Your Boss Owes You This Much If You're Fired — Check the Calculator

When your employment ends in Kenya, whether through retrenchment, dismissal, or contract expiry, your employer owes you money. The amount depends on how long you worked there, your final salary, and the reason for termination. Most workers get this calculation wrong — or don't claim it at all.

The Employment Act sets out clear rules about what constitutes fair compensation when employment ends. The calculation involves three main components: notice pay, severance allowance, and accrued leave days. For many Kenyans, this adds up to several months' salary that rightfully belongs to them.

What You're Entitled To

Your terminal dues comprise notice pay (unless you were dismissed for gross misconduct), severance allowance, and payment for unused annual leave. The severance formula is straightforward: half a month's basic salary for each year of service, capped at 15 months' pay. So if you earned KSh 50,000 monthly and worked for four years, your severance would be KSh 100,000 before taxes.

Notice pay depends on your contract. Most employees get one month's notice or one month's pay in lieu. Senior positions sometimes contractually require three months. If your employer fails to give proper notice, they must pay you instead.

Any unused annual leave must be paid out at your normal rate of pay. If you had 18 days remaining and earned KSh 50,000 monthly, that's roughly KSh 30,000 owed to you.

How to Calculate and Claim

Use the redundancy and terminal dues calculator to get an accurate figure based on your specific situation. Input your basic salary, total service years, and notice period. The tool handles tax calculations automatically — terminal dues are taxable income in Kenya, which many people don't realize.

Once you have your figure, request a written calculation from your employer's HR department. They're legally required to provide this breakdown. If they refuse or the numbers don't match the Employment Act requirements, contact the employment law experts on Kaziiko who can review your case and advise on next steps.

If your employer disputes the amount or fails to pay within 30 days of termination, you have grounds to file a complaint with the Employment and Labour Relations Court. This process is costly and slow, so most workers pursue it only when substantial sums are involved.

Payment method varies. Some employers transfer via M-Pesa or bank account; others issue cheques. Request bank transfer if possible — it creates a clear payment record.

The tax treatment matters. Terminal dues are added to your income for that tax year and taxed accordingly. This can bump you into a higher bracket, so use the net salary calculator to see what you'll actually receive after KRA deductions.

One persistent problem: employers sometimes claim they'll pay "later" or offer a lower amount as a "settlement." This is a negotiating tactic, not a legal option. You're entitled to the full amount by law. If your employer faces financial difficulty, that's their problem, not yours — though recovery becomes harder if the company collapses.

Keep all employment documents: your contract, payslips, letters of termination, and any written communication about severance. These protect you if disputes arise later.

Frequently Asked Questions

What if I was fired for misconduct?

Gross misconduct (theft, violence, serious insubordination) can mean forfeiture of notice pay, but you still receive severance allowance and accrued leave. Ordinary dismissals require full payment. The distinction matters — find a verified Kenyan expert on Kaziiko if your employer claims gross misconduct applied to you.

Does part-time work count toward service years?

Yes. Any formal employment period counts, whether full-time, part-time, or contract-based. If you worked three years part-time and two years full-time, your total service is five years for severance calculation purposes.

Can my employer reduce what I'm owed?

No. The Employment Act sets minimum standards; employers cannot legally pay less. They can pay more if your contract specifies better terms. Any settlement agreement that underpays statutory entitlements is unenforceable.

How long do I have to claim this money?

You should claim immediately upon termination. If your employer delays, the debt accumulates with interest. Legally, you have up to three years to pursue a claim through the courts, though proving timely notification becomes harder after several months have passed.