Kenyan workers brace for another squeeze on their monthly earnings as higher National Social Security Fund (NSSF) contributions are set to take effect from February 1, 2026.

This marks the fourth year of the phased implementation of the NSSF Act of 2013, a government initiative designed to bolster the nation's retirement savings. The change doesn't introduce a new tax but expands the portion of an employee's salary subject to the mandatory 6% deduction, which is matched by the employer. For thousands of salaried Kenyans, this means a smaller pay packet at a time when households are already navigating a high cost of living, stagnant real wages, and other statutory deductions.

How Your Pay Will Change

The upcoming adjustment hinges on raising the pensionable earnings limits. While workers earning less than KES 50,000 per month will be largely unaffected, the impact will be significant for those with higher incomes.

The new structure is defined by two key changes:

• Tier I (Lower Earnings Limit): This will increase from KES 8,000 to KES 9,000. The mandatory contribution on this portion will be KES 540 from the employee, matched by the employer.
• Tier II (Upper Earnings Limit): This will see a substantial jump from the current KES 72,000 to KES 108,000.

For a mid-level employee earning KES 100,000, their monthly contribution will rise from KES 4,320 to KES 6,000. Top earners making KES 108,000 or more will see their personal deduction increase from KES 4,320 to a new maximum of KES 6,480. When the employer's matching portion is included, the total monthly retirement saving for a top earner will reach KES 12,960.

The Balancing Act: Today's Bills vs. Tomorrow's Security

The government and trade unions argue that these enhanced contributions are critical for the country's future. The goal is to move away from the previous system's inadequate lump-sum payouts and ensure retirees have a more sustainable income. NSSF Managing Trustee David Koros has previously stated that the fund's growth, projected to surpass KES 600 billion by 2026, is essential for providing Kenyans with a decent pension.

The Central Organisation of Trade Unions (COTU) has consistently supported the implementation, framing it as a necessary savings mechanism. Union leaders have emphasized that the contributions are a saving, not a tax, designed to protect workers from old-age poverty.

However, the timing of the increase has drawn criticism. Labour experts and employer groups warn that the move will deepen the financial strain on salaried workers already contending with high inflation and other levies. The Federation of Kenya Employers (FKE) has been vocal about the rising cost of doing business and the burden on employees. In a recent statement, FKE Executive Director Jacqueline Mugo noted that employees can no longer bear additional deductions from their payslips, urging the government to focus on fiscal responsibility rather than increasing payroll burdens.

While the deductions are tax-deductible—meaning the actual hit on net pay for a top earner is closer to KES 1,512 rather than the full KES 2,160 increase—the reduction in disposable income is undeniable. This comes as many households are already cutting back on non-essential spending. As the 2026 deadline approaches, the debate intensifies, highlighting the difficult trade-off between securing a dignified retirement and affording the present.