NSSF Pension Contribution Calculator

How Much Do I Put In My NSSF Pension?

The National Social Security Fund (NSSF) is undoubtedly Kenya's primary provider of social security. Under the National Social Security Act of 2013, both employed and the self employed and their dependants qualify as contributing members. The law on pension requires all Kenyans that are above the age of eighteen to register to the program. However, you probably aren't acquainted adequately with the new NSSF member contributions (Act 2013) and the new NSSF rates and how to calculate pension funds up for remitting to the national pension scheme.

The repealed National Social Security Fund Act Cap 255 was created in 1962 and served the program until 2013. It required every formally employed worker in Kenya to have a mandatory Social Security Provident Fund. Benefits also used to be paid out in a single lump sum.  In contrast, the new NSSF Act 2013 includes the self employed (voluntary contributors) and their dependants as contributing members who will have their remits deposited in a newly created account - New Provident Fund. Contribution by the formally employed is still mandatory and these funds will be deposited into respective individuals' Pension fund. The pension Act also introduces new employer and employee deduction rates, and will no longer offer benefits in one-off payouts anymore. Instead, workers will receive monthly amounts to savoir their post-retirement life.  Note that while the mandatory Pension Fund will payout pensions to members monthly, the new Provident Fund will allow lump sum payouts.

In the event that a contributing member dies, their spouse shall take up the benefits. Where a spouse is unavailable, the children, or parents, or siblings (in that order of preference) shall be accorded the benefits.

The purview of NSSF contributions is to gift members with the fruits of their youth labour many years after they retire from active employment, are elderly or invalidated by circumstances to continue working. With this in mind, the following table summarizes NSSF benefits to contributing members.

  • Self Employed/Voluntary Contributors 
  • According to Section 23 of the NSSF Act No. 43 of 2013, self employed (voluntary contributors) shall make minimum contributions of KSh 200 per month or Ksh4, 800 annually. Members can decide whether to deposit more than this amount, but the above are the minimum aggregate contributions required of any voluntary contributor. 

  • Employer deductions
  • Under Section 19, employers who have a contract of service with their employee(s) in place are required to register as contributing members. New NSSF member contributions should be computed as 12% of the employees' total earnings. Out of this, employers shall remit half (6%) of their employees' pensionable salary or wages— gross earnings. 

    Employers are required to ensure every one of their workers including daily paid workers are registered with NSSF and to deposit the correct amounts before the 15th day of each month. Late remits for each employee shall attract a 5% penalty, accruing along the time funds remain un-deposited into the pension fund. 

    Employers can opt to offer a private pension scheme and upon request to the NSSF, shall have all funds transferred to their desired fund within sixty (60) days. 

  • Employee deductions
  • The other 6% will be deductable from the employees' own gross earnings. This is regardless of whether the employee is a casual worker and is paid daily, or has a long-term contract of service with their employer (contracted or permanent). NSSF contribution rates are set to continuously increase in the coming consecutive 6 years.

    Also required is for every employee to regularly update their personal details as changes arise. This could be in form of entrance of new family members (dependants), a new employer or changes in earnings, etc. 

    NSSF Tiers

    The law on pensions also specifies two types of tiers: Tier I and Tier II. 

    1. Tier I 
    2. This applies to low income earners. This is defined as the "Lower Earnings Limit", which shall be based on Kenya's minimum wage--to be revised and determined by the relevant authorities such as the Cabinet Secretary to the Ministry of Labour and Social Security Services. Tier I contributions to the NSSF are mandatory. 

    3. Tier II
    4. As for Tier II, contributions to the NSSF are not mandatory. Also, the funds to this tier can be contributed to a private pension scheme as long as one's employer is approved to offer an out-of-NSSF scheme by the Retirement Benefits Authority (RBA). However, in the event that an employee retired early or left employment, they'll need to transfer the funds to NSSF (or another scheme approved to receive Tier II contributions) to benefit. The portion amount paid shall be determined under RBA guidelines. 

    Learn the details about the lower and upper earnings limit applicable in the first four years of the Act's operation in the table below. Upper earnings limit are the average earnings by an employee as defined by the Kenya National Bureau of Statistics' Economic Survey report for the previous year. 

    Scenario Employee Earnings Pensionable Earnings Tier I Pensionable Earnings Tier I Employee Deduction Tier I Employer Contribution Tier I Total Contribution Tier II Pensionable Earnings Tier II Employee Deduction Tier II Employer Contribution Tier II Total Contribution Total Pension Contribution
    1 3,000 3,000 3,000 180 180 360 360
    2 4,500 4,500 4,500 270 270 540 540
    3 6,000 6,000 6,000 360 360 720 720
    4 10,000 10,000 6,000 360 360 720 4,000 240 240 480 1,200
    5 14,000 14,000 6,000 360 360 720 8,000 480 480 960 1,680
    6 18,000 18,000 6,000 360 360 720 12,000 720 720 1,440 2,160
    7 20,000 18,000 6,000 360 360 720 12,000 720 720 1,440 2,160
    8 100,000 18,000 6,000 360 360 720 12,000 720 720 1,440 2,160
    9 500,000 18,000 6,000 360 360 720 12,000 720 720 1,440 2,160