Employers have turned out to be the most affected lot in the new National Social Security Fund (NSSF) deductions set to take effect in April.
A ruling by the Court of Appeal last week overturned an earlier decision by the High Court that termed the NSSF Act of 2013 unconstitutional.
In the new rates, employees will make mandatory contributions of up to Ksh.2160, which is the maximum amount, up from the previous flat rate of Ksh.200.
Read: NSSF Acquires Additional Ksh700 Million Stake In KCB
Likewise, employers will be required to make a similar amount in contribution for their employees to NSSF.
These contributions will likely affect employers adversely amid biting economic times, who say the act is not even clear on what exact part of the wages will be subject to the deductions.
The Federation of Kenya Employers (FKE) says the act has had a number of ambiguities, including the lack of clarity on whether the deductions will be made on the basic pay or the total income.
“Employers had specific issues with the NSSF Act 2013 that needed to be addressed on whether the deductions would be effected on basic pay or total emoluments, implications on gratuity benefits and the commencement date, among others,” FKE told a local daily.
Read: NSSF Not Sufficient To Offer Consistent Source Of Income Post Retirement – Cytonn Report
Besides the employers, FKE also noted that the employees will be affected by the contributions as they will take home lesser perks than they should.
Raising the pension contributions will be very expensive to both employers and employees and it will impact their take-home pay.” said FKE
The employers’ lobby group has asked for more consultations before the deductions become active from April 2023.
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