When will the new NSSF rates take effect?
The new rates, which will be implemented in February 2025, will trim employees' pay by up to KSh 1,512, further burdening households amid harsh economic times.
NSSF will adjust the upper- and lower-income limits from KSh 36,000 to KSh 72,000 and KSh 7,000 to KSh 8,000, respectively. According to the NSSF, Act 2013, the minimum contribution will rise from KSh 420 to KSh 480, while the highest deduction will increase from KSh 2,160 to KSh 3,840. "The lower limit earnings for the third year of implementation of the NSSF Act of 2013 will be KSh 8,000, while the upper earning limit will be two times the national average (KSh 72,000)," the act states.
The new NSSF rates will affect payslips Kenyans earning KSh 50,000 monthly will pay KSh 3,000, up from KSh 2,160. This includes KSh 480 for tier I and KSh 2,520 for tier II contributions. Business Daily reported that employees taking home KSh 72,000 and above will be deducted KSh 4,320 from KSh 2,160. Employers will be expected to match employee contributions, increasing the cost of doing business in Kenya.
"An employer shall pay the contribution under subsection (1) on the ninth day of each month or on such later date as the board may, in consultation with the Cabinet secretary, prescribe," the NSSF Act, 2013, explains. How NSSF rates rose in 2022, President William Ruto sought to increase NSSF monthly contributions tenfold from KSh 200 to KSh 2,000. Central Organisation of Trade Unions (COTU) Kenya secretary-general Francis Atwoli backed the proposals.
The Court of Appeal sustained the NSSF Act 2013 that directed an increase in monthly contributions from KSh 400 to KSh 2,160.
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