Kenya's NSSF deduction changed again in February 2026. The National Social Security Fund moved into Year 4 of the phased contribution schedule, raising the lower earnings limit to KES 9,000 and the upper earnings limit to KES 108,000. For a high earner, the maximum employee NSSF deduction is now KES 6,480 per month, and the employer must match the same amount. The combined maximum monthly contribution for one employee is therefore KES 12,960.
This guide was verified on May 3, 2026 against the official NSSF Year 4 notice carried through MyGov, the Kenya Law version of the National Social Security Fund Act, the KRA PAYE page, the KRA Affordable Housing Levy public notice, and the Social Health Insurance regulations published by the Ministry of Health. It is written for Kenyan employees checking payslips, payroll teams updating salary templates, founders modelling employment cost, and accountants reconciling PAYE with statutory deductions.
If you only need a take-home pay number, use the Kenya PAYE Calculator. This article focuses on why the NSSF number changed, how Tier I and Tier II are calculated, and how the deduction fits beside PAYE, SHIF and the Affordable Housing Levy.
Kenya NSSF Rates 2026 Snapshot
| Payroll question | Current position verified May 3, 2026 |
|---|---|
| Effective month | February 2026, after Year 3 rates ended on January 31, 2026. |
| Tier I lower earning limit | KES 9,000. |
| Tier I employee maximum | KES 540, calculated as 6% of KES 9,000. |
| Tier I employer maximum | KES 540, matching the employee contribution. |
| Tier II upper earning limit | KES 108,000. |
| Tier II employee maximum | KES 5,940, calculated as 6% of KES 99,000. |
| Maximum employee contribution | KES 6,480 per month. |
| Maximum combined contribution | KES 12,960 per employee per month. |
| NSSF remittance date | By the 9th day of each subsequent month, according to the NSSF notice. |
The headline change is the upper earnings limit. Under Year 4, the Tier II band is no longer capped at the earlier level. It now extends up to KES 108,000, which is why employees earning KES 108,000 or more see the full KES 6,480 employee contribution. Employees below that salary do not pay the maximum. Their Tier II amount is calculated only on the part of pensionable earnings above KES 9,000.
The employer cost also rises. NSSF is not only an employee deduction. The employer contributes the same 6% on the same pensionable earnings structure. That means a gross salary budget and a payroll cost budget are not the same thing. A company hiring at KES 150,000 gross should budget the salary, the employer's NSSF match, the employer Affordable Housing Levy, and any other employer benefits or insurance costs separately.
How Tier I and Tier II Work
The NSSF Act uses a two-tier structure. Tier I covers pensionable earnings up to the lower earnings limit. Tier II covers pensionable earnings above the lower limit and up to the upper earnings limit. Both employee and employer contribute at 6%.
| Tier | 2026 earnings band | Employee rate | Employer rate | Maximum employee amount |
|---|---|---|---|---|
| Tier I | KES 0 to KES 9,000 | 6% | 6% | KES 540 |
| Tier II | KES 9,001 to KES 108,000 | 6% | 6% | KES 5,940 |
| Total | Up to KES 108,000 | 6% across the covered bands | 6% across the covered bands | KES 6,480 |
The formula is straightforward:
- Tier I employee contribution: 6% times the lower of gross pensionable earnings and KES 9,000.
- Tier II employee contribution: 6% times the amount above KES 9,000, capped when earnings reach KES 108,000.
- Employer contribution: the same Tier I and Tier II calculation, paid by the employer on top of salary.
For a salary above KES 108,000, the extra salary does not increase the employee's NSSF deduction under the Year 4 limits. That is why the contribution is capped at KES 6,480 for the employee and KES 6,480 for the employer.
NSSF Examples at Common Salary Levels
These examples use the official Year 4 limits only. They do not invent allowances or employer-specific benefits.
| Gross monthly salary | Tier I employee | Tier II employee | Total employee NSSF | Total employer NSSF |
|---|---|---|---|---|
| KES 8,000 | KES 480 | KES 0 | KES 480 | KES 480 |
| KES 30,000 | KES 540 | KES 1,260 | KES 1,800 | KES 1,800 |
| KES 50,000 | KES 540 | KES 2,460 | KES 3,000 | KES 3,000 |
| KES 108,000 | KES 540 | KES 5,940 | KES 6,480 | KES 6,480 |
| KES 150,000 | KES 540 | KES 5,940 | KES 6,480 | KES 6,480 |
At KES 50,000, Tier I is already maxed at KES 540. Tier II is 6% of KES 41,000, because KES 50,000 minus KES 9,000 equals KES 41,000. That gives KES 2,460, and the employee's total NSSF deduction is KES 3,000. At KES 150,000, the salary is above the upper earnings limit, so the employee pays the maximum KES 6,480 rather than 6% of the whole salary.
This is the most common payroll error after a rate change. Some sheets calculate 6% on the full salary without the KES 108,000 cap. Others keep old Year 3 limits and under-deduct. Either error can distort PAYE because NSSF is part of the pre-tax deduction stack.
How NSSF Affects PAYE
KRA's PAYE guidance says taxable employment income includes cash pay and qualifying non-cash benefits. The same KRA page lists amounts deductible in determining taxable employment income, including the Affordable Housing Levy, Social Health Insurance Fund contributions, mortgage interest within the stated limit, and contributions to registered pension or provident funds or a registered individual retirement fund up to KES 360,000 per year or KES 30,000 per month.
NSSF sits in that pension contribution lane. In a normal payroll workflow, the employee NSSF contribution reduces taxable employment income before the PAYE bands are applied. The employer contribution is an employer cost, not an employee cash deduction from net pay.
Here is the practical sequence for a Kenyan payslip:
- Start with gross monthly salary and taxable benefits.
- Calculate employee NSSF using the Year 4 Tier I and Tier II limits.
- Calculate SHIF at 2.75% of gross salary or wage, subject to the legal minimum where relevant.
- Calculate the employee Affordable Housing Levy at 1.5% of gross monthly salary.
- Subtract allowable deductions to arrive at taxable employment income.
- Apply the KRA PAYE bands and subtract personal relief and any valid insurance relief.
- Arrive at net pay after PAYE, NSSF, SHIF, AHL and any approved employer deductions.
Use the Kenya PAYE Calculator after checking your gross salary and NSSF tier. If the NSSF input in a spreadsheet is wrong, the PAYE number can also be wrong even when the tax bands are correct.
NSSF Is Not SHIF or the Housing Levy
The 2026 payslip can feel crowded because three statutory deductions sit beside PAYE. They are not interchangeable.
| Deduction | Purpose | 2026 payroll basis | Employee impact |
|---|---|---|---|
| NSSF | Retirement and social security contribution. | 6% employee plus 6% employer across Tier I and Tier II, capped by the Year 4 limits. | Employee deduction capped at KES 6,480 from February 2026. |
| SHIF | Social health insurance contribution. | 2.75% of gross salary or wage for salaried households, payable by the ninth day of each month. | Percentage deduction that rises with gross salary. |
| Affordable Housing Levy | Housing levy collected by KRA. | 1.5% employee plus 1.5% employer on gross monthly salary. | Employee pays 1.5% of gross salary, with employer match outside net pay. |
| PAYE | Income tax collected by employer through KRA. | KRA bands from 10% to 35% after allowable deductions and reliefs. | Depends on taxable employment income and reliefs. |
SHIF is set by the Social Health Insurance regulations at 2.75% of gross salary or wage for households with income from salaried employment. The regulations also say the monthly amount should not be less than KES 300. KRA's Affordable Housing Levy notice says employers deduct 1.5% from the employee's gross monthly salary and remit it with an equal employer contribution. Those rules remain separate from the NSSF Year 4 notice.
Payroll Checks for Employees and Employers
Employees should check three figures on the next payslip after a payroll update. First, confirm that the NSSF figure uses the February 2026 Year 4 limits. Second, check whether SHIF is 2.75% of gross salary or wage. Third, check whether the employee housing levy is 1.5% of gross monthly salary. If any one of those inputs is wrong, the take-home pay and PAYE calculation may be off.
Employers should update both sides of the ledger. The employee deduction changes net pay, while the employer match changes payroll cost. The NSSF notice also reminds employers that remittances should be made by the 9th day of each subsequent month. KRA's PAYE page says PAYE should be remitted and the PAYE return filed by the 9th day of the following month. The KRA Affordable Housing Levy notice uses the 9th working day after the end of the month for AHL. Those due-date differences matter when building a statutory calendar.
For salary offers, separate employee net pay from employer total cost. A KES 150,000 gross salary now carries a maximum employer NSSF contribution of KES 6,480 and an employer housing levy of KES 2,250 before any private medical cover, pension top-up, payroll software, leave accrual or other benefits. That does not reduce the employee's gross salary, but it does affect the employer's budget.
For employees, the main change is simpler. More of the payslip may move into retirement savings before PAYE is calculated, but monthly cash pay can still fall because NSSF is a real deduction. The effect is strongest for workers earning between KES 72,000 and KES 108,000, because the Year 4 upper limit expanded the salary band subject to Tier II contributions.
Sources Checked on May 3, 2026
This article uses official or primary sources for unstable payroll facts. The NSSF Year 4 rates were checked against the official notice to employers for 2026. The legal schedule was checked against Kenya Law's National Social Security Fund Act. PAYE deductions and relief context were checked against the KRA PAYE page. SHIF was checked against the Social Health Insurance regulations. The Affordable Housing Levy was checked against KRA's public notice on collection of the levy.
- NSSF Notice to Employers, Year 4 Contribution Rates 2026
- Kenya Law, National Social Security Fund Act
- Kenya Revenue Authority, PAYE guidance
- Kenya Revenue Authority, Affordable Housing Levy public notice
- Ministry of Health, Social Health Insurance Regulations 2024
Check Your Kenya Take-Home Pay
Use the Kenya PAYE calculator to estimate PAYE, NSSF, SHIF, housing levy and net salary with the current deduction stack.
Open Kenya PAYE Calculator →Frequently Asked Questions
The official Year 4 notice lists a Tier I lower earning limit of KES 9,000 and a Tier II upper earning limit of KES 108,000. The employee pays 6% and the employer matches 6%. The maximum employee contribution is KES 6,480, and the maximum combined monthly contribution is KES 12,960.
The NSSF notice says Year 3 rates ended on January 31, 2026 and the Year 4 contribution rates came into effect in February 2026.
Yes for normal payroll treatment. KRA lists contributions to registered pension, provident or individual retirement funds as deductible in determining taxable employment income, subject to the statutory limit. NSSF should therefore reduce taxable employment income before PAYE bands are applied.
From February 2026, the maximum employee contribution is KES 6,480 per month. That is KES 540 for Tier I plus KES 5,940 for Tier II. The employer pays the same amount separately.
No. NSSF is a retirement contribution. SHIF is the social health insurance contribution at 2.75% of gross salary or wage, and the Affordable Housing Levy is 1.5% from the employee plus 1.5% from the employer.