How many hours is a casual worker entitled to in Kenya?

Casual work in Kenya is generally intended for short-term, daily, or task-based engagements rather than continuous or long-term employment. Specific working conditions may depend on the nature of the engagement and applicable labour laws.

Difference Between Employee and Casual Worker in Kenya (2026 Guide)

Q: Do casual workers pay tax in Kenya?

Casual workers may not always be subject to PAYE at the beginning of engagement. However, if the engagement becomes continuous or meets the legal employment thresholds under Kenyan law, the worker may be treated as an employee and become subject to PAYE and other statutory deductions.

Q: Can a casual worker become an employee in Kenya?

Yes. Under Kenyan labour law, a casual worker may be deemed an employee if they work continuously or meet the legal conversion thresholds provided under the Employment Act. Once converted, the worker becomes entitled to employee rights and payroll obligations.

May 7, 2026

Estimated read time: 4 minutes

If you run an NGO or SME in Kenya, you need to clearly understand the Difference between Employee and Casual Worker in Kenya before you hire anyone.

In simple terms:

An employee in Kenya works under a formal contract and is paid monthly through payroll, while a casual worker is hired for short-term or daily tasks and paid per day or task.

Because how you classify your workers directly affects:

Your payroll obligations
Your tax deductions (PAYE vs no PAYE)
Your compliance with KRA and labour laws

If you get it wrong, you could face penalties, backdated PAYE, and tax audits by KRA.

This simple guide by Bubi Alexander will help you understand the difference, classify your workers correctly, and avoid costly payroll mistakes.

Let’s jump in!!

Table of Contents:

What is the difference between Employee and Casual Worker in Kenya?
Who is an Employee in Kenya?
How is an Employee Taxed in Kenya?
Who is a Casual Worker in Kenya?
Is a Casual Worker an Employee in Kenya?
Types of Employment Contracts in Kenya
Why Getting This Wrong Can Cost You
Recommended Articles
Payroll Outsourcing in Kenya with Bubi Alexander
FAQs
Conclusion

What is the Difference Between Employee and Casual Worker in Kenya?

The easiest way to understand the Difference Between Employee and Casual Worker in Kenya is to look at the nature of the work, the level of control, and how the worker is paid.

If you control how, when, and where someone works — they are likely an Employee
If someone is hired for short-term, seasonal, or daily tasks and paid per day or task — they are likely a Casual Worker

In simple terms:

An employee works as part of your organisation under a structured employment arrangement, while a casual worker is hired only when needed for temporary work.

Confused about whether your workers are employees or casual workers in Kenya?

Bubi Alexander can help you structure your payroll correctly and stay fully compliant with KRA.

Book a Free Consultation with Bubi Alexander Today WhatsApp

Who is an Employee in Kenya?

An employee in Kenya is someone who works for your organisation under your direction, supervision, and control.

When you hire an employee:

You determine their working hours and responsibilities
You supervise and manage their work
They form part of your internal team
They are usually paid a monthly salary through payroll
They depend on your organisation as their primary source of income

In most cases, employees are engaged under formal types of employment contracts in Kenya such as:

Permanent contracts
Fixed-term contracts
Probation contracts

If someone is classified as an employee, you are responsible for handling payroll, PAYE, and other statutory deductions on their behalf.

How is an Employee Taxed in Kenya?

If you are running an NGO or SME in Kenya, understanding how an employee is taxed is very important for your payroll compliance.

When you hire an employee, you are responsible for processing payroll and deducting statutory deductions every month before paying salary.

This system is called PAYE (Pay As You Earn).

As the employer, you deduct and remit the following:

Deduction	Rate	What It Means	Who Pays It
PAYE (Income Tax)	10% – 35% (progressive)	– Tax based on salary level	Employee (you deduct & remit)
NSSF (Pension)	6% of gross salary (shared contribution structure)	– Retirement savings	Employer + Employee
SHIF (Health Insurance)	Approx. 2.75% of gross salary	– Medical cover	Employee (deducted by employer)
Affordable Housing Levy (AHL)	1.5% of gross salary	– Housing fund contribution	Employer + Employee

N:B:

Once you deduct these amounts, you remit them directly to KRA and the relevant statutory bodies on behalf of your employee.

Who is a Casual Worker in Kenya?

Under the Employment Act, 2007, a casual worker in Kenya is someone hired for short-term, temporary, or task-based work and paid at the end of the day.

This is common in:

Construction
Agriculture
Cleaning services
Security and loading work
Seasonal or project-based labour

Key characteristics of a casual worker:

Paid daily or per task
Hired for short-term labour needs
Flexible or irregular engagement
Limited employment benefits at the start

However, NGOs and SMEs in Kenya should be careful.

Under Section 37 of the Employment Act, if a casual worker works continuously for more than one month or performs ongoing work, the law may automatically treat them as a regular employee with full employment rights.

In simple terms:

A casual worker is meant for temporary work — not permanent roles

Not sure if you are classifying employees and casual workers correctly in your organisation?

We help NGOs and SMEs simplify payroll and avoid costly tax and labour mistakes.

Book a Free Consultation with Bubi Alexander Today WhatsApp

Is a Casual Worker Considered an Employee in Kenya?

This is a key question when understanding the Difference between Employee and Casual Worker in Kenya, especially for NGOs and SMEs managing payroll and compliance.

Not always at the start – but the law may convert them automatically depending on how they work.

Under Section 37 of the Employment Act, 2007, a casual worker is treated as an employee if:

They work continuously for one month or more, or
They perform work that cannot reasonably be completed within three months or more

What this means for you as an employer:

Once this happens:

The casual worker is treated as a monthly employee
They move into formal payroll (PAYE applies)
They become entitled to employment protections under the Act
Their working days may include paid rest days and public holidays when calculating continuity
They may qualify for full employment terms if engagement continues

Important for SMEs and NGOs in Kenya:

If a casual worker continues working beyond these thresholds, the law allows them to claim full employee rights, including proper terms of service and legal protection.

Key takeaway:

Labelling someone as “casual” does not determine their status — the duration and nature of work

Types of Employment Contracts in Kenya

To properly manage the Difference between Employee and Casual Worker in Kenya, every SME or NGO must ensure that all workers are covered under clear employment contracts.

This is not just best practice—it is a key requirement under Kenyan labour laws for compliance, payroll accuracy, and dispute prevention.

Type of Contract	What It Means
Permanent Contract	Long-term employment with no fixed end date, used for core roles and includes full payroll processing and statutory benefits.
Fixed-term Contract	Employment for a specific period or project, commonly used in NGOs and donor-funded programs, ending automatically when the term expires.
Probation Contract	A short-term assessment period used to evaluate new employees before confirming them into formal employment.
Casual Contract	Short-term or daily work arrangement for temporary tasks, typically paid per day or task under casual labour rules.

As an SME or NGO in Kenya, you must ensure every worker—whether employee or casual— is engaged under a clear written contract.

Why Getting This Wrong Can Cost You

Misclassifying workers is one of the most expensive payroll mistakes when dealing with the Difference between Employee and Casual Worker in Kenya, especially for SMEs and NGOs.

If you get it wrong:

KRA can trigger audits and issue backdated PAYE assessments, sometimes going several years back
You may be required to pay tax arrears, penalties, and interest on unpaid statutory deductions
Your organisation may be flagged for a full tax compliance audit
Workers may take legal action over their employment status and benefits

Kenyan courts have repeatedly reinforced this principle. In cases such as Kenyatta University v Esther Njeri Maina, the court held that long-serving “casual” workers may legally be treated as permanent employees, entitling them to full employment rights, benefits, and protections under the Employment Act.

Important takeaway

Calling someone a “casual worker” does not protect your organisation. The actual working relationship determines liability.
Always classify workers correctly from the start to avoid payroll disputes, KRA exposure, and costly legal challenges.

Recommended Articles

Payroll Outsourcing in Kenya with Bubi Alexander

Managing payroll, taxes, and compliance can quickly become overwhelming—especially for NGOs and growing SMEs dealing with the Difference between Employee and Casual Worker in Kenya.

This is where Payroll outsourcing in Kenya becomes essential.

When you outsource payroll, you:

Classify employees and casual workers correctly
Run accurate monthly payroll
Handle PAYE, NSSF, SHIF, and Housing Levy deductions
Stay fully compliant with KRA requirements
Reduce the risk of penalties, audits, and backdated taxes

This allows your organisation to stay compliant while you focus on growth.

At Bubi Alexander, we support NGOs and SMEs by:

Structuring payroll correctly from the start
Properly classifying employees vs casual workers
Managing PAYE and statutory deductions
Ensuring full KRA compliance
Minimising payroll risks and costly errors

We help you get payroll right the first time and avoid compliance mistakes.

Request your Free Quote Today!!

FAQs

1. Do casual workers pay tax in Kenya?

Not always at the start. However, if a casual worker works continuously or beyond the casual threshold under Kenyan law, they may be treated as an employee and become subject to PAYE and statutory deductions.

2. How many hours is a casual worker entitled to?

Casual work is typically short-term, daily, or task-based. It is not designed for continuous or full-time engagement and is meant for temporary labour needs.

3. Can a casual worker become an employee in Kenya?

Yes. Under Kenyan labour law, if a casual worker works continuously or meets the legal conversion thresholds (under Section 37 of Employment Act CAP 226) , they are automatically treated as an employee with full employment rights and payroll obligations.

Conclusion

Understanding the Difference between Employee and Casual Worker in Kenya is essential for keeping your NGO or SME compliant, avoiding KRA penalties, and managing your workforce correctly.

When you classify workers properly, you protect your organisation from payroll errors, tax disputes, and potential labour claims.

If you are an NGO or SME in Kenya, getting this right is not optional—it is a core part of payroll compliance and risk management.

When in doubt, always structure your payroll correctly or outsource it to professionals like Bubi Alexander to ensure full compliance and peace of mind.

Would you like us to assist you with:

Classifying your employees and casual workers correctly in Kenya?

Click the WhatsApp button to book your free consultation with Bubi Alexander now

Or call us at 0736 570 370

Disclaimer

This article is for general informational purposes only and does not constitute legal or tax advice. For specific guidance, please consult a qualified professional or payroll expert.

Sources