The government through the National Social Security Fund (NSSF) has triggered kenyans after announcing an increase in the new monthly NSSF deductions of various employees starting immediately.
According to the new monthly NSSF deductions, kenyans will be requito comply and the notice released on Friday directs all employers to effect the payment starting from February 2024 payroll.
The new NSSF deductions will see kenyans pay a sum of between Ksh. 420 and Ksh. 1,740. This has caused mixed reactions amid kenyans raising concerns of toughening economic times with no salary increments but increased deductions.
Also Read: Body Of Grade Six Pupil Found In School Ceiling, School Closed Indefinitely
However, the new monthly NSSF deductions are in line with the 3rd Schedule of the NSSF Act Cap45 of 2013. The act gradually raises the mandatory pension contributions by employees based on the earning limits. This is equally matched by the employer.
The ast therefore states that the deductions will be raised to specific amounts over the first five years. The first year saw mandatory contributions increase from a flat rate of Ksh200 per employee to a graduated plan that will six per cent of an employee’s salary.
New Monthly NSSF Deductions Rates.
The new deductions are based on two categories: the lower limit (Tier 1) the upper limit (Tier 2). The upper earning limit is for employees who are earning above Ksh18,000 and above while the lower earning limit (considered the lowest pensionable salary) is for employees who earn below Ksh18,000
Also Read: Government Announces The Price Of The First Affordable Housing Units
Tier 1 deductions will be based on the revised lower limit of Ksh7,000, up from the current Ksh6,000. This means that the deductions will go to Ksh420 from Ksh360.
Tier 2 deductions, on the other hand, have been raised to Ksh29,000 from the current Ksh18,000. This implies that workers will be required to pay Ksh1,740, up from Ksh720.
NSSF announced that Remittances to the Fund should be made by the 9th day of each subsequent month and the new rates will take effect until January 2025, when the mandatory deductions will undergo another review.