4 years of service on KSh 40,000 basic gives service pay of KSh 80,000.
Gratuity vs service pay: the actual distinction
People often search for a "gratuity calculator" expecting a fixed legal formula, but Kenyan law doesn't set one. Employer gratuity schemes, where they exist, are entirely a matter of contract, and each employer is free to design their own terms and formula.
What the Employment Act does fix is a narrower, specific payment called service pay, under Section 35(5). It uses the same 15-day-per-year formula as severance pay, but it's triggered by ordinary termination by notice, not redundancy, and it only applies to employees who are not members of NSSF, a registered pension scheme, or an employer's own gratuity or service pay scheme. Since most formally employed Kenyans contribute to NSSF, this payment applies to a narrower group than many people assume.
Rates used in this calculator
Employment Act entitlements
Severance (redundancy)
15 days’ pay per completed year
Service pay
15 days’ pay per completed year (non-NSSF members)
Annual leave
21 working days (1.75 days a month)
Overtime
1.5× on weekdays, 2× on rest days and public holidays
Maximum deductions from pay
Two-thirds of wages
NITA levy (employer)
KSh 50 per employee a month
Frequently asked questions
Is there a statutory gratuity formula in Kenya?
No. Kenyan law does not prescribe a formula for employer-provided gratuity; it's entirely discretionary and set by whatever your employment contract or company policy states. What the law does provide a formula for is a different, narrower payment called service pay, covered by this calculator.
What is service pay and who qualifies?
Service pay under Section 35(5) of the Employment Act applies only to employees who are not members of NSSF, a registered pension scheme, or an employer gratuity or service pay scheme. If you contribute to NSSF, which most formally employed Kenyans do, you are not eligible for this payment.
How is service pay different from severance pay?
They use the same formula (15 days' pay per completed year of service) but apply in different circumstances. Severance (Section 40) applies specifically when employment ends due to redundancy. Service pay (Section 35(5)) applies more broadly, to termination by notice, for employees outside NSSF or a pension scheme.
If I contribute to NSSF, can I still get service pay?
No. Courts have consistently rejected service pay claims from NSSF members, since NSSF membership is itself treated as the alternative retirement benefit the law is trying to ensure every worker has access to.