New NSSF Contribution Rates 2026 Kenya: Complete Guide for Employees and Employers
- Muhoro & Gitonga Associates
- Feb 12
- 10 min read
Table of Contents
Overview of the New NSSF Contribution Rates 2026
Legal Framework Governing NSSF Contributions in Kenya
Understanding the Two-Tier NSSF Contribution System
New NSSF Contribution Rates Effective February 2026
How the New Rates Affect Employee Take-Home Pay
Employer Obligations Under the New NSSF Regulations
NSSF Remittance Deadlines and Procedures
Penalties for Non-Compliance with NSSF Contribution Requirements
Contracting Out Options for Tier II Contributions
How to Verify Your Employer is Remitting NSSF Correctly
Legal Remedies When Employers Fail to Remit NSSF
1. Overview of the New NSSF Contribution Rates 2026
The National Social Security Fund (NSSF) has implemented Year 4 contribution rates effective February 1, 2026. These new rates represent a significant increase in mandatory pension contributions for both employees and employers across Kenya.
The maximum monthly NSSF contribution has doubled from KSh 2,160 (Year 3 rates) to KSh 4,320 per person, bringing the total employer-employee contribution to KSh 8,640 per month for employees earning KSh 108,000 or more.
This change directly impacts millions of Kenyan workers in formal employment and places new compliance obligations on employers. Understanding these new rates is essential for payroll management, tax planning, and ensuring legal compliance.
2. Legal Framework Governing NSSF Contributions in Kenya
The new NSSF contribution rates are anchored in several key pieces of legislation:
The National Social Security Fund Act, 2013 establishes the legal framework for mandatory pension contributions in Kenya. This Act replaced the old NSSF Act Cap 258 and introduced the two-tier contribution system.
The NSSF (Amendment) Regulations, 2023 provide the specific contribution rates and implementation timelines. These regulations outline the phased approach to reaching full contribution levels.
The Employment Act, 2007 requires employers to remit statutory deductions, including NSSF contributions, on behalf of their employees.
The Finance Act, 2023 and subsequent amendments have upheld the constitutional validity of increased NSSF contributions following court challenges.
All employers and employees in Kenya are bound by these statutory provisions, making NSSF contributions a mandatory legal obligation rather than a voluntary benefit.
3. Understanding the Two-Tier NSSF Contribution System
Kenya's NSSF operates on a two-tier structure designed to provide both basic and supplementary pension benefits.
Tier I (Lower Earnings Limit) covers the first KSh 7,000 of pensionable earnings. This tier is mandatory for all employees and cannot be contracted out. The contribution rate is 6% of pensionable earnings, split equally between employer and employee at 3% each.
Tier II (Upper Earnings Limit) covers pensionable earnings from KSh 7,001 to KSh 36,000. This tier is also mandatory unless the employer has contracted out by providing an alternative pension scheme. The contribution rate is 6% of pensionable earnings within this band, split equally at 3% each.
The combined maximum pensionable earnings under both tiers is KSh 36,000 per month. Any earnings above this threshold are not subject to NSSF contributions.
4. New NSSF Contribution Rates Effective February 2026
The Year 4 rates that took effect on February 1, 2026 represent 100% of the statutorily prescribed contributions under the NSSF Act.
Tier I Contributions:
Employee contribution: 3% of the first KSh 7,000 = KSh 210
Employer contribution: 3% of the first KSh 7,000 = KSh 210
Total Tier I: KSh 420 per month
Tier II Contributions:
Employee contribution: 3% of earnings between KSh 7,001 and KSh 36,000 = up to KSh 870
Employer contribution: 3% of earnings between KSh 7,001 and KSh 36,000 = up to KSh 870
Total Tier II (maximum): KSh 1,740 per month
Maximum Total Monthly Contribution: For employees earning KSh 36,000 or more:
Employee pays: KSh 1,080 (KSh 210 + KSh 870)
Employer pays: KSh 1,080 (KSh 210 + KSh 870)
Combined total: KSh 2,160 per month
These rates replace the Year 3 rates which were set at 50% of the full statutory contribution.
5. How the New Rates Affect Employee Take-Home Pay
The new NSSF rates will reduce monthly take-home pay for all employees in formal employment. The impact varies based on salary level.
For employees earning KSh 7,000 or less: Monthly NSSF deduction increases from KSh 105 to KSh 210. Annual impact: KSh 1,260 less in take-home pay.
For employees earning KSh 20,000: Monthly NSSF deduction increases from KSh 495 to KSh 990. Annual impact: KSh 5,940 less in take-home pay.
For employees earning KSh 50,000: Monthly NSSF deduction increases from KSh 1,080 to KSh 2,160. Annual impact: KSh 12,960 less in take-home pay.
For employees earning KSh 100,000 or more: Monthly NSSF deduction remains capped at KSh 2,160 (no change from previous month as earnings exceed the ceiling).
However, employees should note that NSSF contributions are tax-deductible. The contributions reduce your taxable income, which may lower your PAYE (Pay As You Earn) tax burden slightly.
6. Employer Obligations Under the New NSSF Regulations
Employers in Kenya have several mandatory obligations regarding NSSF contributions:
Registration Requirements: All employers must register with NSSF within 30 days of employing their first worker. This applies to businesses of all sizes, including those with only one employee.
Deduction Obligations: Employers must deduct the employee's share (3% per tier) from monthly wages and add their own matching contribution (3% per tier).
Remittance Timing: Total contributions must be remitted to NSSF by the 9th day of the following month. For February 2026 salaries, the deadline is March 9, 2026.
Record Keeping: Employers must maintain accurate payroll records showing NSSF deductions and remittances for each employee for at least seven years.
Employee Registration: Employers must register all new employees with NSSF and provide them with their NSSF membership numbers.
Annual Returns: Employers must submit annual returns to NSSF showing total contributions made for each employee during the year.
Failure to fulfill these obligations exposes employers to significant penalties and potential legal action.
7. NSSF Remittance Deadlines and Procedures
NSSF contributions must be remitted monthly according to strict deadlines and procedures.
Payment Deadline: Contributions for any given month must reach NSSF by the 9th day of the following month. If the 9th falls on a weekend or public holiday, the deadline moves to the next working day.
Remittance Channels:
M-Pesa Paybill Number: 333300
Online portal: https://selfservice.nssf.or.ke/
Bank deposits at designated NSSF collection banks
Direct debit arrangements for large employers
Required Information: When remitting, employers must provide:
Employer NSSF number
Payment month and year
Individual employee NSSF numbers
Breakdown of Tier I and Tier II contributions per employee
Confirmation: Employers should retain payment receipts and confirmation messages as proof of remittance. NSSF issues monthly statements showing contributions received.
Late Payment: Any contributions received after the 9th of the month are considered late and attract penalties.
8. Penalties for Non-Compliance with NSSF Contribution Requirements
The NSSF Act provides for severe penalties against employers who fail to comply with contribution requirements.
Criminal Penalties: Under Section 48 of the NSSF Act, 2013, an employer who fails to remit NSSF contributions commits an offense. Upon conviction, the penalty is a fine not exceeding KSh 300,000 or imprisonment for a term not exceeding three months, or both.
Interest on Late Payment: NSSF charges interest at the rate of 2% per month on any contributions not remitted by the deadline. This compounds monthly until full payment is made.
Penalties for Non-Remittance: In addition to interest, NSSF may impose a penalty equal to 5% of the outstanding contribution amount.
Recovery Action: NSSF has legal authority to recover unpaid contributions through civil debt recovery proceedings in court. This includes obtaining attachment orders against the employer's assets.
Director Liability: Company directors can be held personally liable for unremitted NSSF contributions if it is proven that non-compliance occurred with their knowledge or consent.
Business Compliance Certificates: Employers with outstanding NSSF arrears may be denied compliance certificates required for business permits, tenders, and other regulatory approvals.
9. Contracting Out Options for Tier II Contributions
While Tier I contributions are mandatory for all employees, employers may contract out of Tier II contributions by providing an alternative occupational pension scheme.
Eligibility for Contracting Out: An employer can apply to contract out if they offer an approved occupational pension scheme that provides benefits at least equivalent to those under NSSF Tier II.
Approval Process: The employer must submit an application to the Retirement Benefits Authority (RBA) demonstrating that their pension scheme meets the minimum standards. Upon approval, RBA issues a contracting out certificate.
Schemes That Qualify: Individual pension plans, umbrella schemes, and employer-specific retirement benefit schemes approved by RBA can be used for contracting out purposes.
Employee Protection: Even when contracted out, employees must still receive pension benefits equivalent to or better than NSSF Tier II. The employer cannot simply eliminate Tier II without an alternative.
Tier I Remains Mandatory: Contracting out only applies to Tier II. All employers and employees must continue contributing to NSSF Tier I regardless of alternative pension arrangements.
Ongoing Compliance: Employers who have contracted out must submit annual proof to RBA that contributions to the alternative scheme are being made regularly.
10. How to Verify Your Employer is Remitting NSSF Correctly
Employees have several methods to confirm their employer is properly remitting NSSF contributions on their behalf.
NSSF Online Portal: Register on the NSSF member portal at https://selfservice.nssf.or.ke/ using your NSSF number. Once logged in, you can view your contribution history and verify monthly payments.
NSSF Mobile App: Download the "My NSSF" mobile application from Google Play Store or Apple App Store. The app provides real-time access to your account balance and contribution records.
USSD Code: Dial *303# from your mobile phone and follow the prompts to check your NSSF balance and recent contributions.
Monthly Statements: Request monthly or annual statements from NSSF showing all contributions received in your name.
Payslip Verification: Check your monthly payslip to confirm NSSF deductions are being made. The deduction should show both Tier I and Tier II amounts.
Annual NSSF Statement: NSSF sends annual statements to members. Review this carefully to ensure contributions match what was deducted from your salary.
If you discover discrepancies between amounts deducted from your salary and amounts reflected in your NSSF account, you should immediately raise the matter with your employer and report to NSSF.
11. Legal Remedies When Employers Fail to Remit NSSF
Employees whose employers deduct NSSF contributions but fail to remit them have several legal options.
Internal Resolution: First, raise the matter formally with your employer in writing, requesting explanation and immediate remittance of the outstanding contributions.
Report to NSSF: File a formal complaint with NSSF Compliance Department. Provide evidence such as payslips showing deductions. NSSF will investigate and pursue the employer for recovery.
Report to Ministry of Labour: Lodge a complaint with the Labour Officer in your county. The Ministry of Labour has enforcement powers under the Employment Act to compel employers to remit statutory deductions.
Employment and Labour Relations Court: File a claim in the Employment and Labour Relations Court seeking orders compelling the employer to remit contributions plus interest and penalties.
Criminal Complaint: Report the matter to the Directorate of Criminal Investigations (DCI) as potential theft or misappropriation of funds. Non-remittance of deducted contributions can constitute a criminal offense.
Class Action: If multiple employees are affected, consider joining together for a class action lawsuit against the employer for systematic non-compliance.
Constructive Dismissal Claim: Persistent failure to remit NSSF may constitute a fundamental breach of the employment contract, potentially justifying a constructive dismissal claim with compensation.
New NSSF Contribution Rates 2026 Kenya. Employees should document all evidence including payslips, employment contracts, and written communications with the employer before pursuing legal remedies.
12. Frequently Asked Questions (FAQs)
Q1: What happens if I earn more than KSh 36,000 per month?
If your monthly salary exceeds KSh 36,000, your NSSF contribution is capped at the maximum amount. You will pay KSh 1,080 as the employee contribution, and your employer will pay KSh 1,080, regardless of how much more you earn above the ceiling. Earnings above KSh 36,000 are not subject to NSSF deductions.
Q2: Can I opt out of NSSF contributions if I already have a private pension?
No. NSSF Tier I contributions are mandatory for all employees in formal employment and cannot be opted out of under any circumstances. Tier II contributions may be replaced by an alternative occupational pension scheme only if your employer has obtained official contracting out approval from the Retirement Benefits Authority. You cannot individually opt out.
Q3: Are NSSF contributions tax deductible?
Yes. Both Tier I and Tier II NSSF contributions are fully tax deductible when calculating your taxable income for PAYE purposes. This means your NSSF contributions reduce the amount of income subject to income tax, potentially lowering your overall tax burden. However, the contributions are still deducted from your gross salary.
Q4: What happens to my NSSF contributions if I lose my job?
Your NSSF contributions remain in your account and continue earning interest even when you are unemployed. The funds are preserved for you until you reach retirement age (currently 55 years) or meet other qualifying conditions for withdrawal. When you find new employment, your new employer should use the same NSSF number to continue contributions to your existing account.
Q5: Can I withdraw my NSSF contributions before retirement?
Generally, NSSF contributions can only be withdrawn upon reaching the retirement age of 55 years or on permanent emigration from Kenya. However, the NSSF Act provides limited exceptions for early withdrawal in cases of permanent disability or terminal illness. You cannot withdraw contributions simply because you left employment or need money for other purposes.
Q6: How do I know if my employer has contracted out of Tier II?
Check your payslip to see if Tier II NSSF deductions are being made. If only Tier I (approximately KSh 210) is deducted, your employer may have contracted out. You can also ask your HR department for a copy of the contracting out certificate issued by the Retirement Benefits Authority. Additionally, you should be receiving contributions to an alternative occupational pension scheme.
Q7: What should I do if my employer deducts NSSF but I cannot see it in my NSSF account?
First, verify your NSSF number is correct on your payslip. Then check your NSSF account online or via the mobile app to confirm contributions. If there is a discrepancy, notify your employer immediately in writing and give them 30 days to rectify. If they fail to act, report the matter to NSSF Compliance Department with copies of your payslips as evidence.
Q8: Do casual workers and part-time employees contribute to NSSF?
Yes. The NSSF Act applies to all employees, including casual workers, part-time employees, domestic workers, and those on short-term contracts. If you receive a regular wage from an employer, NSSF contributions are mandatory. The only exemptions are for genuinely self-employed individuals who have no employer-employee relationship.
Disclaimer: This article provides general information about NSSF contribution rates and obligations under Kenyan law. It is not legal advice. For specific guidance on your employment situation or NSSF compliance obligations, please consult with a qualified employment lawyer.
