The National Social Security Fund (NSSF) is a Kenyan government agency whose main objective is to offer social protection to all Kenyan workers in the formal and informal sectors. The NSSF functions as both a pension and a provident fund, offering long-term retirement benefits and savings in certain circumstances.
NSSF was established in 1965 and currently operates under the 2013 Act. The act provides a framework for employers to register for NSSF and make contributions on behalf of their employees. Failure to do so on time can lead to substantial penalties and legal consequences.
Starting February 2026, the National Social Security Fund implemented the fourth phase of its contribution increases, raising the lower contribution limit from KSh 8,000 to KSh 9,000 and expanding the upper limit from KSh 72,000 to KSh 108,000. These changes represent another important milestone in the gradual five-year implementation of enhanced NSSF contributions mandated by the NSSF Act of 2013.
What are Tier 1 and Tier 2 NSSF 2026?
The National Social Security Fund rates continue to operate on a two-tiered system, but with substantially expanded contribution ranges that affect many more Kenyan workers than in previous years. The amount of NSSF contributions you make is determined by the salary tier in which you fall, with both tiers now covering a much wider range of income levels.
NSSF has two tiers categorized as Tier 1 and Tier 2 Contributions as follows:
Tier 1 Contributions
Tier 1 now applies to the first KSh 9,000 of your monthly earnings, increased from the previous KSh 8,000. Both you and your employer contribute 6% of this amount, for a total contribution of 12%. This means the minimum monthly contribution has increased from KSh 480 to KSh 540 per person.
For example, if you earn KSh 10,000 per month, the Tier 1 contribution will be calculated on KSh 9,000, meaning you’ll pay KSh 540 while your employer also contributes KSh 540, totaling KSh 1,080 monthly.
Tier 2 Contributions
Tier 2 now applies to earnings between KSh 9,000 and KSh 108,000, representing a significant expansion from the previous range of KSh 8,000 to KSh 72,000. Both you and your employer continue to contribute 6% each on this portion of your salary.
This expansion means that employees earning up to KSh 108,000 monthly now contribute on their full salary, whereas previously, those earning above KSh 72,000 had a contribution ceiling that limited their retirement savings accumulation.
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Can Tier 2 Be Directed to a Private Pension Fund?
One of the less understood aspects of the NSSF Act 2013 is the provision for contracting out of Tier 2. Employers can apply to the Retirement Benefits Authority (RBA) to direct Tier 2 contributions away from NSSF and into an approved occupational pension scheme instead. This option is particularly relevant for companies that already operate their own staff pension fund and want contributions to flow into that arrangement rather than NSSF.
For a contracting-out arrangement to be approved, the employer’s existing occupational pension scheme must offer benefits that are equivalent to or better than those provided by NSSF. The scheme must be formally registered with the RBA and must meet the specific funding and governance requirements set out under the Retirement Benefits Act.
Key points to understand about contracting out:
- Tier 1 always stays with NSSF — only Tier 2 can be contracted out; there is no provision to direct Tier 1 contributions to a private scheme
- Both employee and employer Tier 2 contributions can be redirected once RBA approval is granted
- The application must be made jointly by the employer and the trustees of the occupational scheme
- Approval is not automatic — the RBA assesses the scheme’s benefits and financial health before granting permission
- Employees must be informed of the contracting-out arrangement and their rights under it
If you are an employer with an existing pension scheme and believe you may qualify, visit the Retirement Benefits Authority at rba.go.ke for the current contracting-out application process and requirements.
What is the Maximum Contribution to the NSSF?
To understand the maximum contribution scenario, consider someone earning KSh 108,000 or more per month:
- Tier 1 Calculation: You and your employer each contribute KSh 540 (6% of KSh 9,000).
- Tier 2 Calculation: You and your employer each contribute KSh 5,940 (6% of KSh 99,000, which is KSh 108,000 minus KSh 9,000)
Therefore, the total Monthly Contribution is KSh 12,960, with you contributing KSh 6,480 and your employer matching that exact amount.
How the New Rates Affect Different Salaries
The February 2026 NSSF rate adjustments create varying impacts across different income levels, with the most significant changes affecting middle and higher-income earners. Understanding these impacts helps you plan your finances more effectively and appreciate the long-term benefits of increased retirement savings.
For employees earning up to KSh 9,000 monthly, the changes are relatively modest. Your contribution increases from KSh 480 to KSh 540 monthly, representing an additional KSh 60 in deductions. However, this also means KSh 60 more in employer matching, resulting in KSh 120 additional monthly retirement savings.
The most substantial impact affects employees’ earnings above the previous KSh 72,000 ceiling, who now contribute a much larger portion of their salary. This represents a fundamental shift in how higher earners build their retirement funds through NSSF.
The following table illustrates how the new rates affect different salary levels, showing both your personal contribution and the total retirement savings (including employer matching):
| Monthly Gross Salary (KSh) | Your Monthly Contribution (KSh) | Total Monthly Savings (KSh) | Change vs. 2025 |
|---|---|---|---|
| 10,000 | 600 | 1,200 | No change |
| 20,000 | 1,200 | 2,400 | No change |
| 30,000 | 1,800 | 3,600 | No change |
| 40,000 | 2,400 | 4,800 | No change |
| 50,000 | 3,000 | 6,000 | No change |
| 72,000 | 4,320 | 8,640 | No change |
| 100,000 | 6,000 | 12,000 | +3,360 |
| 108,000+ | 6,480 | 12,960 | +4,320 |
Note: The Total Savings column represents your contribution plus your employer’s matching contribution, showing the monthly amount added to your NSSF account. The “Change vs. 2025” column reflects the increase in total monthly savings compared to 2025 (Phase 3) rates. Employees earning up to KSh 72,000 see no change in total contributions because the same 6% rate applies across both tiers — only the boundary between Tier 1 and Tier 2 shifts. The meaningful increase applies exclusively to employees earning between KSh 72,001 and KSh 108,000.
When Must NSSF Contributions Be Remitted?
NSSF contributions deducted from employee salaries in any given month must be remitted to NSSF by the 9th day of the following month. For example, contributions deducted from February 2026 salaries must be submitted to NSSF by March 9, 2026. If the 9th falls on a Saturday, Sunday, or public holiday, the deadline shifts to the next working day.
You can remit contributions through the following channels:
- M-Pesa Paybill: Use Business Number 333300, with your NSSF employer number as the account number
- Bank transfer: Payments can be made via any bank using the NSSF bank account details provided on your remittance slip
- Online portal: Log in to the NSSF employer self-service portal at
nssf.or.keto generate remittance schedules and make payments directly - In person: Payments are accepted at any NSSF branch office across Kenya
When remitting, always accompany your payment with a properly completed remittance schedule that lists each employee’s name, NSSF number, gross salary, and individual Tier 1 and Tier 2 contribution amounts. Employers who submit incomplete or inaccurate schedules risk delays in crediting employee accounts, which can create disputes and additional administrative work down the line.
It is important to understand that your obligation as an employer does not end at deducting the contribution from the employee’s salary. Under the NSSF Act 2013, you are legally responsible for ensuring that both the employee’s deduction and your own matching contribution are remitted on time. Failing to remit what you have already deducted is treated as a serious criminal offence under the Act.
Penalties for Non-Compliance
Employers who fail to register, fail to deduct, or fail to remit NSSF contributions on time face significant financial and legal consequences under the NSSF Act 2013. The Financial penalties include a Late payment penalty, which is ussually 5% of the outstanding contribution amount, charged for every month or part of a month that the payment is overdue. In addition to the 5% penalty, interest accrues on the unpaid balance at 2% per month until the full amount is settled.
In addtion under Section 48 of the NSSF Act 2013, an employer who fails to register employees, fails to deduct contributions, or fails to remit collected contributions commits a criminal offence. The penalties upon conviction include a fine not exceeding KSh 300,000, or Imprisonment for a term not exceeding 3 months, or Both the fine and imprisonment
It is important to note that directors and senior managers of a company can be held personally liable for the company’s NSSF non-compliance. The Act allows prosecution of the individuals within a company who were responsible for ensuring compliance, meaning personal assets, not just company assets, may be at risk.
Frequently Asked Questions
What are the new NSSF rates in Kenya for 2026?
In February 2026, Kenya entered Phase 4 of the implementation of the NSSF Act 2013. Tier 1 contributions apply to the first KSh 9,000 of monthly earnings at a rate of 6% each for employee and employer (KSh 540 per person). Tier 2 applies to earnings between KSh 9,000 and KSh 108,000, with a 6% rate. The maximum combined monthly contribution is now KSh 12,960.
What is the difference between Tier 1 and Tier 2 NSSF contributions?
Tier 1 covers the lower portion of your salary (the first KSh 9,000) and must always be contributed to NSSF. Tier 2 covers earnings above KSh 9,000 up to KSh 108,000, and employers may redirect these contributions to an approved private occupational pension scheme instead of NSSF, subject to RBA approval. Both tiers use a 6% contribution rate from both employee and employer.
What is the maximum NSSF contribution in Kenya in 2026?
The maximum employee contribution is KSh 6,480 per month, reached when a salary hits KSh 108,000. The employer matches this exactly, bringing the total maximum monthly retirement savings to KSh 12,960. Employees earning above KSh 108,000 are not required to contribute on earnings beyond that ceiling.
When must NSSF contributions be remitted?
NSSF contributions must be remitted to NSSF by the 9th day of the month following the payroll month. For instance, contributions deducted from March 2026 salaries must be submitted to NSSF by 9 April 2026. If the 9th falls on a public holiday or a weekend, the deadline is moved to the next working day.
