The National Social Security Fund (NSSF) has announced new pension contribution guidelines that will take effect on February 1, 2026, introducing higher monthly deductions for both employers and employees.
The changes mark the final phase of the phased implementation under the NSSF Act No. 45 of 2013, a reform programme designed to strengthen retirement income security and expand pension coverage among formally employed Kenyans.
Under the new structure, Tier II pension contributions will increase to KSh 5,940 per month for employees and an equal amount for employers, bringing the total Tier II contribution to KSh 11,880.
How the contributions will apply
Tier I contributions remain unchanged and apply to earnings of up to KSh 9,000, with both the employer and employee contributing 6 per cent, amounting to KSh 1,080 in total.
Tier II applies to earnings between KSh 9,001 and KSh 108,000, where both parties will now contribute KSh 5,940 each.
This means the maximum combined monthly NSSF contribution for high-income earners will rise to KSh 12,960. Employees earning KSh 200,000 or more will reach the Tier II contribution ceiling, while Tier I contributions remain fixed.
NSSF clarified that workers earning below KSh 50,000 per month will not be affected, as their contributions remain within the existing thresholds.
Option for private pension schemes
Employers have also been given the option to remit their Tier II contributions to approved private pension schemes, provided those schemes meet statutory requirements and are registered with the Retirement Benefits Authority (RBA). Employers must notify the RBA at least 60 days in advance before making the switch from NSSF.
NSSF Chief Executive Officer David Koros said the reforms are meant to boost retirement savings, ensure long-term sustainability of the social security system, and offer flexibility to employers and employees through private pension alternatives.
He added that from 2027 onward, any future changes to contribution limits will be communicated through Gazette Notices issued by the Cabinet Secretary for Labour and Social Protection.
The new contribution rates are expected to affect payroll calculations and payslips, especially for higher-income employees. Employers and workers have been urged to familiarise themselves with the changes to ensure compliance.
For additional details on pension contributions and registration processes, NSSF advised the public to use the NSSF Self-Service Portal.
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