NSSF Deductions to Skyrocket In February: New Rates
Starting next month, Kenyans will face increased National Social Security Fund (NSSF) deductions. In February, NSSF will deduct between Ksh.420 and Ksh.1,740 from employees’ pay-slips.
A document obtained by Teachers Updates outlining the updated rates reveals that the lower earnings limit, considered the minimum pensionable salary, has risen to Ksh.7,000 from the current Ksh.6,000. Workers in this category will now contribute Ksh.420, up from Ksh.360.
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Simultaneously, the Upper Earnings Limit has been raised to Ksh.29,000 from Ksh.18,000, leading most employees to contribute Ksh.1,740, an increase from Ksh.1,080. Employers will match each contribution, as usual.
These rates will persist until the next review in January 2025. The new deduction plan, initiated last year, will progressively raise rates over five years.
This transition began in 2013 with the NSSF ACT, mandating a six percent monthly deduction from workers’ salaries. Anticipated to take effect in 2014, the new contribution rates faced obstacles in a decade-long legal battle.
However, the Court of Appeal approved the deductions in a September 2022 judgment, enabling NSSF to implement the new scheme last year, starting with a Lower Earnings Limit of Ksh.6,000 and an Upper Earnings Limit of Ksh.18,000, announced in a public notice in January.
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According to a table from the NSSF Act 2013, the lower earnings limit for 2025 may rise to Ksh.8,000, with the upper earnings limit set to double the national average earnings, enhancing savings for Kenyans.
Concerns have arisen regarding the impact of the current minimum wage, as the Ksh.6,000 lower earnings limit, set in the previous year, was based on the 2013 minimum wage.
Whether subsequent increases in the minimum wage will influence NSSF and the Ministry of Labour in determining future rates remains uncertain.
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NSSF Deductions to Skyrocket In February: New Rates
