NAIROBI, Kenya — Monthly deductions under the National Social Security Fund (NSSF) have increased to a maximum of Sh12,960 per employee following the implementation of Year 4 contribution rates under the NSSF Act (Cap 258).
In a notice to employers, the Fund said the revised structure took effect in February 2026 as part of the phased rollout outlined in the Third Schedule of the Act.
“The implementation of the NSSF Act is progressively being done in phases. As you are aware, according to the Third Schedule of the NSSF Act, Cap 258, the implementation of Year 3 contribution rates ended on 31 January 2026.
Implementation of Year 4 contribution rates comes into effect in February 2026. Consequently, all Employers are hereby notified to make the deductions and pay Year 4 contributions as indicated,” the notice stated.
Under the revised structure, contributions remain split into two tiers.
For Tier 1, which covers the Lower Earnings Limit, employees earning Sh9,000 per month will contribute Sh540, with employers matching the amount. The total Tier 1 contribution per employee therefore stands at Sh1,080.
Under Tier 2, which applies to the Upper Earnings Limit of Sh108,000 per month, employees will contribute Sh5,940, matched equally by employers. This brings the total Tier 2 contribution to Sh11,880.
Combined, the maximum total monthly NSSF contribution per employee will now be Sh12,960, shared equally between employer and employee.
The increase marks another step in the transition from the old flat-rate contribution model to income-based contributions aimed at boosting retirement savings and expanding social protection coverage.
At its 8th Annual General Meeting, the Fund also announced a 17pc net interest rate for the 2024/2025 financial year, positioning the enhanced contributions as beneficial for long-term returns to members.
David Koross, NSSF Managing Trustee and CEO, urged compliance with remittance timelines.
“Employers are also reminded that remittances to NSSF should be made by the 9th day of each subsequent month. Members are encouraged to continue saving with NSSF for enhanced benefits,” Koross said.
Under the Act, late remittances attract penalties, reinforcing the Fund’s push for strict enforcement.
The NSSF reforms aim to strengthen retirement security, disability protection, and survivor benefits for Kenyan workers and their dependents.
However, the rising deductions may increase payroll costs for employers and reduce net pay for some workers, particularly those earning at the upper limit.
As Kenya deepens social security reforms, attention now turns to compliance levels and the Fund’s capacity to manage and invest the growing pool of contributions sustainably.
