Career advice · Updated October 2026

Terminal Dues in Kenya: What Your Employer Owes You When a Job Ends

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When a job ends, whether you resign, are dismissed or are declared redundant, you are usually owed money. Terminal dues in Kenya are governed mainly by the Employment Act, 2007, plus your contract and any collective bargaining agreement (CBA). This guide explains each item and how to estimate the total with our terminal dues calculator.

What terminal dues include

• Salary for days worked but not yet paid.
• Pay in lieu of notice, if notice is not given or worked.
• Payment for untaken annual leave.
• Severance pay, in a redundancy.
• Any contractual benefits: gratuity, bonus, pension or provident fund benefits.
• Overtime and allowances owed.

1. Notice and pay in lieu of notice

Section 35 of the Employment Act sets minimum notice periods unless your contract gives more:

• Paid daily: notice at the end of the day.
• Paid weekly or fortnightly: one week or two weeks.
• Paid monthly or longer: 28 days.

Section 36 allows either party to end the contract by paying the other the salary for the notice period instead of giving notice. If your employer asks you to leave immediately, you are owed pay in lieu of notice unless you were lawfully summarily dismissed for gross misconduct. If you resign without serving notice, your employer may deduct pay in lieu from your dues, depending on your contract.

2. Untaken annual leave

Section 28 gives employees at least 21 working days of paid annual leave after every twelve consecutive months of service. Leave you have earned but not taken should be paid when you leave. Employers commonly calculate a daily rate by dividing monthly basic pay by 26 working days or 30 calendar days, depending on the contract or policy. Our calculator lets you choose.

3. Severance pay for redundancy

Section 40 sets the conditions for a lawful redundancy, including notice to you (or your union) and the local labour officer at least one month before, fair selection criteria and payment of dues. Severance pay must be at least 15 days’ pay for each completed year of service. For example, someone with a monthly basic salary of KSh 60,000 and four completed years would receive at least 4 × 15 × (60,000 ÷ 30) = KSh 120,000 in severance, using a 30-day month.

Severance applies to redundancy, not to resignation or dismissal for misconduct.

4. Unpaid salary, overtime and allowances

You are owed salary up to your last working day and any overtime earned. Check overtime with our overtime calculator.

5. Pension and NSSF

NSSF contributions remain in your account and are claimed under NSSF rules, not paid by your employer. Business Radar explains when NSSF benefits can be claimed. Benefits from an employer pension or provident scheme follow the scheme rules.

6. Certificate of service

Section 51 requires your employer to issue a certificate of service when the contract ends, showing your name, employer, dates and job description. It does not have to include a reference.

Are terminal dues taxed?

Generally yes. Notice pay, leave pay and severance pay are employment income, so PAYE applies. Some pension lump sums have separate tax rules. Expect your net amount to be lower than the gross figure and use the net salary calculator as a guide.

When must dues be paid?

The Act requires wages and dues to be paid on termination, and redundancy dues to be part of the process. In practice, ask HR for a written computation of your dues and the payment date. Clearing processes, such as returning laptops and ID cards, should not be used to delay lawful payments indefinitely.

What if your employer does not pay?

1. Ask HR in writing for a breakdown of your dues.
2. Keep your contract, payslips, leave records and termination letter.
3. Contact your union if you are a member.
4. Report to the county labour office, where a labour officer can mediate.
5. File a claim at the Employment and Labour Relations Court. Claims based on employment contracts have time limits, so do not wait.

For anything complex, such as alleged unfair termination, speak to an employment lawyer or a legal aid clinic.

Example estimate

For a monthly basic salary of KSh 60,000, 30 days’ notice not worked, 10 untaken leave days (26-day divisor) and four years’ service in a redundancy: notice KSh 60,000, leave about KSh 23,077 and severance KSh 120,000, totalling about KSh 203,077 before tax. Try your own figures in the calculator.

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Resigning the right way

If you resign, give notice in writing as your contract requires, keep a copy, and ask for a handover plan. Request your leave balance in writing before your last day so the figure is agreed. Return company property and get a signed clearance form. Ask for your certificate of service and, if you want one, a separate reference letter. A clean exit protects your dues and your references.

Key takeaways

• Terminal dues usually include unpaid salary, notice pay, leave pay and contractual benefits.
• Severance pay of at least 15 days per completed year applies to redundancy.
• Ask for a written computation and keep all your records.
• Labour officers and the Employment and Labour Relations Court can help if dues are not paid.

Frequently asked questions

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