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How to Pay Contractors in Kenya: Complete 2025 Guide

For businesses paying independent contractors in Kenya

Quick Summary

Best payment methods for Kenyan contractors:

  1. Wise (lowest fees, best rates)
  2. Payoneer (very popular in Kenya)
  3. PayPal (widely accepted)
  4. M-Pesa (for local payments)

Key requirements:

  • KRA PIN (Kenyan tax ID)
  • Written service agreement
  • Currency considerations (USD preferred over KES)
  • KRA tax compliance (contractor's responsibility)
  • Foreign exchange regulations

Why This Guide Is Different

Kenya has a thriving tech ecosystem (Silicon Savannah) and growing freelance workforce. If you're hiring contractors in Kenya, you need to understand:

  • Payment method preferences (Wise, Payoneer, and PayPal all work)
  • M-Pesa integration (popular mobile money platform)
  • Currency considerations (USD preferred over KES)
  • KRA PIN requirements (Kenyan tax identification)
  • Tax compliance and withholding rules
  • Time zone advantages (EAT is UTC+3)

Payment Methods Compared

MethodCostSpeedBest For
Wise$3-$101-3 daysRegular payments, best exchange rates
Payoneer$5-$121-3 daysVery popular with Kenyan freelancers
PayPal$5-$15InstantWidely accepted, instant transfers
M-PesaVariesInstantLocal payments, mobile money

Recommended: Wise or Payoneer

Why Wise and Payoneer work best for Kenya:

  • Both widely accepted by Kenyan contractors
  • Lower fees than traditional bank transfers
  • Reliable and established in Kenya
  • Can withdraw to local bank accounts or M-Pesa
  • Better exchange rates than banks

Currency Considerations

Most Kenyan contractors prefer USD over KES for stability and international purchasing power.

USD vs KES

Pay in USD (recommended):

  • Most contractors prefer USD for stability
  • Better exchange rates through Wise/Payoneer
  • Easier for international transactions
  • Protects against KES fluctuations
  • Preferred by tech workers and freelancers

Pay in KES only if:

  • Contractor specifically requests KES
  • You have KES operations in Kenya
  • Using M-Pesa for local payments

Pro tip: Most Kenyan tech contractors prefer USD. Always confirm currency preference before setting up payments.

Tax and Compliance Requirements

KRA PIN (Tax ID)

KRA PIN is Kenya's tax identification number issued by the Kenya Revenue Authority.

  • Required for: All contractors providing services
  • Your responsibility: Verify contractor has valid KRA PIN
  • Contractor's responsibility: Register with KRA and maintain PIN

Your Responsibilities (as the client)

  • Verify KRA PIN: Ensure contractor has valid tax ID
  • Written agreement: Have clear service contract
  • Payment records: Keep documentation of all payments
  • No withholding: You don't withhold Kenyan taxes (contractor handles this)

Important: As a foreign company paying a Kenyan contractor, you typically don't have tax withholding obligations in Kenya. The contractor handles their own KRA tax compliance. Consult with a tax professional for your specific situation.

Why Kenya for Outsourcing?

  • Silicon Savannah: Thriving tech ecosystem in Nairobi
  • Strong English: English is an official language
  • Competitive rates: 50-70% lower than US/EU
  • Good time zone: EAT (UTC+3) overlaps with EU and has some US overlap
  • Mobile innovation: World leader in mobile money (M-Pesa)
  • Growing talent pool: Expanding tech education and training

Tools for Managing Kenyan Contractors

Kontrable is built specifically for managing international contractors:

  • Track payments across Wise, Payoneer, PayPal, and other methods
  • Store contracts and invoices
  • Handle multiple currencies (USD, KES, EUR, etc.)
  • Generate payment reports for accounting
  • No per-contractor fees (unlike Deel at $49/month per contractor)
Join Kontrable Waitlist

Frequently Asked Questions

Q: Should I pay Kenyan contractors in USD or KES?

A: Most Kenyan contractors prefer USD for stability. Always confirm with your contractor.

Q: What's the best payment method for Kenya?

A: Wise and Payoneer are both excellent choices. Wise typically has lower fees ($3-$10), while Payoneer is very popular among Kenyan freelancers. Both can withdraw to M-Pesa.

Q: Do I need an EOR platform for Kenyan contractors?

A: No. EOR is for employees. Kenyan contractors handle their own KRA tax compliance. You just need a good payment method (Wise/Payoneer) and contractor management tool (Kontrable).

Q: Can I use M-Pesa to pay contractors?

A: M-Pesa is great for local KES payments. For international payments in USD, use Wise or Payoneer, which contractors can then withdraw to M-Pesa if they prefer.

Get Started

Managing Kenyan contractors?

  1. Verify contractor has valid KRA PIN
  2. Set up Wise or Payoneer business account
  3. Create written service agreement
  4. Confirm currency preference (usually USD)
  5. Get contractor's payment details
  6. Set up regular payment schedule

Want to automate this?

Kontrable launches January 2026 with contractor management tools built for international teams.

Join the Waitlist →

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