1. What is Basic Salary?

Basic Salary is the core compensation received by an employee, excluding bonuses, allowances, or other benefits. In Kenya, it typically constitutes 50-60% of the gross salary and forms the basis for various deductions and benefits calculations.

2. How Does the Calculator Work?

The calculator uses the basic salary formula:

Where:

• Gross Salary — Total annual compensation before deductions (KES)
• Basic Pay Percentage — Typically 0.5 to 0.6 (50-60%) in Kenya

Explanation: The calculation determines the fixed portion of compensation that forms the basis for statutory deductions like PAYE, NSSF, and NHIF.

3. Importance of Basic Salary Calculation

Details: Accurate basic salary calculation is crucial for determining tax liabilities, pension contributions, loan eligibility, and other employment benefits in Kenya's payroll system.

4. Using the Calculator

Tips: Enter gross salary in KES (annual amount) and the basic pay percentage as a decimal (e.g., 0.5 for 50%). All values must be valid (salary > 0, percentage between 0.01-1).

5. Frequently Asked Questions (FAQ)

Q1: What's the typical basic pay percentage in Kenya?
A: Most Kenyan employers set basic salary between 50-60% of gross salary, with the remainder as allowances.

Q2: Why is basic salary important for employees?
A: It determines statutory deductions (PAYE, NSSF), affects loan qualifications, and forms the basis for retirement benefits.

Q3: Can basic salary be less than 50% of gross?
A: While possible, Kenyan labor laws require that basic salary be reasonable and not structured to avoid statutory deductions.

Q4: How does basic salary affect housing levy?
A: Kenya's housing levy (1.5%) is calculated on gross salary, not basic salary.

Q5: Is overtime calculated on basic salary?
A: Yes, overtime pay rates are typically calculated as a multiple of the basic hourly rate.