Effective February 1, 2026, the mandatory pension contribution base will expand, hitting high-earners with monthly deductions of up to KSh 6,480. While the 6% contribution rate remains unchanged, the revised “Earnings Limits” mean a larger portion of your gross salary is now subject to NSSF deductions.
The New 2026 NSSF Structure: Tier I and Tier II
The NSSF Act uses a two-tier system to calculate your savings. In 2026, both the “Lower Limit” (Tier I) and “Upper Limit” (Tier II) will rise to reflect updated national average earnings.
| Category | 2025 Limit (Current) | Feb 2026 Limit (New) | Max Monthly Deduction | | Tier I (Lower Limit) | KSh 8,000 | KSh 9,000 | KSh 540 | | Tier II (Upper Limit) | KSh 72,000 | KSh 108,000 | KSh 5,940 | | Total Max Deduction | KSh 4,320 | KSh 6,480 | KSh 6,480 |
How Much Will You Lose? (Salary Examples)
The impact on your pay slip depends heavily on your gross income. Those earning below KSh 50,000 will see little to no change, while those earning six figures will face the sharpest drop in net pay.
- Low Earner (KSh 15,000 gross): Your deduction remains KSh 900 (6% of salary). No change from 2025.
- Mid-Level (KSh 80,000 gross): Currently, you pay KSh 4,320. In February 2026, your deduction rises to KSh 4,800—a KSh 480 reduction in net pay.
- High Earner (KSh 108,000+ gross): Currently capped at KSh 4,320. From February 2026, you will pay the full KSh 6,480—slashing your net monthly pay by KSh 2,160.
The “Matching” Benefit and Tax Relief
While the deduction feels like an immediate loss, it’s important to note two things:
- Employer Matching: For every shilling you contribute, your employer adds an equal amount. A top earner will have KSh 12,960 credited to their retirement account monthly.
- Tax Shield: NSSF contributions are tax-deductible. This means the actual reduction in your final take-home pay is closer to KSh 1,512 for top earners, as the contribution lowers your taxable income.
Contracting Out of Tier II
Employers still have the option to “contract out” of Tier II contributions. If your company has a private pension scheme approved by the Retirement Benefits Authority (RBA), they can petition to remit the Tier II portion (anything above KSh 540) to that private scheme instead of the NSSF. However, Tier I must always be paid to the NSSF.
Deadline for Employers
All employers must update their payroll systems before the February 2026 cycle. Failure to remit the new amounts by the 9th day of every month will attract a 5% monthly penalty on the total unremitted contributions.
