NAPSA Revises Contribution Ceiling for 2025: Key Insights for Employers
The National Pension Scheme Authority (NAPSA) has announced important adjustments to the maximum monthly deductible contribution ceilings for 2025. These revisions came into effect following an update in the National Average Earnings (NAE) and will impact both employers and employees.
We recognize the importance of staying informed and compliant with statutory requirements. Below is an overview of the key changes and their implications for businesses:
Key Changes for 2025:
- New Contribution Limits
The maximum monthly deductible contribution for employees has increased to ZMW1, 708.20. The maximum statutory contribution (total for both employer and employee) has therefore, been adjusted to ZMW3,416.40.
- Updated National Average Earnings (NAE)
The NAE determined by the Zambia Statistics Agency, has been revised upward from ZMW7, 454.00 (2024) to ZMW8, 541.00 for 2025.
Contribution Rate Remains Unchanged
The contribution rate remains fixed at 10% of an employee’s monthly gross earnings, split equally between the employer and employee at 5% each. For NAPSA purposes, gross earnings include:
- Basic salary
- Bonuses
- Commission
- Overtime allowances
- Leave allowances
- Acting allowances
- Commuted leave days
- Severance pay
- Employer Responsibilities
Employers are legally required to update their payroll systems to reflect the new contribution ceiling for 2025. Failure to comply could result in penalties for non-compliance with statutory obligations under NAPSA regulations.
Compliance Perspective
This revision is tied to the broader economic context, as reflected in the NAE update. The increase is designed to ensure contributions reflect changing income trends and provide sustainability for pension benefits. Employers must integrate these changes into their payroll processes and ensure accurate remittances to NAPSA.
Our Advisory
At Bellmac Consulting Zambia Limited, we assist businesses in navigating regulatory updates, including statutory compliance matters such as NAPSA contributions. If you require assistance, please do not hesitate to contact us. Staying compliant not only safeguards your business but also secures the future benefits of your employees.