How new NSSF rates will reduce your income from February

Salaried Kenyans earning Sh108,000 and above will see a slight cut from their pay slips as the implementation of the National Social Security Fund (NSSF) Act of 2013 enters its fourth year in February. 

The law, which came into effect in 2023 after facing a decade-long legal battle, transformed NSSF from a provident fund to a pension scheme, allowing the splitting of statutory deductions sliced from employees’ salaries and matched by employers into two Tiers.

The implementation has seen annual graduation in both lower and upper limits, with the former moving from Sh6,000 in 2023 to Sh7,000 in 2024 and Sh8,000.  Starting February, the lower limit will rise to Sh9,000.

Tier 2, on the other hand, has risen from Sh18,000 in the first year of implementation to Sh36,000 in 2024, Sh72,000 in 2025 and will now move to Sh108,000 starting next month. 

NSSF managing director David Koross says there is no change in deductions for those with a gross salary of Sh108,000, accounting for close to 90 per cent of the 3.2 million people with formal jobs in the country.

Latest data shows that the number of Kenyan workers earning over Sh100,000 monthly increased by more than 10,000 to 397,541 last year. Of these, 66 per cent were men (262,555), while 34 per cent were women (134,986).

Those earning less than Sh9,000 will continue to part with six per cent of their gross pay to be matched by their employers.