General Information

• What are the new NSSF deduction rates for 2025?

Starting February 1st, 2025, both employees and employers will contribute 6% of an employee’s salary to NSSF. This translates to a minimum contribution of Sh480 per month, up from Sh420.

• How will the new NSSF deduction rates affect my take-home pay?

The increased contributions will reduce disposable income. For example, an employee earning Sh50,000 per month will now contribute a total of Sh3,000 to NSSF, compared to the previous Sh2,160.

• What salary range do the new NSSF deduction rates apply to?

The new contribution rates apply to salaries between Sh8,000 and Sh72,000. Individuals earning above Sh72,000 will see higher deductions.

• What are the employer’s responsibilities regarding NSSF contributions?

 Employers are required to match the employee’s contribution of 6% to NSSF. This means both the employer and employee each contribute 6% of the employee’s salary.

• Why has the government increased NSSF deduction rates?

 The government aims to amass Sh1 trillion through these increased contributions by 2027. The new framework is considered “fair, equitable, and progressive” by the government.

• How can businesses ensure compliance with the new NSSF deduction rates?

Businesses can utilize automated payroll systems to streamline their payroll processes and ensure accurate and timely contributions.

• What concerns have been raised about the increased NSSF deductions?

 Both employers and employees have expressed concerns about the financial burden of these increased deductions. Employers worry about the impact on their operating costs, while employees are concerned about reduced disposable income.