NSSF Kenya Tier I and Tier II Explained: Kenya’s NSSF pension contributions are divided into earnings bands known as Tier I and Tier II. Understanding how these bands work helps employers calculate deductions, account for the employer’s share and apply the correct contribution schedule. Public information available in 2026 contains different schedules following court proceedings, so payroll teams should verify the current instructions before making changes.
Important 2026 rate-check notice
NSSF’s official website still displays its Year 4 (2026) schedule effective from February 2026. A later media report describing an NSSF press release says different rates were announced following court proceedings. Because these published figures conflict, confirm the contribution schedule currently applicable to your payroll directly with NSSF before changing deductions or publishing rate figures. This article distinguishes the schedules rather than presenting them as interchangeable.
In this guide
What Is NSSF in Kenya?
The National Social Security Fund (NSSF) is Kenya’s statutory social security institution. It collects contributions intended to support members’ social security and retirement benefits. For employees on payroll, NSSF contributions are normally accounted for each pay period and remitted by the employer in line with the applicable requirements.
NSSF is separate from PAYE income tax. PAYE is income tax deducted from taxable employment income, while NSSF contributions are pension-related statutory contributions. Both can appear on a payslip, but they serve different purposes and should be calculated and reported separately.
NSSF Kenya Tier I and Tier II Explained: Key Differences
Tier I and Tier II refer to different portions of pensionable earnings under a tiered contribution structure. The applicable earnings limits and rates depend on the legal and operational schedule in force.
- Tier I: the first defined band of pensionable earnings.
- Tier II: the next defined band of pensionable earnings above Tier I, up to the applicable upper limit.
- Employee contribution: the amount deducted from the employee’s pay under the applicable rules.
- Employer contribution: the employer’s separate contribution. Do not deduct the employer’s share from the employee’s salary.
The tier names are not enough to determine the amount to deduct. Payroll teams must use the correct earnings limits, rate, pay period and current NSSF instruction.
NSSF Tier I and Tier II Rates in Kenya: What the 2026 Sources Say
The official NSSF Year 4 notice, posted on 18 February 2026, says the Year 4 schedule took effect in February 2026. It lists a lower earnings limit of KSh 9,000 and an upper earnings limit of KSh 108,000, with a 6% employee contribution and a matching 6% employer contribution within the schedule.
| Year 4 schedule item | Employee share | Employer share |
|---|---|---|
| Tier I maximum (first KSh 9,000) | KSh 540 | KSh 540 |
| Tier II maximum (up to KSh 108,000 upper limit) | KSh 5,940 | KSh 5,940 |
| Maximum monthly contribution shown in the notice | KSh 6,480 | KSh 6,480 |
Source: NSSF’s official Year 4 (2026) employer notice. These are the figures in that published schedule; see the important rate-check notice above before applying them to a current payroll.
A later report describes a different contribution schedule
A later NTV report describing an NSSF press release says Tier I contributions were KSh 360 from the employee and KSh 360 from the employer, while Tier II contributions were KSh 720 from each. It reports a combined employee-and-employer contribution of KSh 2,160. This differs from the February Year 4 schedule above.
Because NSSF’s publicly accessible website continues to show the February Year 4 notice and the later report describes a change associated with court proceedings, do not mix the figures from these schedules. Employers should confirm the currently accepted return and payment amounts through NSSF’s official employer channels and keep a record of the guidance received.
How Are NSSF Tier I and Tier II Contributions Calculated?
Use the following process once the applicable schedule has been confirmed:
- Confirm the payroll month and the NSSF contribution schedule applicable to that period.
- Identify the employee’s pensionable earnings under the applicable rules.
- Apply the Tier I earnings band and rate.
- Apply the Tier II band and rate, where applicable, up to the relevant limit.
- Calculate the employee’s share and the employer’s share separately.
- Show the employee contribution on the payslip and account for the employer contribution as an employer cost.
- Reconcile the payroll totals against the NSSF return and payment records.
Do not use an old online calculator or a previous month’s settings without checking whether the rates and limits have changed. Where the published guidance conflicts, request confirmation from NSSF before finalizing the payroll run.
Illustrative Example: Why the Applicable Schedule Matters
Assume an employee’s pensionable earnings fall at or above the maximum earnings bands under each of the schedules described above. The resulting figures would differ significantly:
| Schedule described in source | Employee maximum | Employer maximum | Combined |
|---|---|---|---|
| Official February Year 4 notice | KSh 6,480 | KSh 6,480 | KSh 12,960 |
| Later schedule reported by NTV | KSh 1,080 | KSh 1,080 | KSh 2,160 |
This comparison illustrates the discrepancy between the two sources; it is not a recommendation to choose either schedule without confirmation from NSSF.
Employer Responsibilities and Common NSSF Payroll Mistakes
Employers should keep employee details accurate, use the correct contribution schedule for the payroll period, calculate employee and employer shares separately, file returns through the accepted NSSF process and retain proof of remittance.
- Using contribution limits from an outdated notice.
- Applying one schedule in the payroll system and a different schedule in the NSSF return.
- Deducting the employer’s share from an employee’s salary.
- Failing to reconcile payslips, payroll reports and remittance records.
- Changing statutory settings without recording the effective date and source.
- Relying on unofficial social posts or calculators without checking NSSF guidance.
NSSF’s February 2026 Year 4 notice states that remittances should be made by the ninth day of the subsequent month. Since instructions and legal developments can change, confirm the deadline and process applicable to the relevant contribution period directly with NSSF.
How Payroll Software Can Help Manage NSSF Contributions
Payroll software helps teams maintain employee earnings records, organize deductions, produce payslips and reconcile payroll reports. The software settings still need to reflect the applicable official requirements, and payroll teams should review statutory changes before processing pay.
Wagemaster Payroll & HR Software helps businesses manage payroll information, employee earnings, deductions, payslips and reports in a structured workflow. Explore the product and available resources below.
Make Payroll Management Easier with Wagemaster
Organize payroll records, employee deductions and reporting with a solution built for business payroll workflows.
Official References and Further Reading
- NSSF Kenya — Notice to Employers: Year 4 (2026) NSSF Contribution Rates. Official February 2026 schedule and remittance reminder.
- NSSF Kenya — Clarification on the Status of NSSF Contributions. Official June 2026 statement on the status of contributions.
- NTV Kenya — NSSF Releases New Contribution Rates. Media report describing a later NSSF press release.
- Kenya Law. Consult relevant judgments and legislation for legal developments.
