Starting February 1, 2025, significant changes to the National Social Security Fund (NSSF) contributions will take effect in Kenya, as outlined in the NSSF Act of 2013. Both employees and employers will now contribute 6% of the employee’s pensionable earnings, marking a substantial shift from previous rates.

Understanding the New Contribution Structure

The NSSF Act, 2013, introduces defined Lower Earnings Limit (LEL) and Upper Earnings Limit (UEL) thresholds over a phased four-year period. As we enter the third year of this implementation, the limits are adjusted as follows:

• Lower Earnings Limit (LEL): Increased from Ksh 7,000 to Ksh 8,000.
• Upper Earnings Limit (UEL): Increased from Ksh 36,000 to Ksh 72,000.

Implications for Employees and Employers

The new contribution rates are structured into two tiers:

1. Tier I Contributions:
   • Applicable Earnings: Up to the LEL of Ksh 8,000.
   • Employee Contribution: 6% of Ksh 8,000 = Ksh 480.
   • Employer Contribution: Matches employee’s contribution with Ksh 480.
   • Total Monthly Contribution for Tier I: Ksh 960.
2. Tier II Contributions:
   • Applicable Earnings: Earnings between the LEL (Ksh 8,000) and the UEL (Ksh 72,000).
   • For Employees Earning Above Ksh 72,000:
     • Employee Contribution: 6% of (Ksh 72,000 – Ksh 8,000) = Ksh 3,840.
     • Employer Contribution: Matches employee’s contribution with Ksh 3,840.
     • Total Monthly Contribution for Tier II: Ksh 7,680.

Total Contributions:

• For Employees Earning Up to Ksh 8,000:
  • Total Monthly Contribution: Ksh 960 (Ksh 480 from employee + Ksh 480 from employer).

• For Employees Earning Ksh 72,000 and Above:
  • Total Monthly Contribution: Ksh 8,640 (Ksh 4,320 from employee + Ksh 4,320 from employer).

It’s important to note that for employees earning above Ksh 72,000, the contributions are capped at the UEL, resulting in a maximum total monthly contribution of Ksh 8,640.

Compliance and Deadlines

Employers are required to remit the combined contributions (both employee and employer portions) to the NSSF before the 9th day of the following month. Timely compliance is crucial to avoid potential penalties and ensure that employees’ retirement savings are accurately accounted for.

How Juma Auditors Can Assist

Navigating these changes can be complex for both employers and employees. At Juma Auditors, we offer comprehensive services to ensure seamless compliance with the new NSSF regulations:

• Payroll Management: Accurate calculation and timely remittance of NSSF contributions.
• Compliance Advisory: Guidance on adhering to statutory requirements to avoid penalties.
• Employee Education: Informative sessions to help your staff understand the impact of these changes on their net earnings and future benefits.

By partnering with Juma Auditors, you can ensure that your organization remains compliant with the updated NSSF contribution framework, thereby securing your employees’ futures and maintaining smooth operational workflows.

For personalized assistance and more information on how these changes affect your business, please contact us:

• Phone: +254 725 948 551
• Email: info@jumaauditors.co.ke
• Website: www.jumaauditors.co.ke

Stay informed and compliant with Juma Auditors—your trusted partner in financial excellence.