NAIROBI, Kenya – The Federation of Kenya Employers (FKE) has called on businesses to adjust their payrolls ahead of the February rollout of higher National Social Security Fund (NSSF) deductions.
In a statement, FKE Chief Executive Officer Jacqueline Mugo reminded employers that the third phase of implementing the NSSF Act 2013 is legally binding and non-compliance could attract penalties.
“These changes will take effect immediately, starting with the NSSF computations for February 2025 and subsequent periods,” Mugo said on Friday.
The latest adjustment marks the final phase of a staggered increase in contributions aimed at boosting retirement savings for Kenyan workers.
Under the new structure, the Lower Earnings Limit will rise to Sh8,000, while the Upper Earnings Limit will jump to Sh72,000.
This follows earlier increments in 2023 and 2024, which gradually raised the contribution thresholds.
While supporting the long-term goal of improved retirement benefits, FKE has acknowledged concerns over the growing strain on employees’ paychecks due to multiple statutory deductions.
“We support the NSSF increase because many Kenyans retire without adequate savings, as their pensions were previously too low. However, we are raising concerns about the overall burden of payroll deductions—it has become too high,” Mugo noted.
The Central Organisation of Trade Unions (COTU) has, however, defended the revised rates, arguing they align with global best practices.
COTU Secretary-General Francis Atwoli emphasized that stronger pension savings will ensure retirees can maintain a decent standard of living.
