The National Social Security Fund Act, 2013 (No. 45 of 2013) replaced the former NSSF Act (Cap. 258) and introduced a modernized statutory framework for mandatory pension contributions in Kenya. The Act introduced:
- Updated contribution rates for employees and employers.
- A two-tier contribution structure with Tier I contributions remitted to NSSF and Tier II contributions potentially directed to approved private pension schemes.
- Phased implementation to ease transition, running from 2023 to 2027, gradually increasing contribution bases and thresholds.
Effective February 2026, contribution thresholds and rates will continue to evolve in line with the Act, subsidiary regulations, and annual notices issued by the Cabinet Secretary responsible for social security.
February 2026 Changes
From February 2026 payroll, NSSF reforms will adjust the pensionable earnings limits:
- Tier I lower earnings limit: KSh 8,000 → KSh 9,000
- Tier II upper earnings limit: KSh 72,000 → KSh 108,000
The statutory contribution rate remains 6% for employees, matched by a 6% employer contribution, bringing the total to 12%. The maximum monthly contribution per employee increases from KSh 4,320 to KSh 6,480, with a corresponding employer match.
The table below illustrates the maximum employee contributions under the current and new limits for selected gross salaries:
| Gross Monthly Salary | Current Max Contribution (2025) | New Max Contribution (Feb 2026) | Increase |
| 9,000 | 480 | 540 | +60 |
| 15,000 | 900 | 900 | Nil |
| 50,000 | 3,000 | 3,000 | Nil |
| 80,000 | 4,320 | 4,800 | +480 |
| > 108,000 | 4,320 | 6,480 | +2,160 |
In addition to the employee impact illustrated above, the table below sets out the corresponding employee (EE) and employer (ER) NSSF contributions under the revised February 2026 limits. The figures shown represent total monthly contributions based on the applicable pensionable earnings thresholds
| Gross Monthly Salary | Employee Contribution (KES) | Employer Contribution (KES) | Total Contribution(Kes) |
| 9,000 | 480 | 540 | 1,080 |
| 15,000 | 900 | 900 | 1,800 |
| 50,000 | 3,000 | 3,000 | 6,000 |
| 80,000 | 4,320 | 4,800 | 9,600 |
| > 108,000 | 6,480 | 6,480 | 12,960 |
Impact Overview
The revised contribution thresholds will primarily affect payroll costs and employee net pay:
- Employees earning above KSh 72,000 per month will experience the largest increase in deductions.
- Employees earning between KSh 9,000 and KSh 72,000 will see moderate increases.
- Employees earning below KSh 9,000 will see minimal impact.
Tier I contributions remain payable to NSSF while Tier II contributions may be directed to approved private pension schemes, subject to RBA approval.
Employer Action Points
- Update payroll systems: Ensure calculations reflect the new Tier I and Tier II limits.
- Timely remittance: Submit contributions to NSSF by the 9th of the following month to avoid penalties of 5% per month or part thereof.
- Private scheme compliance: Ensure any Tier II contributions directed to approved private schemes have met RBA requirements.
- Employee communication: Notify staff about changes to deductions and potential net pay effects.
Disclaimer:
The information provided in this article is based on the facts, assumptions, and sources available at the time of publication. We have assumed that these facts and assumptions are correct, complete, and accurate. The guidance presented reflects current law and administrative practices, as well as prevailing judicial interpretations, as of the publication date. Any changes in the facts, assumptions, law, or interpretations (including retroactive changes) may affect the relevance or accuracy of the information provided. This article does not constitute binding advice and should not be relied upon as a substitute for professional tax or legal advice. Readers are encouraged to seek professional guidance for their specific circumstances.
Contact Information
For any questions or further clarification on this topic, please feel free to contact our team: Joseph Owande at jowande@keldinellp.com or Faith Mungai at fmungai@keldinellp.com.