Deducting the right pension amount is only step one. The Act is just as strict about when that money must actually move.
When contributions must be remitted
Once salaries are paid, the Act gives an employer a short window to remit. Within 7 working days of the day salaries are paid.
This applies to both halves of the contribution: what was deducted from the employee, and what the employer adds itself. Both move together, to the same destination, on the same clock.
Where the money actually goes
Remittance is not sent to PenCom directly. It goes to the pension fund custodian named by each employee's own pension fund administrator (PFA).
Different employees can have different PFAs, so payroll needs to route contributions correctly, not lump everyone into a single transfer.
The penalty for missing the window
Miss the deadline, and the Act adds at least 2% of the unpaid contributions for each month or part of a month. This is calculated on top of the contributions still owed, not instead of them.
The Act treats this penalty as a debt owed to the employee's own retirement savings account. In effect, late remittance costs the employer more the longer it drags on, since the penalty is expressed per month or part of a month unpaid.
Why this matters beyond payroll housekeeping
A pattern of late remittance can show up later, when an employer applies for a clearance certificate. PenCom's 2026 e-certificate guide warns that unpaid monthly contributions from 2024 now attract this penalty, and the application asks for evidence of remittances for all employees for the last 3 financial years.
Getting the deadline right every month is cheaper, and far less stressful, than untangling a backlog just before a certificate application or a tender deadline.
When an employee has no account to remit to
A new employee may not yet have a retirement savings account (RSA) when salaries are first paid. The Act has a rule for an employee who still has no RSA after six months in the job, covered in what happens if an employee has no pension account after six months. For the months in between, ask a PFA how PenCom's guidelines expect contributions to be handled. Get the answer in writing, so your records show why a contribution was treated as it was.
Common mistakes
- Counting the remittance window from the end of the month, rather than from the actual salary payment date.
- Sending one lump sum to a single custodian instead of routing each employee's contribution to their own PFA's custodian.
- Assuming a missed month is cleared once the contribution itself is paid, without settling the added penalty.
- Letting a small backlog build quietly, only for it to surface during a certificate application.
For the rate this penalty applies on top of, see PenCom contribution rate: employer and employee, and for the wider certificate this feeds into, how to apply for a PenCom clearance certificate online. The tender compliance hub covers the rest of the series.