NSSF for casual and temporary workers
Why a Kenyan employer pays NSSF for casual workers as well as permanent staff, how the levy and pay statement rules treat casuals, and what to record.
By Achekam · · 4 min read · For Running a business businesses in Kenya
On building sites, farms, hotels and warehouses across Kenya, a familiar assumption does the rounds: casual workers are different. They come and go, they are paid by the day or the week, and surely the pension fund is for permanent staff.
NSSF does not see it that way. This article sets out NSSF's position on casual workers, how the training levy treats them, the one place where the Employment Act does draw a line, and how to run a casual workforce through payroll so the records hold up.
NSSF's position: no casual exception
NSSF's guidance for employers says they must register all employees with NSSF and remit contributions for them, without discrimination between "casual" and "permanent" staff.
The NSSF Act, in its consolidated version on Kenya Law, puts the duty on every employer with one employee or more: register with the Fund as a contributing employer and register its employees as members. Failure to register is an offence, with a fine of up to Kenya shillings fifty thousand. The Act also makes proof of registration a precondition for dealing with or accessing public services, which matters to any business that tenders for government work or needs licences.
The label "casual" therefore changes nothing for NSSF. A worker hired for three weeks at harvest and a clerk on a permanent contract are both employees whose contributions the employer must remit.
The training levy also counts casual workers
The same is true for the NITA training levy. The Industrial Training (Training Levy) Order defines "employee" for the levy to include apprentices, indentured learners, other trainees, and temporary, seasonal and casual workers.
A business that counts only its permanent staff for NSSF is likely to make the same mistake with NITA. Fix both at once: whoever is on the payroll counts. Registration and payment for the levy are covered in registering for and paying the NITA training levy.
Pay statements: where the Employment Act treats casuals differently
There is one rule where the law does distinguish. The Employment Act requires an employer to give an employee a written pay statement at or before each payment of wages, showing gross pay, each deduction and its purpose, and how the net amount is paid. Section 20, which contains that duty, does not apply to casual employees, piece-rate or task-rate employees, or engagements of six months or less.
So an employer is not obliged by that section to hand a day worker a payslip. It is still worth doing. A casual worker who sees an NSSF deduction on a slip knows the contribution is being made; one who receives cash with no explanation has every reason to doubt it. A statement also gives the employer a record of what was paid and deducted, which it needs anyway. What a full pay statement shows is set out in what a Kenyan pay statement must show.
Running casual staff through weekly pay runs in Achekam
Casual work is often paid weekly, and Achekam's pay runs can be monthly, fortnightly or weekly, with each period's overtime, commission, allowances, reimbursements and unpaid leave entered as variable inputs. A casual team can sit in its own weekly run while permanent staff stay on the monthly one.
Achekam's Kenyan payroll calculates PAYE, the Affordable Housing Levy, SHIF, NSSF Tier I and II and the NITA levy, and prepares the NSSF and NITA schedules, with each contribution posted to its own liability account. Because NSSF contributions are set by reference to monthly earnings, agree with your adviser how a worker's weekly pay is brought together for the month's NSSF schedule before the first weekly run, and check the first schedule by hand.
Importing a casual team
Seasonal businesses often take on a whole team at once. In Achekam, employees can be added one by one or imported from a CSV file, and the import checks every row and writes all rows or none. A single bad row stops the import rather than leaving half the team loaded, which makes it safe to bring in a large group on the first morning of the season.
Collect what you need on the day each worker starts: full name, national ID number, KRA PIN, NSSF number if they have one, phone number for M-PESA payments, and the agreed rate. Workers without an NSSF number need to be registered as members, which the employer must do under the Act; registering with NSSF as an employer explains the employer side.
Records to keep
Two record duties apply to casual staff as much as to anyone:
- The NSSF Act requires a registered employer to keep an up-to-date record of employees' earnings, produce it on demand to an NSSF compliance officer and retain it for the period the Board prescribes, which may not exceed ten years.
- The Employment Act requires a written record for each employee, including leave and rest days, and lets an authorised officer inspect records for the preceding thirty six months.
Keep, for every casual engagement, the dates worked, the pay for each period, the NSSF deducted and the employer's share, and proof of payment. When the season ends, the records stay.
Many casual workers come back season after season. Keep one record per person rather than starting a fresh one each time, so their contribution history with your business reads as a single line, and their NSSF number and details only need to be checked, not collected again.
NSSF's page for employers explains how employers register, their duty to register every employee and to pay contributions by the 9th of the following month, and how to pay.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
