Social Security Contributions

1. National Social Security Fund (NSSF)

The National Social Security Fund (NSSF) is a mandatory social security program in Kenya designed to provide retirement benefits for salaried workers.

a). Contribution Structure

• Both employers and employees contribute to the fund.
• The total contribution is 12% of an employee's monthly earnings.
• This is split equally: 6% from the employee and 6% from the employer.

b). Contribution Limits

• The maximum monthly contribution is KES 2,160.
• This applies to employees earning above KES 18,000.

c). Earnings Thresholds

• Lower Earnings Limit (LEL): KES 6,000.
• Upper Earnings Limit (UEL): KES 18,000

d). Tier System

• Tier I account: Receives contributions for earnings below the LEL (maximum KES 720).
• Tier II account: Receives contributions for earnings between the LEL and UEL (up to KES 1,440).

e). Payment Process and Procedure

• The employee's portion is deducted from their salary.
• The employer is responsible for remitting the total amount (both employee and employer contributions) to the NSSF.
• Remittances to the fund must be made by the 9th day of each subsequent month.

2. National Hospital Insurance Fund (NHIF)

The National Hospital Insurance Fund (NHIF) is a healthcare financing system in which employees participate through salary-based contributions. Employers are responsible for deducting these contributions from their employees' salaries and remitting them to the NHIF.

The purpose of these contributions is to help offset medical treatment costs for the insured individuals. However, it's important to note that the NHIF coverage typically only covers a portion of the actual medical expenses incurred.

This system aims to provide a basic level of health insurance coverage to employees, but additional private insurance or out-of-pocket payments may be necessary for comprehensive healthcare coverage.