Kenyan payslips are set for another adjustment in early 2026, as the government proceeds with the phased rollout of the National Social Security Fund (NSSF) Act of 2013. This next stage will increase the amount of salary subject to mandatory pension deductions, impacting the monthly net pay for a significant portion of the workforce.

The core of the change is not a new tax, but an expansion of the pensionable earnings limits, a move designed to bolster Kenyans' retirement savings. For many workers, particularly those in higher income brackets, this means a larger slice of their salary will be channeled towards their pension, resulting in less disposable income each month. The adjustments are scheduled to take effect from the February 2026 payroll.

How the Numbers Will Change

The NSSF contribution remains 6% from the employee, with the employer matching it for a total of 12%. However, the goalposts for calculating this percentage are moving. The system is divided into two tiers:

• Tier I (Lower Earnings Limit): This mandatory portion, which must be remitted to the NSSF, will be based on a new limit of KES 9,000, up from the current KES 8,000. This results in a monthly deduction of KES 540 from the employee, with the employer contributing an equal amount.
• Tier II (Upper Earnings Limit): This is where the most significant change lies. The upper limit will jump from KES 72,000 to KES 108,000. This means earnings above KES 9,000 and up to KES 108,000 will now be subject to the 6% deduction.

For an employee earning KES 108,000 or more, the maximum monthly contribution will rise from KES 4,320 to KES 6,480—a KES 2,160 reduction in their gross pay. When the employer's matching contribution is included, the total amount saved for retirement for these top earners will be KES 12,960 per month.

The Impact on Your Pocket

The effect of these changes will vary depending on salary bands. Workers earning below KES 50,000 a month are unlikely to see any significant change, as their earnings already fall within the current contribution thresholds.

The squeeze will be felt by middle and high-income earners. For instance, an employee with a salary of KES 80,000, who currently contributes KES 4,320, will see their deduction rise to KES 4,800, a drop of KES 480 in their take-home pay. It is important to note, however, that NSSF contributions are tax-deductible. This means the actual impact on net pay will be slightly softened; for a top earner, the reduction in their final take-home amount will be closer to KES 1,512 rather than the full KES 2,160.

These reforms are aimed at improving long-term pension adequacy and boosting national savings. However, critics have raised concerns about the timing, arguing that the increased deductions add another layer of financial strain on salaried workers already contending with high inflation and multiple taxes. The changes reignite the national conversation on balancing immediate financial pressures with the necessity of securing a stable retirement future.