Kenyan employees and employers are bracing for tougher financial times as the government plans to double contributions to the National Social Security Fund (NSSF) from February 1, 2025.

The new rates will require employees to contribute 6% of their monthly salary, with employers matching the same amount.

This adjustment raises the maximum monthly contribution for employees to KSh 4,320, up from the current KSh 2,160.

Impact on Salaries

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The increase in NSSF deductions comes amid growing frustrations among Kenyan workers, many of whom are already feeling the pinch of reduced take-home pay.

Combined with other statutory deductions such as PAYE, Housing Levy, and the new Social Health Insurance Fund (SHIF), net pay is shrinking significantly for employees across various income brackets.

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Examples of net pay after deductions include:

  • KSh 50,000 salary: KSh 39,273
  • KSh 100,000 salary: KSh 72,335
  • KSh 200,000 salary: KSh 138,310
  • KSh 350,000 salary: KSh 237,273
  • KSh 500,000 salary: KSh 336,235
  • KSh 800,000 salary: KSh 526,714
  • KSh 1 million salary: KSh 648,178

NSSF House

Revised Contribution Limits

In addition to the increase in deductions, the NSSF contribution limits will also be adjusted:

  • Lower income limit: Rising to KSh 8,000 from KSh 7,000
  • Upper income limit: Doubling to KSh 72,000 from KSh 36,000

This means:

  • The minimum contribution will rise to KSh 480 from KSh 420.
  • The maximum contribution will rise to KSh 3,840 from KSh 2,160.
  • Employees earning KSh 50,000 will contribute KSh 3,000 monthly, while those earning KSh 72,000 and above will pay KSh 4,320.

Further increases are planned for February 2026, with the lower earnings limit set to rise to KSh 9,000 and the upper limit pegged to three times the national average earnings, estimated at KSh 108,000.

The New SHIF

The looming NSSF deductions follow the introduction of revised Social Health Insurance Fund (SHIF) and Social Health Assurance (SHA) rates in October 2024.

These changes replaced the National Health Insurance Fund (NHIF) contributions with a progressive rate structure, further increasing financial burdens on Kenyan workers.

While the government argues that these adjustments aim to improve social security and healthcare, employees and employers alike are grappling with the cumulative financial impact.