How Your Salary Will Reduce This Month Over New NSSF Rates

From February 2025, thousands of salaried Kenyans will notice some reduction in their take-home pay as the new National Social Security Fund (NSSF) contribution rates take effect.

The adjustments, which are part of the phased implementation of the NSSF Act 2013, aim to boost long-term retirement savings for employees.

In the phased rates, employees who earn above Ksh75,000 will be the most affected, with net pays reducing by between Ksh126 and Ksh1,500. 

Notably, NSSF contributions are tax-deductible, meaning that they are deducted before the KRA determines the taxable income on which the PAYE rates are applied.

Also Read: How Your Net Pay Will Change If Mbadi’s PAYE Cut Proposals Pass

‍Additionally, the government has recently revealed plans to reduce the PAYE tax rates, including the increment of the tax-free threshold from the current Ksh24,000 to Ksh30,000. Therefore, should the proposals by Treasury CS John Mbadi pass, the net pay listed below may vary.

Here is how the new NSSF rate will affect various salary bands based on the current PAYE rates

Kenyans earning a salary of Ksh25,000 will have their NSSF rates retained at Ksh1,500. As a result, their net pay will remain at Ksh22,438.

Those earning Ksh30,000 will have their rates maintained at Ksh2,100, while those earning Ksh50,000 have their rates retained at Ksh3,000. The net pay of Ksh30,000 workers will be retained at Ksh26,194, while the net pay of Ksh50,000 workers remain at Ksh39,029. 

Ksh75,000 earners will have their rates increase from Ksh4,320 to Ksh4,500. Their net pay will therefore reduce from Ksh54,861 to Ksh54,735.

Likewise, those earning Ksh100,000 will have their rates increased from Ksh4,320 to Ksh6,000. The net pay of this salary band will reduce from Ksh71,618 to Ksh70,442.

Ksh200,000 and Ksh300,000 earners will see their rates increase from Ksh4,320 to Ksh6,480. The net pay of Ksh200,000 earners will reduce from Ksh138,643 to Ksh137,131.

On the other hand, the take-home pay for those earning Ksh300,000 will be Ksh204,256, down from Ksh205,668.

The increase in NSSF contributions is part of a long-term strategy to protect retirees from old-age poverty. In 2022, the NSSF fund held Ksh295.6 billion and grew to Ksh558 billion by mid-2025.

Annual contributions jumped from Ksh19.29 billion in 2022 to Ksh83.97 billion by June 2025, with projections expected to exceed Ksh100 billion in 2026.