NSSF contributions under the new rates: who pays what
NSSF contribution rates changed sharply when the NSSF Act, passed years before, finally came into force after a long court case. For most workers the change showed up on the payslip as a much larger deduction, and many people still do not know why it is larger, why it keeps rising, or what it buys them.
This article explains how the contribution is worked out, how Tier I and Tier II split it, why the amount grows each year during the phase-in, what the self-employed can do, and what happens when an employer does not file or pay. The exact limits change each year, so check the current ones with NSSF.
How NSSF contribution rates are worked out
Under the old system, every employee paid the same small flat amount, matched by the employer. It was simple, but it bought very little retirement income. The NSSF Act replaced the flat amount with a percentage of pensionable earnings: the employee pays 6% and the employer pays another 6%, so 12% in all goes to the employee's account.
The percentage does not apply to every shilling of salary. It applies only up to an upper earnings limit. Above that limit, no further NSSF contribution is charged, so a manager and a senior executive above the limit pay the same amount.
Pensionable earnings are not exactly the same as basic salary. Some allowances count, others do not. Your payslip shows the amount used, and your employer should be able to explain how it was arrived at if it looks wrong.
People with more than one employer pay through each payroll on the pay from that job. That can mean contributions on both, and both count towards your account, so keep payslips from every job and check that each employer shows up on your statement.
Because the contribution is a percentage up to a ceiling, two people with the same job title can pay different amounts if their pay differs, and the same person pays more after a raise, up to the ceiling. That is the design: contributions grow with earnings, so retirement benefits grow too.
Tier I, Tier II and the yearly increases
The contribution is split into two tiers. Tier I is the 6% plus 6% on earnings up to a lower earnings limit. Every employee pays Tier I to NSSF. Tier II is the 6% plus 6% on earnings between the lower and upper limits.
Employers who run a registered occupational pension scheme of a sufficient standard may apply to send the Tier II part to that scheme instead of NSSF. This is called contracting out. If your employer has contracted out, your payslip still shows Tier II, but it goes to the company scheme rather than NSSF.
The Act phases in the limits over several years. Each year the lower and upper earnings limits rise until they reach their final levels, which are tied to average earnings. This is why many people saw their NSSF deduction rise again a year after the first jump, and why it may rise again before the phase-in ends.
The phase-in also matters for employers' budgets. Each increase in the limits raises the employer's share as well as the employee's, and small businesses that set wages without allowing for it are sometimes caught short in the month the new limits apply. Planning for the change avoids late payments.
For employees on modest pay, below the lower limit, only Tier I applies, so their deduction is 6% of their pensionable pay. For employees above the upper limit, both tiers are at their maximum and the deduction is the same as anyone else above the ceiling.
Self-employed people and voluntary contributions
Self-employed people are not covered by an employer, so nobody deducts NSSF for them. They can still join and save with NSSF voluntarily, paying in amounts that suit them, including small and irregular amounts through mobile money. The aim is to let farmers, traders and other informal workers build retirement savings in the same system as employees.
Voluntary contributions are flexible, but they only add up if they are regular. A small amount saved every week or month over many years becomes meaningful by retirement, while occasional large payments often stop. Treat it like a savings plan with a fixed day.
Registration is the first step for anyone, employed or not. You need an NSSF number linked to your ID before any contribution can be credited to you. Our NSSF member registration service registers you and sends you your number.
Your contributions are not lost if you stop working. They stay in your account and continue to earn returns until you qualify for benefits, which are paid on retirement age and in some other cases set out in the Act, such as permanent invalidity, or to dependants after a member's death.
People who move between jobs and self-employment should keep using the same NSSF number. Your contributions from every employer and every voluntary payment are meant to sit in one account. Registering again under a new number splits your savings and makes claiming harder.
Monthly returns and what happens when they are missed
Employers must file a monthly return with NSSF listing each employee and their contributions, and pay the total by the due date the following month. The return is what credits each employee's account; payment without a correct return, or a return without payment, leaves employees short.
Late returns and late payments attract penalties for the employer. More importantly for employees, months that were deducted from pay but never remitted are missing from their statement. You can check your NSSF statement through the NSSF online services and app. If deductions on your payslip do not appear, raise it with your employer and, if it is not fixed, with NSSF.
Small employers often fall behind because returns feel like paperwork with no deadline pressure. Keeping them current protects the business from penalties and its staff from gaps. Our NSSF monthly returns service files them for you each month.
NSSF is one part of your social protection. Health cover through SHA is separate and works differently; our guide on SHA vs NHIF explains it.
Common questions
Why did my NSSF deduction go up again?
The earnings limits rise each year during the phase-in under the NSSF Act, so the amount deducted on the same salary increases until the final limits are reached.
Does my employer pay anything?
Yes. The employer pays the same amount as the employee, so your account receives double what is deducted from your pay.
Can I see my contributions?
Yes. Your NSSF statement is available through the NSSF online services and app. Check it against your payslips from time to time.
I am self-employed. Do I have to pay?
It is voluntary for the self-employed, but you can join and save regularly in amounts that suit you.
What is contracting out?
An employer with a qualifying pension scheme can send the Tier II part of contributions to that scheme instead of NSSF. Tier I always goes to NSSF.
I have two NSSF numbers. What should I do?
Ask NSSF to merge them so all your contributions sit in one account. Keep using one number from then on and give that number to every employer.
Official sources