By Mumo Judah
Nairobi, June 5, 2026
The National Social Security Fund (NSSF) has directed employers to continue remitting contributions under the enhanced rates provided for in the NSSF Act, 2013, despite growing legal uncertainty following a recent Court of Appeal decision.
In a public notice issued by NSSF management, the state corporation maintained that the NSSF Act, 2013 remains operational and enforceable, citing an earlier Court of Appeal ruling delivered in February 2023. The fund cautioned employers and employees against claims that statutory deductions should immediately revert to the previous flat-rate contribution of KSh 200 per worker.
The clarification comes amid confusion triggered by a Court of Appeal ruling delivered on May 29, 2026, which declined NSSF’s application to suspend a lower court judgment that had declared the NSSF Act, 2013 unconstitutional.
The ruling has generated differing interpretations among legal experts, employers and labour stakeholders. Some legal analysts argue that in the absence of a stay order, the legal position automatically reverts to the repealed NSSF Act (Cap 258), effectively restoring the previous KSh 200 contribution framework while the substantive appeal continues before the courts.
However, NSSF has taken a different position, arguing that the ongoing legal proceedings do not affect the implementation of the contribution structure currently provided for under the Act’s phased rollout programme.
Under the rates being enforced by the fund, Tier I contributions remain at six per cent of the Lower Earnings Limit, currently set at KSh 9,000. This translates to a monthly contribution of KSh 540 from an employee, matched equally by the employer.
Tier II contributions are calculated at six per cent of earnings above the Lower Earnings Limit up to the Upper Earnings Limit, which is currently capped at KSh 108,000. This results in significantly higher contributions for workers in higher income brackets.
The conflicting legal interpretations have placed employers in a difficult position as they seek to comply with both regulatory requirements and court decisions.
Human resource managers and payroll administrators now face uncertainty over whether to continue implementing the enhanced deductions or revert to the previous contribution rates. Employers who continue with the higher deductions risk objections from employees, labour unions and possible legal challenges. On the other hand, those who revert to the lower rates could face compliance penalties, system rejections on the NSSF portal, or future arrears claims should the fund ultimately succeed in its appeal.
The dispute has renewed debate over the future of Kenya’s pension reforms, with stakeholders calling for clear guidance from the courts and relevant government agencies to prevent confusion in payroll administration across the country.
As the legal battle continues, employers are expected to closely monitor developments while awaiting a definitive judicial determination on the validity and implementation of the NSSF Act, 2013.
