Phase 4 Implementation Overview

As of February 1, 2026, Kenya has officially entered Phase 4 of the National Social Security Fund (NSSF) Act No. 45 of 2013. This transition marks a critical point in the country's journey toward a more robust pension system. The primary goal is to significantly increase the savings pool, which will subsequently adjust the take-home pay for middle and high-income earners.

The 2026 Shift: Contribution Adjustments

For the 12-month period running from February 2026 to January 2027, contribution limits have been adjusted upward. It is important to note that the contribution percentage remains unchanged at 6% for the employee and 6% for the employer.

However, the pensionable earnings caps have shifted as follows:

• Tier I (Lower Earnings Limit): Increased to KES 9,000 (up from KES 8,000 in 2025).

• Tier II (Upper Earnings Limit): Increased to KES 108,000 (up from KES 72,000 in 2025).

Impact on High Earners

For employees earning KES 108,000 and above, the new contribution figures are:

• Employee Contribution: KES 6,480.

• Employer Matching: KES 6,480.

• Total Monthly Contribution: KES 12,960.

Understanding the Difference: Tier I vs. Tier II

The law splits contributions into two distinct tiers for a specific legislative reason:

1. Tier I (Mandatory): This tier represents the base social security for all workers. These funds are mandatory and must be paid directly to the NSSF.

1. Tier II ("Excess"): This tier covers the "excess" contributions for higher earners. Employers have the option to "contract out" of the NSSF for this specific tier. Instead of sending these funds to NSSF, they can be paid into a private, Retirement Benefits Authority (RBA) approved scheme.

Important Deadline for Employers

Employers must ensure that compliance processes are updated immediately. The remittance deadline for all February 2026 contributions is March 9th, 2026.

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