SSNIT contributions make up ones pension pay
We’ve all heard of SSNIT (and not always for the right reasons) but not many of us actually understand what SSNIT is, and what it means for us after school.
Here are the key things that you need to know about SSNIT if you’re working, or even actively searching for your first job.
The three tiers of SSNIT (in simple terms)
Tier 1 contributions are compulsory payments of 13.5% of your pay that’s paid to SSNIT by your employer. This is what makes your pension. Your salary and how long you’ve been part of SSNIT will determine how much you’re paid every month during your retirement.
Tier 2 contributions are also compulsory and are 5% of your salary. Unlike tier 1 contributions, however, you’re given your tier 2 payment as a lump sum (one-time payment).
Tier 3 contributions are optional and can be anywhere up to 16.5% of your salary. You can also get your tier 3 contributions as a lump sum.
Your employers must pay your SSNIT
The duty of paying SSNIT falls on your employer. And here’s why it’s important to know the difference between your gross income and your net income; SSNIT is deducted from your pay. During salary negotiations, your net income is what you actually take home (after taxes and deductions like SSNIT). Your gross income is not what you’ll be taking home, so whenever you’re talking about money during a job interview, make sure it’s the net income.
It’s your job to make sure that your SSNIT is being paid
In order to make SSNIT payments on your behalf, your employer needs your SSNIT number. If you don’t have SSNIT, you can just walk into any of their branches and create an account. Once you’ve started working, it’s your job to make sure that your SSNIT is being paid. After all, it’s money that’s being put away for you to collect one day.