Nairobi, Kenya- From February 1, 2026, formally employed Kenyans will see a quiet but tangible drop in their take-home pay as higher pension limits under the NSSF Act, 2013 kick in.
The change is not a new tax, nor does it increase the contribution rate. Instead, it expands the portion of salaries subject to mandatory pension deductions as the National Social Security Fund (NSSF) enters Year Four of its long-phased reforms.
Under the law, NSSF contributions stand at six pc of pensionable earnings, split equally between the employee and employer. What matters is how much of a worker’s salary is classified as pensionable — a calculation governed by two benchmarks: the lower limit (Tier I) and the upper limit (Tier II). Both will rise in 2026.
What Changes in 2026
The lower limit will increase from Sh8,000 to Sh9,000. This tier is mandatory for all workers earning at least Sh9,000. Six pc of this amount means employees will contribute Sh540 monthly, with employers matching the same figure.
The bigger shift is in Tier II, the upper limit, which will jump from Sh72,000 to Sh108,000. This cap determines the maximum portion of a salary that can be subjected to NSSF deductions. With the higher ceiling, more income — especially for top earners — will now attract pension contributions.
Who Feels the Impact
Low- and middle-income earners will largely be unaffected. A worker earning Sh15,000 will continue contributing Sh900 monthly, while someone on Sh50,000 will still remit Sh3,000 — unchanged from current levels.
The pinch is felt higher up the pay scale. An employee earning Sh80,000 currently contributes Sh4,320, calculated at six pc of the Sh72,000 cap. From February 2026, that rises to Sh4,800, trimming Sh480 from monthly take-home pay.
For those earning Sh108,000 or more, the impact is sharper. The maximum employee contribution will increase from Sh4,320 to Sh6,480 — a Sh2,160 monthly reduction in net pay. When the employer’s matching share is added, a total of Sh12,960 will be set aside every month for retirement savings.
As Kenya moves closer to fully implementing the NSSF Act more than a decade after it was passed, the reforms are steadily raising mandatory retirement savings. For higher earners, February 2026 will bring a noticeable payslip adjustment, likely reopening debate over whether the balance between today’s affordability and tomorrow’s financial security is tipping too far.
