Employment Tax

Kenya | National Social Security Fund (NSSF) changes

Summary

The National Social Security Fund (NSSF) is a mandatory co-contributory state-run pension scheme. All employers and employees are required by law to register and make monthly contributions to the scheme via payroll deductions. Employers are obligated to remit the contributions to the NSSF by the 9th of the month following the payroll month.

The detail

New Change to NSSF Act

The Third Schedule of the NSSF Act, 2013 enters its fourth year of implementation in 2026. As provided in the Act, the contributions to the NSSF are set for a 4th anniversary adjustment. This adjustment will affect both the lower and upper earnings limits.

Effective February 2026, the following revisions for the 4th year will take effect:

• Lower Limit (Tier 1) – The Tier 1 limit will increase from KES 8,000 to KES 9,000, raising the minimum contribution from KES 480 to KES 540 per month
• Upper Limit (Tier 2) – The Tier 2 limit will increase from KES 72,000 to KES 108,000 raising the maximum contribution from KES 3,840 to KES 5,940 per month

NSSF rates applicable from February 2026
	Current rates	New rates
Lower Earning Limit	8,000	9,000
Employee contribution (6% of lower Limit)	480	540
Employer contribution	480	540
Total Tier 1 contributions	960	1,080
Upper Limit	72,000	108,000
Employee contribution (6% of Upper Limit less Lower Limit)	3,840	5,940
Employer contribution	3,840	5,940
Total Tier 2 contributions	7,680	11,880
Total NSSF contributions	8,640	12,960

What is the impact of the increased contribution rates?

The increased contribution rates will have both negative and positive implications:

1. Employees earning above KES 72,000 per month will be more affected, as they will experience higher deductions compared to previous rates, resulting in reduced net take-home pay. Employees earning KES 72,000 per month and below will not experience any change.
2. The increased contribution rates will also raise employment costs for employers due to higher employer contributions.
3. Employers will experience increased compliance and administrative requirements, including the need to make payroll system adjustments to accommodate the revised contribution rates.
4. Conversely, higher contributions will translate into increased retirement savings for employees and may also support greater investment activity by the fund.

Opting out

It is worth noting that employers who have private qualifying pension schemes are restrictively at liberty to opt out of the NSSF Tier II contributions.

Employers who wish to participate in or establish a private pension scheme may apply to the NSSF board for approval to opt out of Tier II contributions

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Andrew Ondieki
Director

Kennedy Kyalo
Senior Manager

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