EXPLAINER: How new NSSF contributions will affect your salary in 2026

Starting February 1, 2026, formally employed Kenyans will feel another squeeze on their payslips as the National Social Security Fund (NSSF) enters Year 4 of the long-phased implementation of the NSSF Act, 2013. 

The change does not introduce a new tax or a higher contribution rate, but it expands the portion of salaries that is subject to mandatory pension deductions, meaning many workers will take home less each month.

Under the law, NSSF contributions are calculated at six per cent of pensionable earnings and are split equally between the employee and the employer. 

What determines how much of your salary is pensionable are two benchmarks known as the lower limit and the upper limit. Both are set to rise in 2026.

The lower limit, also called Tier I, will increase from Sh8,000 to Sh9,000. This portion is compulsory and must be remitted to NSSF by all employers. 

Six per cent of Sh9,000 translates to a mandatory employee contribution of Sh540, with the employer adding an equal amount. This applies to every worker earning Sh9,000 or more.

The bigger change is in the upper limit, or Tier II, which will jump from Sh72,000 to Sh108,000. This figure is pegged at three times the national average earnings and effectively raises the ceiling on how much of a salary can be subjected to NSSF deductions. 

With the higher cap, higher-earning employees will now contribute six per cent on a much larger slice of their income.

For low- and middle-income earners, the impact will be minimal or nonexistent. Someone earning Sh15,000 a month will continue to contribute six per cent of their salary, which is Sh900, the same amount they pay today. 

A worker earning Sh50,000 will also see no change, continuing to remit Sh3,000 monthly. This is because their full salary already falls within the pensionable limits, both before and after the 2026 adjustment.

The difference becomes clear for higher earners. An employee earning Sh80,000 currently contributes Sh4,320, which is six per cent of the current upper limit of Sh72,000. 

From February 2026, six per cent will be applied to a higher limit, raising their contribution to Sh4,800. 

That translates to Sh480 less in monthly take-home pay. For those earning Sh108,000 or more, the maximum employee contribution will rise sharply from Sh4,320 to Sh6,480, cutting net pay by Sh2,160 every month. 

When the employer’s matching portion is included, a total of Sh12,960 will be set aside monthly for retirement for workers at this level.

As Kenya continues to fully roll out the NSSF Act more than a decade after it was passed, Year 4 marks another step toward higher mandatory retirement savings. 

For high earners especially, February 2026 will come with a noticeable payslip adjustment, reigniting the debate over the balance between present-day affordability and long-term financial security.