NSSF Changes Taking Effect in February 2026: What Kenyans Need to Know

As Kenya ushers in February 2026, significant changes to the National Social Security Fund (NSSF) contribution structure will begin to shape the payslips of many formal-sector workers and employers across the country. These reforms are the fourth phase of a multi-year rollout of the NSSF Act, 2013, aimed at strengthening the country’s national pension system and boosting long-term retirement savings.

What Is Changing?

The central focus of the February 2026 changes is an adjustment to the earnings limits that determine how much of a worker’s salary is subject to mandatory pension contributions under NSSF.

Contribution rates remain the same:

Both employees and employers continue to contribute 6%each of pensionable pay – totalling 12% of qualifying earnings.However, the earnings bands used to calculate these contributions have increased significantly:

This change means that higher portions of income will now be subject to pension deductions, particularly affecting middle- and high-income earners.

How Contributions Will Be Calculated

Under the tiered structure:

• Tier I contributions apply to earnings up to KSh 9,000. Both employee and employer pay 6 % of this amount—equating to KSh 540 each per month.
• Tier II applies to income above KSh 9,000 and up to KSh 108,000. Here again, 6 % is charged on the difference between gross pay and the Tier I limit.

For example:

A worker earning KSh 100,000 monthly will pay KSh 540 under Tier I and KSh 5,460 under Tier II, totalling KSh 6,000. With the employer’s matching contribution, the pension savings for this employee rise to KSh 12,000 monthly.

At the top end, employees earning KSh 108,000 or more will contribute KSh 6,480 per month, with employers also contributing the same amount—bringing total monthly contributions to KSh 12,960.

Who Will Be Most Affected?

Middle- and high-income workers will feel the sharpest impact on their net pay. The increased upper earnings band means more of their salary falls into the part of income that attracts pension contributions.

For instance:

• Workers earning above ~KSh 100,000 will see their personal NSSF deduction increase from about KSh 4,320 to roughly KSh 6,480 per month—an extra ≈ KSh 2,160 taken off their take-home pay.
• Employees earning below around KSh 50,000 are largely unaffected, since their contributions already fall entirely within the lower earnings limits.

As a result, while many workers’ nets pay will shrink, their future retirement savings will grow significantly—a primary policy goal of the reforms.

Policy Context and Rationale

The phased reforms under the NSSF Act, 2013, aim to replace the old flat-rate provident scheme with a fully funded pension system that better reflects earnings, improves retirement adequacy, and expands coverage. Incremental increases to the earnings bands are designed to temper immediate cost shocks for employers and employees while building a larger, more sustainable pension pool.

Employer Considerations

Employers must update payroll systems to accommodate the new KSh 9,000 and KSh 108,000 bands for February 2026 and ensure compliance with reporting and remittance deadlines. They also retain the option to contract out Tier II contributions to approved private pension schemes, subject to regulation, which can provide flexibility in retirement benefit planning.

In summary, the February 2026 NSSF changes mark a major step in Kenya’s pension reform journey—boosting long-term retirement savings but requiring payroll adjustments and household budgeting as many workers experience higher mandatory pension deductions.