The National Social Security Fund (NSSF) has instructed all employers to begin applying the new Year 4 contribution rates under the NSSF Act, Cap 258, with effect from February 2026.
In a public notice issued by NSSF Managing Trustee and Chief Executive Officer David Koross, the Fund confirmed that the Year 3 contribution rates expired on 31 January 2026 and that the revised deductions must now be implemented immediately. Employers are required to remit the contributions by the 9th day of the following month.
Under the new framework, the maximum monthly NSSF contribution per employee has increased to KSh 12,960, up from KSh 6,480 in Year 3, as the Fund continues the phased implementation of the NSSF Act.
How the new NSSF contributions are calculated
The NSSF contribution structure remains based on a two-tier system linked to an employee’s monthly earnings.
Tier I applies to the lower earnings limit of KSh 9,000. Contributions are charged at 6 per cent, with the employee contributing KSh 540 and the employer matching the amount with KSh 540, making a total Tier I contribution of KSh 1,080.
Tier II applies to earnings up to the upper limit of KSh 108,000. Contributions are calculated at 6 per cent of the difference between the upper and lower limits, which is KSh 99,000. This results in a Tier II contribution of KSh 5,940 from the employee and KSh 5,940 from the employer, giving a total Tier II contribution of KSh 11,880.
Maximum contribution from February 2026
From February 2026, the maximum total monthly contribution per employee therefore stands at KSh 12,960, shared equally between the employee and the employer at KSh 6,480 each.
Employees earning KSh 108,000 or more per month will contribute the full amount, while those earning below the upper limit will have their contributions calculated proportionately within the tiered structure.
Employers are legally required to match employee contributions and remit the combined amount to the Fund by the stipulated deadline. Failure to comply attracts penalties and interest in accordance with the NSSF Act.
NSSF declares 17% interest for members
During its 8th Annual General Meeting held on 6 February 2026, NSSF also announced a 17 per cent net interest rate for members for the 2024/2025 financial year. The interest applies to members’ accumulated contributions and is credited annually.
Impact of the Year 4 increase
The Year 4 adjustment represents a major milestone in the full operationalisation of the NSSF Act, which was enacted in 2013 and has faced prolonged legal and implementation challenges.
The higher contribution levels are expected to significantly increase the pool of funds available for investment, supporting improved returns and enhanced retirement benefits for members. However, the changes will also reduce employees’ monthly take-home pay and raise payroll costs for employers.
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