The National Social Security Fund (NSSF) contributions in Kenya are determined by the NSSF Act of 2013, which introduced new contribution rates to replace the flat-rate contributions previously in use.
These contributions are tiered and based on an employee’s monthly gross salary.
Here’s how NSSF is calculated:
How to Calculate NSSF Contributions in Kenya for a Gross Pay of Ksh 50,000
Calculating your National Social Security Fund (NSSF) contributions is essential to understanding your monthly deductions.
With the implementation of the revised NSSF rates starting on February 1st, 2025, the total contributions have literally doubled.
Here’s a breakdown to help you calculate your contributions, especially if you earn a gross pay of Ksh 50,000.
Understanding NSSF terms
To calculate your contributions, it’s important to know two key terms:
- Lower Earnings Limit (LEL): This is the minimum portion of your gross salary considered for contributions. For 2025, it is set at Ksh 8,000.
- Upper Earnings Limit (UEL): This is the maximum portion of your gross salary eligible for contributions. For 2025, it is set at Ksh 72,000.
Breaking down pensionable earnings
Your gross pay is divided into two tiers for NSSF contributions:
- Tier I: Covers earnings up to the LEL (Ksh 8,000).
- Tier II: Covers the remaining portion of your salary up to the UEL. For a gross pay of Ksh 50,000, Tier II will cover Ksh 42,000 (Ksh 50,000 – Ksh 8,000).
The tiers are just a guide, since the contribution will still remain to be 6% of gross salary, capped for your tier.
How to Calculate Contributions
For both tiers, contributions are based on 6% of your earnings. Here’s how it works:
| Tier | Earnings Covered | Employee Contribution (6%) | Employer Contribution (6%) | Total Contribution |
| Tier I | Ksh 8,000 | Ksh 480 | Ksh 480 | Ksh 960 |
| Tier II | Ksh 42,000 | Ksh 2,520 | Ksh 2,520 | Ksh 5,040 |
| Total | Ksh 50,000 | Ksh 3,000 | Ksh 3,000 | Ksh 6,000 |
Step-by-step Example for Gross Pay of Ksh 50,000
Calculate Tier I contributions:
- Employee contributes 6% of Ksh 8,000 = Ksh 480.
- Employer matches this amount with Ksh 480.
- Total contribution for Tier I = Ksh 960.
Calculate Tier II contributions:
- Employee contributes 6% of Ksh 42,000 = Ksh 2,520.
- Employer matches this amount with Ksh 2,520.
- Total contribution for Tier II = Ksh 5,040.
Add the two tiers to get the total monthly contribution:
- Employee’s total = Ksh 3,000.
- Employer’s total = Ksh 3,000.
- Combined total = Ksh 6,000.
Or just do 6% of your Gross Income
As I mentioned, breaking down your gross income to tiers doesn’t really change your earnings. For Instance, 6% of 50,000 is 3,000. Which brings total contribution to 6,000.
Same thing.
Why NSSF Contributions Matter
Your NSSF contributions are retirement savings aimed at securing your future.
These deductions may seem significant, but they directly contribute to your pension upon retirement.
Moreover, since the contributions are deducted before tax, they lower your taxable income, which can reduce the overall tax you pay.
Key Changes to Remember in 2025
The revised rates under the NSSF Act 2013 are part of a phased plan to increase the contributions.
- Employers must match your contributions.
- Contributions are capped by the UEL of Ksh 72,000.
- These contributions are now higher than the old flat rate of Ksh 200.
Impact on Different Salary Scales
Here’s how the new NSSF contributions will affect employees across various salary scales, with employers matching the contributions:
| Salary (Kshs.) | Current Deduction (Kshs.) | New Deduction (Kshs.) | Total Contribution (Employer + Employee) KES |
|---|---|---|---|
| 5,000 | 300 | 300 | 600 |
| 10,000 | 600 | 600 | 1,200 |
| 14,000 | 840 | 840 | 1,680 |
| 18,000 | 1,080 | 1,080 | 2,160 |
| 20,000 | 1,080 | 1,200 | 2,400 |
| 25,000 | 1,080 | 1,500 | 3,000 |
| 30,000 | 1,080 | 1,800 | 3,600 |
| 36,000 | 1,080 | 2,160 | 4,320 |
| 40,000 | 1,080 | 2,400 | 4,800 |
| 50,000 | 1,080 | 3,000 | 6,000 |
| 60,000 | 1,080 | 3,600 | 7,200 |
| 72,000 | 1,080 | 4,320 | 8,640 |
| 80,000 | 1,080 | 4,320 | 8,640 |
| 100,000 | 1,080 | 4,320 | 8,640 |
Notes:
- Employer’s Contribution matches the employee’s deduction.
- Total Contribution = Employee’s Deduction + Employer’s Deduction.
- For salaries exceeding Kshs. 72,000, the total contribution is capped at Kshs. 8,640.
Final Thoughts
By understanding how to calculate your contributions, you can track your deductions and ensure compliance.
For more details, visit the official NSSF website.
Stay informed about the changes, as they are designed to improve your financial security in retirement.
If you earn more than Ksh 72,000, the calculations follow a similar process, capped at the UEL.
