NSSF 2026 Rates Push Monthly Deduction to KSh12,960

The National Social Security Fund has announced new contribution rates for 2026. Importantly, the changes take effect starting February.

Through an official notice, NSSF directed employers to adjust payroll systems immediately. Consequently, both workers and companies must comply with the updated structure.

The revision follows the phased rollout of the NSSF Act. Year Three rates ended on January 31, ushering in Year Four contributions.

Breakdown of Tier 1 Contributions

Under the new framework, Tier 1 covers earnings up to KSh9,000 monthly. Both employees and employers will contribute six percent each.

This equals KSh540 from each party. Therefore, the total Tier 1 contribution reaches KSh1,080 per employee.

Tier 1 remains mandatory for all eligible workers. It forms the foundation of the pension savings structure.

Tier 2 Raises Maximum Deduction

Meanwhile, Tier 2 applies to earnings above KSh9,000. It now extends to salaries capped at KSh108,000.

Each party will contribute up to KSh5,940 under Tier 2. As a result, the Tier 2 total reaches KSh11,880.

When combined with Tier 1, the maximum monthly contribution hits KSh12,960. This represents the highest deduction under the phased system.

Employers must remit contributions by the ninth day of the following month. Accordingly, March will mark the first deadline under the new rates.

Impact on Workers’ Take-Home Pay

The increase will affect net salaries, especially for higher earners. However, the long-term goal remains retirement security.

For a worker earning KSh50,000, Tier 1 dominates the deduction. Only a smaller portion falls under Tier 2. Therefore, the net pay reduction remains moderate but noticeable. Higher earners will feel a larger adjustment.

An employee earning KSh100,000 will contribute KSh6,000 monthly. Previously, the same worker paid KSh4,320.

NSSF CEO David Korros addressing a gathering during the launch of of NSSF’s Corporate Strategic Plan 2023-2027 on Tuesday, May 7. Photo/ NSSF

The employer will match the employee contribution fully. Thus, total retirement savings grow significantly.

Strong Fund Performance Boosts Confidence

Additionally, NSSF announced a 17 percent net interest return. This applies to the 2024/2025 financial year.

The announcement followed the fund’s eighth Annual General Meeting. Consequently, members expect stronger long-term returns.

Officials argue the higher rates will strengthen retirement security nationwide. Ultimately, the reform aims to expand social protection for Kenyan workers.