On January 12th, 2024, the National Social Security Fund (NSSF) issued a mandate introducing new contribution rates for the second year. The NSSF is a Kenyan government agency responsible for collecting, safekeeping, responsibly investing, and distributing retirement funds for employees in both the formal and informal sectors of the Kenyan economy. Participation is compulsory for both employers and employees. The fund functions as both a pension and a provident fund. This notification is intended for all employers.
As mandated to implement the NSSF Act, 2013 and Article 43 of the Kenyan Constitution on Economic and Social Rights. NSSF recently released a notice to employers indicating the new NSSF rates 2024 in accordance with the Third Schedule of the NSSF Act 2013. The rates are effective from the February 2024 payroll.
Here are the New NSSF Rates 2024 (that will be paid by both employers and employees)
| Lower Limit (Tier 1) | Kshs. 7,000 |
| Total Contribution by employee | Kshs. 420 |
| Total Contribution by employer | Kshs. 420 |
| Total Tier 1 NSSF Contributions | Kshs. 840 |
| Upper Limit (Tier 2) | Kshs. 36,000 |
| Contribution on Upper Limit (6% of Upper Limit less Lower Limit) | Kshs. 29,000 |
| Total Contribution by employee | Kshs. 1,740 |
| Total Contribution by employer | Kshs. 1,740 |
| Total Tier 2 NSSF Contributions | Kshs. 3,480 |
| Total NSSF Contributions | Kshs. 4,320 |
The Act directed a 6% increase in NSSF monthly contribution per employee matched with the employers from a minimum of Kshs. 200. The implementation of the law saw employees earning Kshs. 18,000 contribute Kshs. 1080 to the scheme and NSSF deductions on pay above Sh36,000 will double.
The previous lower earning limit (Tier 1) was capped at Kshs. 6,000, has now been revised to Kshs. 7,000 whereas the upper earning limit which was Kshs. 18,000 has been revised to Kshs. 36,000 and above.
How will the New NSSF Rates 2024 Affect Employees?
Below is how the new NSSF contributions will affect workers in the different salary scales (Employers will match contributions made by employees)
| Salary Scale | Current Deductions | New Deductions |
| Kshs. 10,000 | 600 | 600 |
| Kshs. 18,000 | 1,080 | 1,080 |
| Kshs. 20,000 | 1,080 | 1,200 |
| Kshs. 30,000 | 1,080 | 1,800 |
| Kshs. 36,000 | 1,080 | 2,160 |
| Kshs. 50,000 | 1,080 | 2,160 |
| Kshs. 100,000 | 1,080 | 2,160 |
Sources
NSSF Kenya
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Brian Muchiri
Marketing & Design- ElevateHR Africa