Kenya – NSSF Increases Contributions Rates
Thursday, February 6 2025 2:52 pm
By Adapted from Tuko News Follow on LinkedIn
NSSF will adjust the upper-income limit and lower-income limit from KSh 36,000 to KSh 72,000 and KSh 7,000 to KSh 8,000, respectively.
Kenyans earning KSh 50,000 monthly will contribute KSh 3,000 up from KSh 2,160, while employees taking home KSh 72,000 and will have KSh 4,320 deducted, up from from KSh 2,160. Kenyans’ contribution rates to the National Social Security Fund (NSSF) are set to increase following the implementation of another phase of the rates. The new rates, which will be implemented in February 2025, will trim employees’ pay by up to KSh 1,512.
NSSF will adjust the upper- and lower-income limits from KSh 36,000 to KSh 72,000 and KSh 7,000 to KSh 8,000, respectively. According to the NSSF, Act 2013, the minimum contribution will rise from KSh 420 to KSh 480, while the highest deduction will increase from KSh 2,160 to KSh 3,840. “The lower limit earnings for the third year of implementation of the NSSF Act of 2013 will be KSh 8,000, while the upper earning limit will be two times the national average (KSh 72,000),” the Act states.
How new NSSF rates will affect payslips
Kenyans earning KSh 50,000 monthly will pay KSh 3,000, up from KSh 2,160. Business Daily reported that employees taking home KSh 72,000 and above will have KSh 4,320 deducted, up from KSh 2,160. Employers will be expected to match employee contributions, increasing the cost of doing business in Kenya.
“An employer shall pay the contribution under subsection (1) on the ninth day of each month or on such later date as the board may, in consultation with the Cabinet secretary, prescribe,” the NSSF Act, 2013, explains.
How NSSF rates rose
The National Social Security Fund (NSSF) issued a directive to employers to implement new deductions following a landmark ruling by the Supreme Court. The Court of Appeal overturned the Employment and Labor Relations Court’s (ELRC) decision that had declared the National Social Security Act, 2013 (NSSF Act) unconstitutional. The NSSF Act had proposed increasing social security contributions from a fixed KES 400 (split equally between employee and employer) to 12% of an employee’s monthly earnings, applied on a graduated scale. Employees earning KES 18,000 or more would have seen their contributions rise to KES 2,160.
