Contents
What Employees and Employers Need to Know
From 1 February 2026, new National Social Security Fund (NSSF) contribution limits come into effect in Kenya. These changes significantly increase both employee and employer contributions, with a direct impact on net pay and payroll costs. This article explains what has changed, how the new rate is calculated, and provides practical illustrations to help employees and employers prepare.
What Has Changed in February 2026
Under the revised framework, NSSF contributions are structured into two tiers, with equal contributions from employees and employers:
|
Pensionable Earnings |
Employee Contribution |
Employer Contribution |
|
|---|---|---|---|
|
Tier I base 9000 |
6.00% |
6.00% |
|
|
Tier II Earning Limit 108,000 |
6.00% |
6.00% |
How the New NSSF Contribution Is Calculated
The calculation follows a tiered approach, not a flat rate.
Step 1: Identify Pensionable Pay
Determine the employeeโs gross monthly salary (up to the pensionable limit of KSh 108,000).
Step 2: Apply the Correct Tier: For someone earning Kshs 108,000 and above
-
Tier I: First KSh 9,000
Employer: 6% * 9000= 540
Employee 6%*9000=540
-
Tier II: Remaining amount up to KSh 108,000
Employer: 6% * (108,000 – 9000)= 5,940
Employee 6% * (108,000 – 9000)= 5,940
-
Total NSSF to be paid
Tier I: 540 + 540= 1,080
Tier II: 5,040 + 5,940= 11,880
Total NSSF Paid = 12,960
NB: If your earning is 108,000 and above, your
- Employer Contribution: 6,480
- Employee Contribution: 6,480
Example for someone earning Kshs 50,000
-
Tier I: First KSh 9,000
Employer: 6% * 9,000= 540
Employee 6%*9,000=540
-
Tier II: Remaining amount up to KSh 108,000
Employer: 6% * (50,000 – 9,000)= 2,460
Employee 6% * (50,000 – 9,000)= 2,460
-
Total NSSF to be paid
Tier I: 540 + 540= 1,080
Tier II: 2,460 + 2,460 = 4,920
Total NSSF Paid = 6,000
NB: If your earning is 50,000
- Employer Contribution: 3,000
- Employee Contribution: 3,000
Conclusion
The new NSSF rates mark one of the most significant increases in statutory deductions in recent years. While they raise short-term payroll and living costs, they are designed to strengthen retirement security. Early understanding and preparation will help both employers and employees navigate the transition smoothly.
Betty is a qualified teacher with a Bachelor of Education (Arts). In addition, she is a registered Certified Public Accountant. She has been teaching and offering part-time accounting services for the last 10 years. She is passionate about education, accounting, writing, and traveling.