Kenyan employees are bracing for a significant hit to their take-home pay as higher National Social Security Fund (NSSF) contributions kick in next month, amid soaring living costs and economic pressures.
Starting February 1, 2026, the upper limit for pensionable earnings will rise to Ksh 108,000, pushing mandatory NSSF deductions higher for middle- and high-income workers. Under the ongoing phased rollout of the NSSF Act 2013, both employees and employers will each contribute 6% on earnings up to this new ceiling—translating to a maximum monthly deduction of Ksh 6,480 per side, up from Ksh 4,320 previously.
This marks the fourth phase of the five-year implementation plan that began in 2023, progressively expanding the contribution base to strengthen retirement savings. The lower earnings limit for Tier I contributions has also increased to Ksh 9,000, ensuring broader coverage.
How the New NSSF Rates Affect Your Salary
– Low earners (below Ksh 9,000): Minimal impact, with contributions capped at a fixed amount based on actual pay.
– Mid-level earners: Those previously capped at lower limits will see incremental increases.
– High earners (Ksh 108,000+): The biggest bite—employee deductions jump by up to Ksh 2,160 monthly, directly reducing net pay.
For example, a worker grossing Ksh 150,000 will now lose an extra Ksh 2,160 to NSSF each month compared to 2025 rates. Employers face matching costs, potentially influencing hiring or salary adjustments.
Officials emphasize that the changes primarily affect those earning above Ksh 108,000 in gross salary, aiming to build a more robust pension system. The ultimate goal: Better retirement benefits, invalidity coverage, and survivor protections under the modernized fund.
Yet, with inflation biting and household budgets already stretched by rising fuel, food, and housing costs, many employees view the hike as poorly timed. Critics argue it adds to the tax burden without immediate relief, exacerbating financial strain for families.
The government insists the reforms are essential for long-term social security, replacing the outdated flat-rate system with sustainable percentage-based contributions. By 2027, the final phase could push limits even higher, further aligning Kenya’s pension scheme with regional standards.
Workers are advised to review payslips closely and consult payroll providers for exact calculations. Tools like the official KRA NSSF calculator can help estimate the impact.
As February approaches, this mandatory savings boost underscores a harsh reality: Securing tomorrow’s retirement may come at the expense of today’s wallet.
