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How 2025 payslips will look like for employees after increased NSSF deductions kick in
Kenyan employees and employers are set to experience a notable adjustment in salary deductions starting February 1, 2025, when the third phase of the National Social Security Fund (NSSF) contribution increase takes effect.
This increment is part of the phased implementation of the NSSF Act of 2013, designed to enhance retirement benefits for workers by gradually increasing contribution rates over five years.
Key Changes in Contribution Rates
The upcoming adjustment will raise the maximum monthly NSSF contribution for employees and employers to Sh4,320 each, totalling Sh8,640 monthly.
This is a significant increase compared to the current NSSF contributions for 2024, which stand at a maximum of Sh 2,160 per employee/employer.
How 2025 payslips will look like for employees after increased NSSF deductions kick in
40,000 salary example
Someone earning a monthly salary of Sh40,000 has been paying Sh2,160 to NSSF which is automatically deducted by the employer and remitted to the government. The employer is also obligated to match the contribution.
With the new rates coming into effect in February 2025, the new deductions will increase to Sh2,400, an increase of about 11%.
If you also factor in other deductions such as PAYE (Sh3,645), Housing Levy (Sh600), and Social Health Insurance Fund (SHIF) (Sh1,100), an employee will take home Sh32,255
50,000 salary example
Someone earning a monthly salary of Sh50,000 has been paying Sh2,160 to NSSF which is automatically deducted by the employer and remitted to the government. The employer is also obligated to match the contribution.
With the new rates coming into effect in February 2025, the new deductions will increase to Sh3,000, an increase of about 39%.
If you also factor in other deductions such as PAYE (Sh6,622), Housing Levy (Sh750), and SHIF (Sh1,375), an employee will take home Sh38,253
80,000 salary example
Someone earning a monthly salary of Sh80,000 has been paying Sh2,160 to NSSF which is automatically deducted by the employer and remitted to the government. The employer is also obligated to match the contribution.
With the new rates coming into effect in February 2025, the new deductions will increase to Sh4,320, an increase of about 100%.
If you also factor in other deductions such as PAYE (Sh15,555), Housing Levy (Sh1,200), and SHIF (Sh2,200), an employee will take home Sh56,725.
While the increase in NSSF contributions set for February 2025 will reduce immediate take-home salaries, the government aims to align contributions with modern economic realities and inflation, ensuring that employees save adequately for retirement.