How do you tell the difference between an independent contractor and an employee in Kenya?
Kenyan courts apply a multi-factor test: who controls the method of work, whether the person is integrated into the business, whether they provide their own tools, whether they work for multiple clients, and whether the label in the contract matches the reality. The Employment Act 2007 labels are secondary to the actual working relationship.
What taxes does an independent contractor pay in Kenya?
An independent contractor pays income tax through the monthly instalment tax (MIT) system or annual self-assessment, plus VAT if turnover exceeds KES 5 million. Unlike employees, contractors are not subject to PAYE — but the engager may be required to withhold withholding tax (WHT) at 5% on professional fees paid to residents.
Is an independent contractor agreement valid internationally?
Yes. Contractor agreements are enforceable across all common law jurisdictions. Each country applies its own contractor vs. employee test — the UK IR35, Australia's sham contracting rules, and Kenya's Employment Act all examine the substance of the arrangement.