How to Set Up Leave Policies for Your Business in Kenya (2026 Guide)

If you're running a small or medium business in Kenya, getting your leave policies right isn't optional — it's the law. The Employment Act 2007 sets clear minimums for how much leave your employees are entitled to, and getting it wrong can lead to disputes, penalties, or losing good people.

The problem? Most SMB owners in Kenya are still tracking leave on paper, WhatsApp messages, or not tracking it at all. This guide walks you through every leave type you need to know, what the law actually requires, and how to set up a system that works — even if you only have 5 employees.

What the Kenya Employment Act 2007 Says About Leave

The Employment Act (Cap 226) is the primary law governing employee leave in Kenya. Here's what every employer needs to provide:

Annual Leave

Every employee is entitled to 21 working days of paid annual leave after 12 consecutive months of service with the same employer. That's roughly a full month off per year.

Key points to know:

• Leave accrues from the first day of employment, even during probation
• Employees can carry forward unused leave, but it's good practice to set a cap (many businesses allow carrying 5–10 days)
• You cannot substitute leave with cash payment while the employee is still working — leave must be taken
• If an employee resigns or is terminated, you must pay out any accrued, untaken leave

What to put in your policy: Specify your leave year (January–December or employment anniversary), how requests should be made, how far in advance employees need to apply, and your carry-forward limit.

Sick Leave

Employees are entitled to 30 days of paid sick leave per year, structured as:

• First 15 days at full pay
• Next 15 days at half pay

This kicks in after 2 consecutive months of service. The employee must provide a medical certificate from a registered medical practitioner.

What to put in your policy: Require a medical certificate for absences beyond 2 days. Specify who to notify (direct manager or HR) and by when (e.g., by 9am on the first day of absence). Clarify whether the 30 days reset on the leave year or employment anniversary.

Maternity Leave

Female employees are entitled to 3 months (90 days) of paid maternity leave. This is calendar days, not working days.

• The employee must give at least 7 days' notice (or as soon as reasonably possible)
• Maternity leave is in addition to annual leave — you cannot deduct it from their annual entitlement
• The employee has the right to return to the same job or a comparable position

What to put in your policy: Outline when maternity leave can begin (many employees start 2–4 weeks before the due date), documentation needed, and your return-to-work process.

Paternity Leave

Male employees are entitled to 2 weeks (14 days) of paid paternity leave following the birth of their child. This was a significant addition to Kenyan labour law.

What to put in your policy: Specify when paternity leave must be taken (typically within the first month of birth), and what documentation is needed (birth certificate or hospital notification).

Compassionate / Bereavement Leave

The Employment Act doesn't explicitly mandate compassionate leave, but most Kenyan employers offer 3–7 days for the death of a close family member. Given the cultural importance of funeral rites in Kenya, this is strongly recommended.

What to put in your policy: Define "close family" (spouse, children, parents, siblings, in-laws), the number of days, and whether it's paid or unpaid.

Public Holidays

Kenya observes 12 public holidays per year. If an employee works on a public holiday, they are entitled to a day off in lieu or payment at twice their normal daily rate.

The gazetted public holidays include New Year's Day, Good Friday, Easter Monday, Labour Day (1 May), Madaraka Day (1 June), Eid ul-Fitr, Eid ul-Adha, Mashujaa Day (20 October), Jamhuri Day (12 December), Christmas Day, and Boxing Day. When a public holiday falls on a Sunday, the following Monday is observed.

Common Mistakes Kenyan SMBs Make with Leave

1. Not having a written policy at all. If it's not written down, you have no defence in a dispute. Even a one-page document is better than nothing.

2. Deducting maternity leave from annual leave. This is illegal. Maternity leave is a separate entitlement.

3. Refusing leave during probation. Leave accrues from day one. You can require employees to wait before taking it, but it still accrues.

4. No tracking system. When you can't prove how many days someone has taken, disputes become "your word against theirs." A simple digital record solves this.

5. Ignoring the carry-forward problem. If you don't set a policy, employees can accumulate weeks of untaken leave and either disappear for a month or demand a large cash payout when they leave.

How to Create Your Leave Policy (Step by Step)

Step 1: Start with the legal minimums above. These are non-negotiable.

Step 2: Decide on your extras — do you offer compassionate leave? Study leave? Unpaid leave provisions?

Step 3: Write a clear request process. Who approves leave? How far in advance? In writing or is verbal okay?

Step 4: Set up tracking. Whether it's a spreadsheet or HR software, you need a record of leave taken, approved, and remaining for every employee.

Step 5: Share the policy with every employee and get written acknowledgment.

Step 6: Review annually. Laws change, your business grows, and policies need updating.

Tracking Leave Without the Headache

Many Kenyan businesses start with a shared Google Sheet or paper register. It works until you have more than 5–10 people — then leave requests get lost, balances don't update, and managers can't see who's off when.

Modern HR platforms like Cedrios come pre-configured with Kenya's exact leave types and legal minimums, so you don't need to set anything up manually. Employees can request leave from their phone, managers approve with one tap, and balances update automatically. If you're spending more than 30 minutes a week managing leave on paper, it's time to switch.