At least 180 days of basic pay: basic salary ÷ 30 × 15 × 12.
How is severance pay calculated in Kenya?
Severance pay is 15 days' basic wages for each completed year of service. Your daily rate is your basic monthly salary divided by 30, then multiplied by 15 and by the number of completed years worked.
Is severance pay based on gross salary or basic salary?
Kenyan courts have determined that severance pay is calculated on basic salary only, excluding allowances, even if your contract or payslip separates the two.
Am I entitled to severance pay if I resign?
No. Severance pay under the Employment Act only applies when employment ends due to redundancy. Resignation, dismissal for cause, or natural contract expiry do not trigger this statutory payment.
Is severance pay taxable?
Yes, severance pay is treated as taxable income and is added to other termination dues when working out the final PAYE liability.