Breaking News:Gov’t Raises NSSF Deductions, The new rates will take effect until January 2025.
Breaking News: Gov’t Raises NSSF Deductions, The new rates will take effect until January 2025: In a notice dated Friday, 12th January, NSSF informed employers of the new charges which are to take effect during the February 2024 payroll where Kenyans will have to pay between Ksh420 and Ksh1,740.
The notice cited that this is in line with the 3rd Schedule of the NSSF Act Cap45 of 2013, which gradually raises the mandatory pension contributions by employees based on the earning limits. This is equally matched by the employer.
The ACT provides 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 is six per cent of an employee’s salary.
The New rates are based on two categories; the lower limit (Tier 1) and the upper limit (Tier 2). The upper earning limit is for employees who are earning above Ksh18,000 and above whereas the lower earning limit (considered the lowest pensionable salary) is for employees who earn below Ksh18,000.
Tier 1 deductions will be based on the revised lower limit of Ksh7,000, up from the current Ksh6,000, which indicates that the deductions will rise to Ksh420 from Ksh360.
Similarly, Tier 2 deductions, have been raised to Ksh29,000 from the current Ksh18,000. This means that workers will be required to pay Ksh1,740, up from Ksh1,080.
The notice read,”Remittances to the Fund should be made by the 9th day of each subsequent month. Employers should not hesitate to reach out to the Fund for any clarification. Our team is dedicated to supporting employers to attain compliance with the NSSF Act.”
“The Fund wishes to thank all those Employers who have continued to remit the contributions of their workers since operationalization of the NSSF Act, 2013,” part of the notice read.
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