot offer less than what the law prescribes.

How to Calculate the Hourly Rate

To calculate overtime, you first need to determine the employee's normal hourly rate. There are two common methods used in Kenya:

Method 1: Based on Monthly Salary and Working Days

1. Determine the employee's basic monthly salary (excluding allowances unless they are contractually part of the regular rate)
2. Divide by the number of working days in the month (typically 26 days for a 6-day week or 22 days for a 5-day week)
3. Divide the daily rate by the number of normal working hours per day (typically 8 hours)

Formula: Hourly Rate = Monthly Basic Salary / Working Days per Month / Hours per Day

Method 2: Based on Annual Salary

1. Calculate the annual basic salary (monthly salary x 12)
2. Divide by the total number of working hours in a year (e.g., 52 weeks x 48 hours = 2,496 hours for a 6-day week, or 52 weeks x 40 hours = 2,080 hours for a 5-day week)

Both methods should yield similar results. The key is to be consistent in the method used across all employees.

Step-by-Step Overtime Calculation Examples

Example 1: Regular Weekday Overtime

An employee earns a basic salary of KES 52,000 per month and works a 5-day week with 8 hours per day. They worked 3 hours of overtime on a Wednesday.

The employee earns an additional KES 1,329.55 in overtime pay for that day.

Example 2: Rest Day (Sunday) Overtime

The same employee (KES 52,000/month) is asked to work 6 hours on a Sunday, which is their designated rest day.

The employee earns KES 3,545.45 for working 6 hours on their rest day.

Example 3: Public Holiday Overtime

An employee earning KES 40,000 per month (6-day week) is required to work 8 hours on Madaraka Day (1 June), a gazetted public holiday.

The employee earns their normal day's pay plus the overtime premium for working on the public holiday, totalling KES 4,615.38 for that day. For a list of all 13 public holidays, refer to our Leave Entitlement Guide.

Night Work Provisions

The Employment Act 2007 includes specific provisions for employees who work at night (generally defined as between 6:30 PM and 6:30 AM):

• Women and young persons: The Act restricts night work for women in industrial undertakings (with certain exceptions) and prohibits night work for persons under 18 years
• Shift workers: Employees engaged in shift work that includes night hours must be provided with adequate rest periods between shifts
• Night shift allowance: While the Employment Act does not prescribe a separate night work overtime rate, many employers provide a night shift allowance as part of their compensation structure
• Health considerations: Employers must consider the health implications of night work and may be required to provide medical examinations for regular night workers

Night work that extends beyond the employee's normal contracted hours still qualifies for overtime at the standard rates (1.5x or 2x as applicable).

Record-Keeping Requirements

Employers in Kenya are legally required to maintain accurate records of hours worked and overtime. Under the Employment Act:

• Daily attendance records: Employers must keep records showing the hours worked by each employee each day
• Overtime authorisation: It is good practice to require written authorisation for overtime before it is worked, to prevent disputes
• Payroll records: Overtime pay must be clearly shown as a separate line item on the employee's payslip (see our payslip guide for details)
• Retention period: Employment records, including time and attendance records, should be retained for at least five years
• Inspection: Labour inspectors have the right to examine these records at any time. Failure to produce them upon request can result in penalties

Using a digital time and attendance system integrated with your payroll software ensures accurate, auditable records. SmartHR Kenya provides built-in time tracking that flows directly into payroll calculations.

Penalties for Non-Compliance

Employers who fail to comply with overtime provisions of the Employment Act face several potential consequences:

• Employee claims: Employees can file claims with the Employment and Labour Relations Court for unpaid overtime. Courts can order payment of all outstanding overtime plus interest
• Labour inspectorate action: The Ministry of Labour can conduct inspections and issue compliance orders. Failure to comply can result in prosecution
• Fines: Employers found guilty of contravening the Employment Act provisions on working hours and overtime can face fines as prescribed by the Act
• Reputational damage: Non-compliance can damage the employer's reputation, making it harder to attract and retain talent
• Back-pay liability: Claims can cover overtime worked over several years, resulting in substantial back-pay obligations

The cost of compliance is always less than the cost of non-compliance. Properly tracking and paying overtime protects both the business and its employees.

How SmartHR Kenya Handles Overtime

SmartHR Kenya's payroll system is designed to handle all overtime scenarios under Kenyan law:

• Automatic rate calculation: The system applies the correct overtime rate (1.5x or 2x) based on the day type (weekday, rest day, or public holiday)
• Pre-loaded public holidays: All 13 gazetted public holidays for 2026 are pre-configured, so the system automatically applies the 2x rate for work on these days
• Hourly rate computation: The system calculates the correct hourly rate from the employee's monthly salary based on your configured working days and hours
• Payslip integration: Overtime is displayed as a separate line item on employee payslips, showing hours worked and the rate applied
• Compliance reporting: Generate reports showing overtime hours by employee, department, or period to monitor compliance with the 52-hour weekly limit

Explore our features page for the full list of capabilities, or check our pricing plans to get started with compliant payroll processing today.

Frequently Asked Questions

Can an employee refuse to work overtime in Kenya?

Yes. The Employment Act does not compel employees to work overtime beyond the 52-hour weekly maximum. An employee can refuse overtime, and the employer cannot discipline or dismiss them for this refusal unless the employment contract includes a reasonable overtime clause that the employee agreed to. Even then, the 52-hour weekly cap must be respected.

Is overtime calculated on basic salary or gross salary?

Overtime is typically calculated on the employee's basic salary unless the employment contract specifies that certain allowances form part of the regular rate of pay. In practice, most Kenyan employers use the basic salary (excluding variable allowances) as the basis for overtime calculation. The key is that the method must be clearly stated in the employment contract or company policy.

Do salaried employees qualify for overtime in Kenya?

Yes. The Employment Act applies to all employees regardless of whether they are paid hourly, daily, or monthly. Salaried employees who work beyond their contractual hours are entitled to overtime pay. The only exception is employees in managerial or supervisory positions who are explicitly excluded from the overtime provisions by their employment contracts, which is common practice for senior management roles.

What is the maximum overtime an employee can work in Kenya?

The Employment Act sets the overall weekly working hours limit at 52 hours. If an employee's normal working hours are 40 hours per week, the maximum overtime they can work in that week is 12 hours. Employers should track total hours carefully to ensure the 52-hour cap is not breached, as exceeding it is a violation of the Act regardless of whether overtime is paid.

Overtime compliance does not have to be complicated. SmartHR Kenya automates overtime calculations, ensures correct rates are applied, and keeps your business on the right side of the Employment Act 2007. Get started with SmartHR Kenya and simplify your payroll operations today.