Source of this information: NSSF Downloads Web Page
NSSF is deductible from Taxable Pay for computing PAYE: See details on Pension Page
Legal Reference for NSSF:
The National Social Security Fund (NSSF) ACT No. 45 of 2013 was assented on 24 December 2013 with the effective date of commencement being 10 January 2014.
COMPUTATION GUIDELINES
For the purposes of the Act, the Upper Earning Limit (UEL) will be KES. 18,000 while the Lower Earnings Limit (LEL) will be KES 6,000.
The pension contribution will be 12% of the pensionable wages (see definition below) made up of two equal portions of 6% from the employee and 6% from the employer subject to an upper limit of KES 2,160 for employees earning above KES 18,000.
The employee contribution shall be drawn directly from his salary and wages while the employers contribution shall come directly from the employer.
The contributions relating to the earnings below the LEL of the earnings (a maximum of KES. 720) will be credited to what will be known as a Tier I account while the balance of the contribution for earnings between the LEL and the UEL (up to a maximum of KES 1,440) will be credited to what will be known as a Tier II account.
Pensionable Wages Definition:
From The Act: “wages” include all emoluments payable to an employee under a contract of service if no deductions were made, in pursuant to any law requiring or permitting the making of any deduction or otherwise excluding fluctuating emoluments;
From The Regulations: “fluctuating emoluments” for the purposes of these Regulations means employee earnings not paid on a fixed basis, but additional to basic wage or salary and includes benefits in kind, acting allowance, special duty allowance, leave allowance, uniform allowance, equipment allowance but does not include bonuses, commissions, overtime, shift pay, house allowance and service charge.
Note (From The Regulations):
An employer may opt to bear the full burden of the mandatory contributions prescribed in Section 20 of the Act, except that in such a case the employer’s contribution shall be 12% of the employee’s monthly pensionable earnings excluding fluctuating emoluments.