The Employer's KSh 6,480 Is Yours Too: How Kenya's NSSF Year 4 Rates WorkThe Employer's KSh 6,480 Is Yours Too: How Kenya's NSSF Year 4 Rates Work
Key Highlights
- Up to KSh 12,960 ($99.75) a month now flows into each formal worker's NSSF account, and employers supply half of it.
- The Fund declared a record 17% for members, up from 11% the year before, yet inflation has since climbed to 7.3%.
- Three worked payslips show the exact deduction, and one rule lets employers move part of it to a private scheme.
Every month, up to KSh 12,960 ($99.75) leaves a Kenyan payroll for the National Social Security Fund, and only half of it comes out of the worker's pay. The other half is the employer's, and both halves are credited to the worker's retirement savings.
Since February 2026, when the fourth step of the NSSF Act 2013 schedule took effect, the rates are fixed by the Fund's own Year 4 notice to employers. The rules look dull until you see the arithmetic. Then they explain why a payslip shrinks and what the pot is supposed to do in return.
The two tiers, in plain numbers
NSSF takes 6% of pay from the employee and 6% from the employer. The deduction is split into two bands.
Tier I covers pay up to the lower earnings limit of KSh 9,000 ($69.27). Six per cent of that is KSh 540 ($4.16) from each side, or KSh 1,080 ($8.31) in total. Tier II covers pay between KSh 9,000 and the upper earnings limit of KSh 108,000 ($831.28), a band of KSh 99,000 ($762.01). Six per cent of that band is KSh 5,940 ($45.72) from each side, or KSh 11,880 ($91.44) in total.
Add the tiers and the ceiling is KSh 6,480 ($49.88) from the worker and the same from the employer, KSh 12,960 ($99.75) in all. Pay above KSh 108,000 attracts nothing more.
That ceiling is not arbitrary: PwC's summary of the rules says it is set at three times the monthly national average earnings, so it rises as wages rise, and every step of the schedule has pushed more of a salary into the Fund. Employers must remit by the ninth day of the following month, according to the NSSF notice.
Three payslips, worked through
The tiers matter less than the result, so take three salaries.
A worker on KSh 20,000 ($153.94) pays KSh 540 into Tier I and 6% of the KSh 11,000 ($84.67) above it, KSh 660 ($5.08), into Tier II. That is KSh 1,200 ($9.24) a month, which is simply 6% of pay. The employer adds the same, so KSh 2,400 ($18.47) a month, or KSh 28,800 ($221.67) a year, goes into the worker's account.
A worker on KSh 50,000 ($384.85) pays KSh 3,000 ($23.09), and the employer matches it. That is KSh 6,000 ($46.18) a month and KSh 72,000 ($554.19) a year.
A worker earning KSh 108,000 or more pays the maximum KSh 6,480 ($49.88), and with the employer's share the account receives KSh 12,960 ($99.75) a month, or KSh 155,520 ($1,197.04) a year.
The pattern is that below the ceiling NSSF is a flat 6% of pay from each side. The employer's share is part of the worker's pay package, even though it never appears in take-home pay.
What the money earns
The Fund does not pay a fixed rate. It declares an interest rate each year after the financial year closes. The same notice states that the Fund declared a net interest rate of 17% for members for 2024/2025.
The Star reported that members were set to earn a record 17%, up from 11% the year before, on assets of about KSh 575B ($4.43B) held for roughly 3.6 million active members.
Treat the 17% as a high mark, not a promise. The figures suggest what the swing means in shillings. On a balance of KSh 1M ($7,697.04), 17% credits KSh 170,000 ($1,308.49) and 11% credits KSh 110,000 ($846.67), a gap of KSh 60,000 ($461.82) in a single year. The Fund's returns come from bonds and equities, so they move with markets and not with the Act.
Inflation is the yardstick that matters. Kenya's annual rate reached 7.3% in October, as Mwenendo reported on the October price figures. A declared rate only builds wealth when it beats the rise in prices, which is the same test Mwenendo applied to the real return on a saver's money.
The levers a worker or employer has
First, check the payslip against the figures above. Tier I and Tier II should add to 6% of pay up to KSh 108,000. A deduction that does not match is a question for the employer first and the Fund second.
Second, an employer can send Tier II contributions to a private scheme registered with the Retirement Benefits Authority instead of the Fund, provided it gives the Authority 60 days' written notice, according to the same PwC summary. Tier I stays with NSSF either way. The choice changes who invests the money, not how much goes in.
Third, NSSF is not the only deduction competing for a payslip. The housing levy takes its own slice, so the true cost of formal employment is the sum of every line, not any one of them.
The practical test for any worker is simple. Multiply your pay, up to KSh 108,000, by 12%. If that is not what lands in your account each month, someone has some explaining to do.
In Summary
- Who pays NSSF contributions?
- Formal employees pay 6% of pay and employers match it with another 6%.
- What is the maximum monthly contribution?
- KSh 12,960 ($99.75) in total, being KSh 6,480 ($49.88) each from worker and employer.
- When did Year 4 rates start?
- February 2026, with employer remittances due by the ninth day of the following month.
- Where do the bands stop?
- Tier I covers pay up to KSh 9,000 ($69.27) and Tier II covers pay up to KSh 108,000 ($831.28).
- Why does the declared rate matter?
- The Fund declared 17% for 2024/2025, but inflation reached 7.3% in October, so real returns depend on prices.
- How can Tier II be redirected?
- An employer can send it to a registered private scheme after giving the Retirement Benefits Authority 60 days' notice.