A Kenyan Employer's Guide to NSSF and Housing Levy Obligations

As a Kenyan employer, meeting your NSSF and Affordable Housing Levy obligations is part of running compliant payroll. Both are deducted alongside PAYE and SHIF, and both have firm deadlines. This guide sets out the current NSSF tiers and dated limits, how the housing levy works, registration, calculation, remittance, penalties, and record-keeping, so you can budget the employer cost and avoid fines.

Key Legislative Background

NSSF operates under the NSSF Act No. 45 of 2013, which created a two-tier structure for the National Social Security Fund and is being implemented in phases. The Affordable Housing Levy is governed by the Affordable Housing Act 2024, assented to on 19 March 2024.

The NSSF Act 2013 introduced Tier I and Tier II contributions based on pensionable earnings, with the lower and upper earnings limits rising in phases. Employers must update payroll as each phase takes effect.

The earlier housing levy under the Finance Act 2023 was struck down as unconstitutional, so the current levy stands on the Affordable Housing Act 2024 rather than the Finance Act 2023. Employers should cite the 2024 Act as the basis.

For current limits and notices, employers can reference the NSSF portal and KRA publications. Building these into payroll software keeps Tier I and Tier II deductions and the housing levy accurate as rules change.

NSSF Contribution Requirements

NSSF is contributed at 6% from the employee and 6% from the employer of pensionable earnings, split into Tier I and Tier II and capped at the upper earnings limit. This applies to all employees in formal employment and funds retirement, invalidity, and survivors benefits.

The contribution limits rise in phases as the lower and upper earnings limits increase. Through January 2026 the limits are KES 8,000 and KES 72,000; from February 2026 they rise to KES 9,000 and KES 108,000. Employers adjust deductions at each phase.

Calculate contributions on pensionable earnings, applying 6% to each side within the tiers and capping at the upper earnings limit. Remit by the 9th of the following month through the NSSF portal to avoid penalties and interest.

Transitioning between phases needs good record-keeping and payroll updates. This supports social protection for staff. Non-compliance risks fines and enforcement under the Act.

Employee and Employer Rates

Both employer and employee contribute 6% of pensionable earnings, split into Tier I (up to the lower earnings limit) and Tier II (between the lower and upper limits). Through January 2026 the maximum is KES 4,320 per side per month; from February 2026 it rises to KES 6,480 per side. The employer matches the employee contribution.

Tier II per side is 6% of the difference between the upper and lower earnings limits. For salaries at or above the upper limit, the contribution caps at the per-side maximum. This keeps the deduction fair across earnings.

Period	Tier I max per side (KES)	Tier II max per side (KES)	Max per side per month (KES)
Through January 2026	480	3,840	4,320
From February 2026	540	5,940	6,480

For an employee at or above the upper earnings limit, the employee deduction is KES 4,320 per month through January 2026 and KES 6,480 from February 2026, with the employer matching. Build these into payroll for accurate monthly returns.

Income Thresholds and Caps

Contributions apply to pensionable earnings up to the upper earnings limit. Through January 2026 the lower earnings limit is KES 8,000 and the upper limit is KES 72,000. From February 2026 these rise to KES 9,000 and KES 108,000. There are no contributions on earnings above the upper limit.

Pensionable earnings follow the components set out in the NSSF Act. Classify income correctly to avoid disputes or audit issues, and confirm the current treatment on the NSSF portal.

Item	Through January 2026 (KES)	From February 2026 (KES)
Lower Earnings Limit	8,000	9,000
Upper Earnings Limit	72,000	108,000
Maximum per side per month	4,320	6,480

Keep records of the limits used each period for reconciliation and returns. The same rules apply across the private and public sectors. This supports compliance and avoids late-payment interest.

Housing Levy Obligations

The Affordable Housing Levy is 1.5% from the employee plus 1.5% from the employer (3% total) of gross salary, under the Affordable Housing Act 2024. Unlike NSSF, the levy has no upper cap, so it keeps rising with salary. It is now a deduction from taxable income under the Tax Laws (Amendment) Act 2024.

The levy is collected by KRA through iTax. Employers must handle it as a statutory deduction alongside NSSF and PAYE. Compliance keeps payroll clean and avoids penalties.

Because there is no cap, the employer cost rises with each high earner on the payroll. Build the levy into payroll software for accurate calculation. Remit by the 9th of the following month.

Track KRA notices for any changes to the levy. Failure to deduct or remit invites penalties and interest. Confirm the current rate and rules on the KRA iTax portal.

Contribution Structure

The levy is 1.5% of gross salary from the employee, matched by 1.5% from the employer, and remitted via KRA iTax by the 9th of the following month. It applies to gross pay with no cap.

Gross Salary (KES)	Employee Levy 1.5% (KES)	Employer Levy 1.5% (KES)	Total Levy 3% (KES)
30,000	450	450	900
100,000	1,500	1,500	3,000
500,000	7,500	7,500	15,000

For a worker on KES 30,000, the total levy is KES 900 a month. On KES 500,000 it reaches KES 15,000, since the levy has no cap unlike NSSF. The employer matches the employee share exactly.

Use your iTax registration for remittance and reconcile against payroll. Late payment triggers penalties and interest, so automate where possible.

Legal Basis

The current Affordable Housing Levy stands on the Affordable Housing Act 2024, assented to on 19 March 2024, after the earlier Finance Act 2023 version was struck down as unconstitutional. Employers should cite the 2024 Act, not the Finance Act 2023, as the basis.

KRA collects the levy through iTax as part of normal payroll remittance. Employers must continue deductions under the current Act. This applies across formal employment.

Monitor KRA and gazette notices for any changes. Non-compliance risks penalties under the law. Keep records for audits.

Where there is doubt about the current position, confirm it on the KRA iTax portal or with a tax adviser before changing payroll.

Registration and Compliance

Employers must register with NSSF to obtain an employer code that enables remittances, and register on iTax for the housing levy. Registration lets both employer and employees access the relevant benefits and stay compliant.

Without registration, an employer cannot remit correctly, which exposes the business to penalties. The NSSF employer code is used for all NSSF transactions across Tier I and Tier II. Employees also need individual NSSF registration to access benefits.

Register promptly to avoid penalties and interest on arrears. The same compliance applies in the private and public sectors. Confirm the current registration steps on the NSSF portal, since portal details change.

Keep registration records for audit and inspection. Integrate registration with payroll software for smooth reporting. This supports employee benefits such as invalidity and survivors pensions.

Employer NSSF Registration

Complete employer registration on the NSSF employer self-service portal using your KRA PIN and business registration documents. Confirm the current document list and processing time on the NSSF portal, since these can change.

Begin on the Employer Self-Service Portal on the NSSF website. Select New Registration and enter your KRA PIN. Upload the required documents to verify your business details.

1. Access the NSSF site and open the Employer Self-Service Portal.
2. Select New Registration and input your valid KRA PIN.
3. Upload your certificate of registration and the required business documents.
4. Submit and receive your employer code.
5. Register employees individually for benefit claims.

Required Documents	Description
Certificate of Registration	Business registration or incorporation document
KRA PIN Certificate	Valid PIN for the employer entity
Directors' IDs	Copies of national IDs as required
Proof of Address	Recent utility bill or lease agreement

After registration, keep your compliance records up to date. Register all employees so contributions can be remitted by the 9th of each month. Confirm the current benefit and withdrawal rules on the NSSF portal.

Calculation and Remittance Process

Employers calculate NSSF at 6% from each side within the tiers (capped at the upper earnings limit) and the housing levy at 3% total (1.5% each side), then remit NSSF and the housing levy by the 9th of the following month. NSSF goes through the NSSF portal and the housing levy through KRA iTax.

The process starts with running payroll to find each employee's gross and pensionable earnings. NSSF splits into Tier I and Tier II up to the upper earnings limit. The housing levy applies to gross pay with no cap.

Payroll software simplifies the calculations and generates the monthly returns. Pick a tool that handles the dated NSSF limits and the housing levy correctly, and keep it updated as phases change.

1. Run payroll and calculate NSSF per employee: 6% per side within the tiers, capped at the upper earnings limit.
2. Calculate the housing levy at 1.5% from each side of gross pay.
3. File and pay NSSF through the NSSF portal by the 9th, using your employer code.
4. File and pay the housing levy through KRA iTax by the 9th.
5. Keep the remittance confirmations for your records.

Verify totals before remittance to avoid penalties for late payment or underpayment. Confirm the current paybill and account details on the NSSF portal and iTax before paying.

Penalties for Non-Compliance

Late NSSF and housing levy remittances attract penalties and interest set by the respective laws. The exact penalty and interest rates can change, so confirm the current figures on the NSSF and KRA iTax portals rather than relying on a single quoted rate.

Non-compliance disrupts employee benefits and adds cost to the business. Penalties and interest build up on arrears. Regular audits by NSSF and KRA enforce the rules.

Area	Position
Late NSSF remittance	Penalty and interest under the NSSF Act; confirm current rates on the NSSF portal
Late housing levy	Penalty and interest under the Affordable Housing Act 2024; confirm on the KRA iTax portal
Non-registration	Subject to penalties under the relevant Act; confirm current position
Under-remittance	Full amount due plus interest

To mitigate exposure, integrate payroll software with the NSSF portal and iTax. Submit monthly returns by the 9th and keep accurate records. Where arrears exist, contact NSSF or KRA to confirm the amount owing and any settlement options.

Record-Keeping and Reporting

Maintain payroll registers, NSSF returns, payment receipts, and employee contribution statements for the period required by the NSSF Act. Good records support compliance for both NSSF and the housing levy and protect against audit findings.

Reporting includes monthly NSSF returns with payment proof, remitted by the 9th, and housing levy returns through KRA iTax by the 9th. Provide employees with contribution statements so they can verify their records.

Audit triggers often arise from arrears, prompting NSSF or KRA inspections. Use digital payroll records and trackers for retention, and reconcile the employer and employee shares each month.

For example, a Nairobi firm can keep monthly remittances in a payroll system linked to the NSSF portal and iTax, which avoids late-payment interest. Regular reconciliation under Tier I and Tier II prevents disputes and supports smooth benefit claims.

Frequently Asked Questions

What does a Kenyan employer's NSSF and housing levy obligation cover?

It covers registration, monthly deductions, remittance by the 9th, and record-keeping for both NSSF (under the NSSF Act No. 45 of 2013) and the Affordable Housing Levy (under the Affordable Housing Act 2024). Employers deduct the employee share, add the employer share, and remit on time to stay compliant.

What are the current NSSF contribution rates for Kenyan employers?

Employers contribute 6% of pensionable earnings, matched by 6% from the employee, split into Tier I and Tier II and capped at the upper earnings limit. The maximum is KES 4,320 per side per month through January 2026 and KES 6,480 per side from February 2026. Confirm the current figures on the NSSF portal.

How does the housing levy work for employers?

The Affordable Housing Levy, under the Affordable Housing Act 2024, requires employers to deduct 1.5% of gross salary from the employee and add 1.5% themselves, totalling 3% with no cap. Remit it through KRA iTax by the 9th of the following month.

What are the remittance deadlines for NSSF and the housing levy?

Both NSSF and the housing levy are remitted by the 9th of the month following the deduction. NSSF goes through the NSSF portal and the housing levy through KRA iTax. File and pay on time to avoid penalties and interest.

What penalties apply for late NSSF or housing levy remittances?

Late remittances attract penalties and interest under the NSSF Act and the Affordable Housing Act 2024. The exact rates can change, so confirm the current penalty and interest position on the NSSF and KRA iTax portals before relying on a figure.

Can Kenyan employers register and remit for multiple employees at once?

Yes. The NSSF employer self-service portal supports bulk employee handling, and the housing levy is filed through iTax. You will need your employer PIN, business details, and employee information. Confirm the current steps on the NSSF portal and iTax.