Kenya’s National Social Security Fund (NSSF) has introduced new contribution rates for 2024, marking the second year of implementation under the NSSF Act Cap45 of 2013. These changes impact both employers and employees, reshaping the landscape of social security contributions. In this article, we delve into the intricacies of the revised rates, providing essential information for individuals and businesses alike.
Understanding Tier I Deductions:
The revised lower limit of Ksh 7,000, up from Ksh 6,000, has implications for Tier I deductions. Employees falling under this category will now contribute Ksh 420, a notable increase from the previous Ksh 360. Employers will match this amount, ensuring a balanced contribution structure.
Exploring Tier II Deductions:
Tier II deductions have seen a significant shift with the revised upper limit now set at 1x of the national average wage, up from the previous 0.5x. This adjustment doubles the deduction from Ksh 720 to Ksh 1,740. Employers will match this amount, creating a substantial impact on overall contributions.
Total NSSF Contributions:
Effectively, starting February 9th, 2024, total NSSF contributions undergo a considerable change. The total contributions now increase from Ksh 2,160 (Ksh 720 + Ksh 1,080) to Ksh 4,320 (Ksh s 840 + Ksh 3,440). This alteration reflects a significant adjustment in the financial commitments of both employees and employers towards social security benefits.
An Important Note on Tier II Deductions:
Despite the adjustments, it’s worth noting that Tier II deductions continue to be based on the national average wage reported in 2013/14. This provides some relief compared to using the current national average wage, which would have resulted in higher Tier II deductions.
Conclusion:
As Kenya’s NSSF enters the second year of implementing the NSSF Act 2013, these new rates reshape the contribution landscape. Employers and employees alike must adapt to these changes, ensuring compliance for financial planning and social security benefits. Stay informed, navigate the new rates, and secure your financial future.
Stay updated with the latest changes in Kenya’s NSSF contributions for 2024 to make informed decisions regarding your financial well-being.
