NSSF Contribution Changes February 2026: New Rates & Employer Impact

From 1 February 2026, employers and employees in Kenya will experience the next phase of changes to National Social Security Fund (NSSF) contributions, as part of the phased implementation of the NSSF Act, 2013. These changes build on the adjustments that took effect in 2023, 2024, and 2025 and are a continuation of the transition to an earnings-related pension system.

This article highlights what is changing, the practical impact on payroll and take-home pay, and what employers should do now to prepare.

In summary: In summary: From 1 February 2026, NSSF contributions in Kenya will increase for employees whose earnings fall within or above the expanded pensionable earnings bands. Contributions remain at 6% for employees and 6% for employers, applied to pensionable earnings up to the upper limit of KES 108,000.

Employees earning at or above this threshold will contribute up to a maximum of KES 6,480 per month, with employers matching this amount, resulting in a maximum total contribution of KES 12,960. Employees earning below the upper earnings limit will contribute less, based on their actual pensionable earnings.

NSSF Contribution Changes in Kenya Effective February 2026?

While the contribution rate remains unchanged, the pensionable earnings limits will increase, resulting in higher NSSF deductions. Effective 1 February 2026:

• Employee contribution: 6% of pensionable earnings
• Employer contribution: 6% (matching contribution)
• Lower Earnings Limit (Tier I): KES 9,000
• Upper Earnings Limit (Tier II): KES 108,000
• Maximum employee contribution: KES 6,480 per month
• Maximum total contribution (employee + employer): KES 12,960 per month

Compared to 2025, this represents a notable increase from the previous maximum employee contribution of KES 4,320.

How the February 2026 NSSF Changes Affect Employees and Employers

a) Impact on Employees

• Reduced take-home pay, particularly for middle- and higher-income earners.
• Employees earning at or above the upper earnings limit will see an increase of up to KES 2,160 per month in NSSF deductions compared to 2025.
• Lower-income employees may experience minimal or no change, depending on their salary levels.

While net pay may reduce, employees will benefit from higher long-term retirement savings credited to their NSSF /Pension accounts.

b) Impact on Employers

• Higher payroll costs due to increased matching contributions.
• The cost impact is more pronounced for employers with a large number of employees earning above the lower earnings limit.
• Employers must ensure accurate computation and timely remittance to avoid penalties and interest.

c) Impact on Payroll Administration

• Payroll systems must be updated and tested before February 2026.
• Errors in configuration may lead to under- or over-deductions, employee dissatisfaction, and compliance risk.
• HR and finance teams will face increased queries from employees once the changes reflect on payslips.

What Employers Must Do to Comply with NSSF Changes in 2026

a) Update Payroll Systems Early

Ensure your payroll software or outsourced payroll provider has:

• Updated Tier I and Tier II earnings limits
• Correct contribution caps
• Proper reporting and remittance configuration

Early testing (January 2026 payroll runs) is strongly recommended.

b) Communicate Clearly with Employees

One of the biggest risks around statutory changes is poor communication. Employers should:

• Issue a staff communication or circular explaining:
  • What is changing
  • Why net pay may reduce
  • The long-term pension benefit
• Prepare HR teams to respond consistently to employee questions
• Avoid surprises on February payslips

Clear communication helps manage expectations and maintain employee trust.

c) Review Pension Structure and Tier II Options

Employers with occupational pension schemes should:

• Review whether their schemes meet the criteria for Tier II contracting-out and align to ensure the cost benefit is realized.
• Confirm current approvals and compliance status
• Assess cost and benefit implications for both the employer and employees

This review is particularly important for employers with higher-paid staff.

d) Factor the Changes into 2026 Budgets

Employers should incorporate:

• Increased statutory costs into payroll and HR budgets
• The cumulative effect of multiple statutory deductions when planning remuneration reviews and increments

Key Takeaway

The February 2026 NSSF changes do not introduce new contribution rates, but the expanded pensionable earnings band significantly increases both employee deductions and employer costs. Employers who plan early, update systems on time, and communicate clearly will be best positioned to manage the transition smoothly.

How MGK Consulting Can Help

MGK Consulting supports employers with:

• Payroll impact analysis
• Outsourced payroll solutions
• Payroll system solution with ESS portal
• Employer on Record Services

For support ahead of February 2026, please contact us via enquires@mgkconsult.co.ke

MGK Consulting is a professional services firm providing payroll, tax, audit, and employer compliance advisory services in Kenya.

Frequently Asked Questions on NSSF Changes February 2026