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In Kenya, generating a payslip typically involves a structured process that adheres to government regulations, including tax deductions, statutory contributions, and employee allowances. Here’s a step-by-step guide on how to generate a payslip:
1. Collect Employee Details
- Basic Information: Name, ID number, PIN number (Kenya Revenue Authority - KRA), job title, department, and employee number.
- Salary Information: Gross salary, any bonuses, overtime, and commissions.
2. Calculate Statutory Deductions
The main statutory deductions to include are:
- PAYE (Pay-As-You-Earn): Deduct income tax according to KRA tax bands. Use the KRA PAYE calculator or tables.
- NHIF (National Hospital Insurance Fund): Contributions are calculated based on salary brackets.
- NSSF (National Social Security Fund): Deduct the mandatory contribution from the employee.
3. Calculate Other Deductions
- Sacco contributions, loans, or any advances the employee has taken.
- Insurance premiums, if applicable.
- Union fees or pension deductions.
4. Include Allowances and Benefits
- Add any allowances (e.g., housing, transport, medical).
- Include non-monetary benefits that may have tax implications.
5. Net Salary Calculation
- The net salary is the amount after deducting taxes and other contributions from the gross salary.
6. Generate the Payslip
- You can easily generate payslips in PDF or email them directly to employees.
7. Distribute the Payslip
- Ensure employees receive their payslips by email.
With FaidiHR , generating payslips becomes effortless through its automated system that handles everything from statutory deductions to calculating gross and net pay. The platform ensures compliance with Kenyan tax laws, eliminates manual errors, and generates accurate payslips in seconds. HR professionals can focus on strategic tasks while FaidiHR takes care of the complexities, making the payslip generation process smooth and stress-free.
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