A cleaner in Nairobi legally owed KES 16,113.75 a month in April 2026 was owed KES 18,047.40 for May, and most employers only knew for certain at the end of June. The 12 percent increase announced on Labour Day was backdated to 1 May, but the legal notice making it enforceable was gazetted on 26 June, leaving small employers two months in arrears before they had processed a single adjusted payslip.
This guide sets out the new minimum wage rates in Kenya for 2026, who they apply to, how to calculate May and June arrears, what happens to NSSF, SHIF and Housing Levy when basic pay rises, and the penalty for paying below the floor. It is written for the owner or HR person of a Kenyan SME who needs payroll right this month.
Key takeaways
- General minimum wages rose 12 percent and agricultural minimum wages 15 percent, effective 1 May 2026, under Legal Notices gazetted in June 2026.
- A general labourer, cleaner, house help or day watchman in Nairobi, Mombasa, Kisumu, Nakuru or Eldoret now earns a basic minimum of KES 18,047.40 a month; the floor is KES 16,650.95 in Ruiru, Limuru and Mavoko and KES 9,628.07 everywhere else.
- Because the order is retrospective, employers owe arrears for May and June on top of the new rate going forward, and statutory deductions must be recalculated on the corrected pay.
- Paying below the minimum is a criminal offence under the Labour Institutions Act, and the court can order the full shortfall repaid on top of the fine.
Kenya minimum wage 2026: what changed and when
On 1 May 2026 the President announced a 12 percent increase in general minimum wages and 15 percent for agriculture, as Nation, The Star and Kenyans.co.ke reported. An announcement is not law. Minimum wages are set by wages orders under the Labour Institutions Act, and an order binds employers only once gazetted. That is why the Federation of Kenya Employers initially said the increase was not yet enforceable, and why COTU and FKE spent May arguing over whether it covered all workers or only those on the statutory floor.
The Labour ministry then published the Regulation of Wages (General) (Amendment) Order, 2026 and its agricultural counterpart. Kenya Law's records show notices dated both late May and late June; the version employers are working from is Legal Notice No. 108 of 26 June 2026, per The Star and The Kenya Times, effective retrospectively from 1 May. FKE directed members to implement the rates immediately and show them on July payslips.
New minimum wage rates in Kenya by area and job category
The order sets three geographic tiers. The figures below are basic monthly minimums reported consistently by Kenyans.co.ke, The Kenya Times and The Star, and they reconcile to a 12 percent uplift on the 2024 rates. Confirm against the gazetted schedule before changing a contract.
In Nairobi, Mombasa, Kisumu, Nakuru and Eldoret, general labourers, cleaners, sweepers, gardeners, house servants, day watchmen and messengers are owed KES 18,047.40. Night watchmen are on KES 20,133.72, junior clerks and machinists on KES 23,350.21, and drivers and shop assistants on KES 24,358.73. The top general grade, covering cashiers, heavy commercial vehicle drivers and Grade I artisans, is KES 40,724.23, up from KES 36,360.92 according to Nation.
In Ruiru, Limuru and Mavoko the general labourer rate is KES 16,650.95; in all other areas it is KES 9,628.07. A city cleaner and a rural cleaner are therefore about KES 8,400 apart, which is why an SME with staff in Nairobi and in Kisii cannot run one flat rate.
Who the minimum wage order applies to in Kenya
The order covers employees in the occupations in its schedule, whether permanent, fixed-term or casual, in a factory, a shop or a private home. The Employment and Labour Relations Court confirmed this in Ramzan v Misango, decided in November 2025 and reported by Kenya Law: a Kisumu domestic worker paid KES 4,000 a month for six years was held to be a regular employee entitled to the statutory minimum, and the employer faced a judgment of roughly KES 570,000 for underpayment, housing allowance, unpaid NSSF and unfair termination.
How to calculate minimum wage arrears for May and June 2026
Compare what you actually paid each affected employee for May and June against the new rate for their category and location. A Nairobi cleaner paid the old KES 16,113.75 in both months is short KES 1,933.65 a month, so KES 3,867.30 in arrears. Pay it as a separate, labelled line on the next payslip so the employee and any labour inspector can see what it was for.
Do not stop at basic. Overtime under the order is one and a half times the hourly rate on normal days and double on rest days and public holidays, and the hourly rate derives from basic monthly wage, so May and June overtime was also underpaid. Leave pay and any allowance set as a percentage of basic move too.
Effect of the minimum wage increase on NSSF, SHIF and Housing Levy
Every statutory deduction keys off pay, so a higher floor raises the employer's bill as well as the employee's. NSSF is a percentage of pensionable earnings within tier limits, SHIF a percentage of gross, and the Affordable Housing Levy a percentage of gross paid by both sides. When you process arrears, recompute those deductions on the corrected pay for the months concerned and remit the difference; do not treat arrears as a bonus outside the statutory base. Check the live NSSF tier limits and the SHIF and levy percentages against current KRA, NSSF and SHA guidance, because the NSSF bands have moved in phases since 2024.
PAYE can bite unexpectedly. A worker near the tax-free band can start paying tax once basic rises, and lumping two months of arrears into one payslip pushes that month's tax higher than it would have been had the money been paid on time. Warn staff before they see the payslip.
House allowance and the minimum wage: the mistake that costs most
The most common and most expensive error Kenyan SMEs make is treating the gazetted figure as total pay. It is not. Where the employer does not provide housing and the contract does not say pay is consolidated, the general order adds a housing allowance of 15 percent of the basic minimum on top of basic, as both Oraro and Company Advocates and HRFleek set out, and section 31 of the Employment Act separately obliges employers to house staff or pay for housing. A Nairobi cleaner on the bare minimum should be receiving about KES 20,754 before deductions, not KES 18,047.40.
The cost compounds quietly. A missing 15 percent a month, plus the uplift missed since May, plus recalculated NSSF and overtime, across eight cleaners and guards, reaches several hundred thousand shillings by the time a former employee files a claim, and section 90 of the Employment Act gives them three years to do it. The fix is a one-line contract clause stating whether pay is consolidated, and payroll that carries housing as its own component.
Penalties for paying below the minimum wage in Kenya
Section 48 of the Labour Institutions Act makes paying below a wages order an offence. The Act's general penalty is a fine of up to KES 50,000 or up to three months' imprisonment, or both, figures Nation's coverage of the 2026 order also cites. What hurts more is section 48(3): the court may order the employer to pay the full difference between what was owed and what was paid, and section 48(5) preserves the employee's separate right to sue. The fine is the small number; arrears, housing and unremitted NSSF and SHIF are the large one.
Frequently asked questions
Does the 12 percent increase apply to everyone in my company?
No. The obligation is to pay at least the new minimum for each employee's category and location. Staff already above the floor have no statutory entitlement to a raise, though many employers give one to keep differentials sensible. COTU's view that it is a general increase for all workers is a negotiating position, not what the gazette notice says.
My business is in a small town. Which rate do I use?
Use the tier for where the employee actually works, not where head office is registered. Nairobi, Mombasa, Kisumu, Nakuru and Eldoret are the top tier, Ruiru, Limuru and Mavoko the middle, everything else the lowest. With staff across tiers, a system like Force HRM that stores work location per employee applies the right floor automatically.
Do I have to pay arrears if I only learned about the gazette in July?
Yes. The order is expressly effective from 1 May 2026, so May and June are owed regardless of when you read about it. Pay the arrears as a labelled line, recompute statutory deductions for those months, and keep the calculation on file in case of a labour inspection.
Getting the 2026 minimum wage right on every payslip
A wage order that lands two months after its effective date, with three tiers, a dozen job categories and a separate housing rule, is not something to manage by hand in a spreadsheet. Force HRM is built for this kind of Kenyan compliance: mobile-first, calculating PAYE, SHIF, NSSF and the Housing Levy on the corrected figures, and operable through AI assistants over MCP so you can ask it to apply the new floor and generate arrears instead of clicking through every employee. Run compliant Kenyan payroll with the 2026 minimum wage built in.
