Kenya Social Contributions Guide

NSSF — Employee 6%, Employer 6%

The National Social Security Fund (NSSF) is Kenya's mandatory retirement savings scheme under the NSSF Act No. 45 of 2013. Both the employee and employer contribute 6% of the employee's pensionable pay, capped at a maximum pensionable pay of KES 18,000 per month. This means the maximum monthly contribution is KES 1,080 from each party (KES 2,160 total). Contributions are remitted to the NSSF by the 9th of the following month. The fund provides retirement, disability, and survivor benefits. For example, an employee earning KES 50,000/month has a maximum NSSF contribution of KES 1,080 each (since KES 50,000 exceeds the KES 18,000 cap).

Affordable Housing Levy (AHL) — 3%+3%

The Affordable Housing Levy (AHL) was introduced under the Finance Act 2023 to fund the government's affordable housing programme. The levy is charged at 3% of an employee's gross monthly salary, with a matching 3% contribution from the employer. Unlike NSSF, there is no upper cap on pensionable pay — the levy applies to the full gross salary. For example, an employee earning KES 100,000/month contributes KES 3,000, and the employer contributes another KES 3,000 (total KES 6,000). AHL contributions are remitted to KRA alongside PAYE by the 9th of the following month. Funds are credited to the Affordable Housing Fund and may be withdrawn upon retirement or used for qualifying housing projects.

Social Health Authority (SHA) — Replacing NHIF

The Social Health Authority (SHA) was established under the Social Health Insurance Act (SHIA) of 2023 to replace the National Hospital Insurance Fund (NHIF). SHA contributions are mandatory for all employees in the formal sector. The contribution rates are graduated based on salary levels, with standard monthly contributions ranging from KES 300 to KES 1,700 for employed persons. For self-employed individuals, contributions are based on household income. SHA provides access to a comprehensive benefits package including outpatient, inpatient, and emergency care. Contributions are remitted via KRA's iTax platform alongside PAYE.

Total Combined Contributions — Example

For an employee earning KES 100,000/month in 2026, the total monthly deductions and employer costs for social contributions are as follows:

• Employee: NSSF KES 1,080 (6% × 18,000 cap) + AHL KES 3,000 (3% × 100,000) + SHA ~KES 1,700 = ~KES 5,780/month
• Employer: NSSF KES 1,080 + AHL KES 3,000 + SHA ~KES 1,700 = ~KES 5,780/month
• Total: ~KES 11,560/month in combined social contributions

Registration and Compliance

Employers must register with the NSSF, SHA, and KRA (for AHL) upon hiring their first employee. NSSF returns are filed monthly by the 9th. SHA returns are filed monthly alongside PAYE. AHL contributions are remitted via the monthly PAYE return. Non-compliance attracts penalties including late payment penalties of 5% per month for NSSF, interest at 1% per month for AHL, and potential criminal sanctions for persistent non-compliance. Foreign workers are generally subject to the same social contribution rules, though bilateral social security agreements with other countries may provide exemptions.

Voluntary Contributions

Self-employed individuals may voluntarily contribute to the NSSF at a rate of 6% of declared earnings, subject to the same cap. Voluntary SHA contributions are based on household income declarations. AHL is not applicable to self-employed individuals (only employed persons). Self-employed persons may also contribute to registered occupational pension schemes or individual retirement benefit schemes.

FAQs

Are social contributions tax-deductible for the employee?

NSSF employee contributions are not separately deductible for PAYE purposes. AHL contributions are not deductible. However, contributions to registered occupational pension schemes and individual retirement benefit schemes are deductible up to a lifetime limit of KES 20,000 per month (KES 240,000 per year).

Do foreign workers pay Kenyan social contributions?

Yes, foreign workers employed in Kenya are generally subject to the same social contributions as Kenyan employees. Exemptions may apply under bilateral social security agreements (e.g., with Uganda, Rwanda, Tanzania).

Can I withdraw my NSSF savings before retirement?

NSSF savings can be withdrawn upon reaching the retirement age (60 years), permanent departure from Kenya, or in cases of permanent disability. Partial withdrawals for mortgage deposits on owner-occupied housing are permitted under specific conditions.

What is the penalty for failing to remit AHL?

Failure to remit AHL attracts a penalty of 5% of the unpaid amount plus interest at 1% per month. KRA may enforce collection through agency notices, property attachment, and debt collection proceedings.

Disclaimer

This guide provides general information about Kenyan social contributions for the 2026 tax year. Contribution rates and regulations may change. Always consult with a qualified Kenyan tax advisor or the Kenya Revenue Authority for advice specific to your situation. InvestmentKit does not provide tax advice.