The National Social Security Fund (NSSF) has announced adjustments in contribution rates for year 2, aligning with the 3rd Schedule of the NSSF Act Cap 45 of 2013. This impacts both employers and employees significantly.
Furthermore, there’s an increment in the upper limit for Tier II contributions from 0.5% of the national average wage to 1%. These changes are set to be effective from February 9, 2024 payroll.
Key Changes
The revised lower limit for Tier I contributions has been increased to Ksh.7,000 from Ksh.6,000. Consequently, the deduction will now be Ksh.420, up from Ksh.360. Employers are mandated to match this contribution.
Furthermore, there’s an increment in the upper limit for Tier II contributions from 0.5% of the national average wage to 1%. These changes are set to be effective from February 9, 2024 payroll.
Implications for Employees
Employees will experience an increase in their monthly deductions towards NSSF contributions due to these adjustments. While this might mean a slight reduction in their take-home pay initially, it translates into enhanced social security benefits in the long run.
Implications for Employers
Employers are required to match employee contributions – hence an increase in their monthly expenses towards NSSF contributions.
The National Social Security Fund (NSSF) has announced adjustments in contribution rates for year 2, aligning with the 3rd Schedule of the NSSF Act Cap 45 of 2013. This impacts both employers and employees significantly.
Implications for Employees
Employees will experience an increase in their monthly deductions towards NSSF contributions due to these adjustments. While this might mean a slight reduction in their take-home pay initially, it translates into enhanced social security benefits in the long run.
The new deduction means that Kenyans earning more than Ksh.36,000 will see their NSSF deduction double from the current Ksh.1,080 to Ksh.2,160.
Implications for Employers
Employers will also be required to match the Ksh.2,160. The total money to be remitted to an employees NSSF account will be Ksh.4,320 – hence an increase in their monthly expenses towards NSSF contributions.
