What hiring an employee involves
Hiring brings two responsibilities: choosing the right person, and meeting your legal obligations as an employer. Many small businesses focus only on the first and stumble on the second, finding out about statutory deductions and contracts after problems arise. Getting both right from the start avoids disputes, penalties and stress.
Choosing well means being clear about the role and what success looks like, then selecting for both the skills and the attitude and fit, a great skillset with the wrong attitude can cost more than it adds. For a small business, where each person has a big impact, fit matters enormously.
On the legal side, every employee should have a written contract setting out terms, and from their first pay you must operate payroll correctly: deduct and remit PAYE to KRA, and handle SHIF, NSSF and the Affordable Housing Levy to their respective bodies. These are not optional, and handling them properly from day one is far easier than fixing them later.
How to hire an employee, step by step
Hire well and compliantly.
- 1
Step 1: Define the role
Be clear about what the role involves, what skills it needs, and what success looks like, before you recruit. A vague role leads to a poor hire.
- 2
Step 2: Recruit and shortlist
Advertise where suitable candidates are, and shortlist on skills and experience relevant to the role.
- 3
Step 3: Select for skill and fit
Interview for both ability and attitude and fit with your business. In a small team, the right attitude is as important as the right skills.
- 4
Step 4: Give a written contract
Provide a written employment contract setting out the role, pay, hours, and terms. This protects both you and the employee.
- 5
Step 5: Set up compliant payroll
Register the employee for payroll and handle PAYE (to KRA), and SHIF, NSSF and the Housing Levy (to their bodies) from the first payslip.
- 6
Step 6: Onboard and set expectations
Induct the new hire properly, set clear expectations, and if they handle sales or stock, give them their own system login for accountability.
Hiring mistakes
Hiring for skills, ignoring fit
A skilled person with the wrong attitude can harm a small team. Hire for both skill and fit.
No written contract
Hiring without a written contract invites disputes and leaves both sides unprotected. Always provide one.
Ignoring statutory deductions
Not handling PAYE, SHIF, NSSF and the Housing Levy from the start risks penalties. Set up compliant payroll immediately.
Vague role and expectations
Hiring without a clear role and expectations sets the employee up to fail. Define both before and at hiring.
No accountability for sales or stock
Staff who handle money or stock without their own login leave no accountability. Give them individual access.
An owner hires properly
An owner in Nairobi hired her first employee informally, no contract, cash pay, and no thought to statutory deductions, which later created compliance and trust problems.
For her next hire she did it properly: a clearly defined role, selection for skill and fit, a written contract, and payroll set up to handle PAYE, SHIF, NSSF and the Housing Levy from the first payslip. The new hire got their own system login for handling sales.
The relationship was clear and compliant from the start. Both sides knew the terms, the statutory obligations were met, and accountability was built in, avoiding the problems the informal first hire had caused.
Trading without eTIMS-compliant tax invoices risks KRA penalties, blocked VAT input claims for your customers, and receipts a business buyer cannot expense.
Veira signs every sale to KRA eTIMS automatically, so each receipt is compliant the moment it prints, with no separate device to reconcile.
How Veira handles payroll and accountability
Hiring brings payroll and accountability obligations, and Veira handles both. Its payroll calculates PAYE, SHIF, NSSF and the Housing Levy for every employee correctly, producing the figures you need to remit, so you are compliant from the first payslip.
And because each employee gets their own login, every sale, void and refund is tied to a person, giving you accountability as your team grows, all from your phone, from KES 2,999 a month.
Frequently asked questions
How do I hire employees in Kenya?
What statutory deductions must I handle for employees?
Do I need a written contract for employees?
How do I set up payroll for my first employee?
Should I hire for skills or attitude?
How do I keep new staff accountable?
Hiring well in Kenya means choosing the right person and meeting your obligations, contract, PAYE, SHIF, NSSF and the Housing Levy, from day one. Veira handles payroll and gives each hire a login for accountability, from KES 2,999 a month. See how Veira works and book a free demo.