NSSF to Enforce Supreme Court-Backed Increase in Contribution Rates: New Rates
The National Social Security Fund (NSSF) is set to implement new increased rates in accordance with a recent Supreme Court ruling issued earlier this week. Despite the Supreme Court ordering a rehearing of the case challenging the new rates at the Appellate Court, NSSF has directed employers to apply the updated rates in the February payslips.
In a notice released on Friday, NSSF clarified that the Supreme Court ruling did not revoke the Court of Appeal Orders delivered on February 3, 2023. Consequently, the National Social Security Fund Act No. 45 of 2013 remains in effect.
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The notice reaffirmed the instructions issued to employers on January 12, 2024, regarding the remittance of NSSF contributions in accordance with the aforementioned Act. The Fund emphasized its commitment to upholding the rule of law, ensuring compliance with all legal obligations, and serving the best interests of stakeholders.
The Supreme Court directed the petition to be reheard by the Court of Appeal due to the junior court’s failure to address various legal concerns raised in the appeal. The judgment highlighted the need for a prioritized hearing considering the nature of the matter, public interest, and the extended time the case has taken in the judicial process.
Consequently, employed Kenyans will experience reduced take-home pay this month, while employers will be required to make increased contributions towards the social security of their employees. The new deductions stipulate that individuals earning Ksh20,000 will witness an increase from the current Ksh1,080 to Ksh1,200.
Those earning Ksh30,000 will now contribute Ksh1,800, up from the existing Ksh1,080. Individuals earning between Ksh36,000 and Ksh50,000 will have Ksh2,160 deducted from their salary.
Similarly, Kenyans earning Ksh100,000 will see a deduction of Ksh2,160, compared to the current Ksh1,080 remittance for social security. These adjustments are in line with the NSSF Act No. 45 of 2013 and the recent Supreme Court directive, impacting both employees and employers alike.
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Current Vs New NSSF Rates;
Currently, for a monthly salary of Ksh20,000, the NSSF contribution stands at Ksh1,080.00. Under the new rates, this contribution increases to Ksh1,200.00. Similarly, employees with a monthly salary of Ksh30,000 will see their NSSF contribution rise from Ksh1,080.00 to Ksh1,800.00.
For those earning Ksh36,000, the current contribution of Ksh1,080.00 will be raised to Ksh2,160.00 under the revised rates. The same adjustment applies to individuals with a monthly salary of Ksh50,000, where the contribution is set to increase from Ksh1,080.00 to Ksh2,160.00.
Even for those with a higher income of Ksh100,000, the NSSF contribution is set to double, moving from Ksh1,080.00 to Ksh2,160.00 per month.
This announcement reflects NSSF’s commitment to improving the benefits offered to contributors and ensuring that the fund remains sustainable in the long run.
It is important for employers and employees alike to be aware of these changes and adjust their financial planning accordingly. The revised rates are scheduled to take effect from the upcoming financial quarter. Keep an eye on further updates and notifications from NSSF for a smooth transition.
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NSSF to Enforce Supreme Court-Backed Increase in Contribution Rates: New Rates
