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The short answer
A Nigerian company must contribute to the Industrial Training Fund (ITF) if it has five or more employees, or fewer than five but annual turnover of ₦50 million or more; the contribution is 1% of annual payroll under the ITF (Amendment) Act 2011. It is paid once a year, and a compliance certificate follows that other agencies may ask for.
What the ITF levy is
The Industrial Training Fund is a federal body that funds and organises skills training. Employers who meet the thresholds pay an annual contribution, and in return can apply to recover part of it if they train staff. A Federal High Court has held the levy to be a contribution rather than a tax, according to a 2020 Mondaq analysis by TNP. For a US company, the practical point is that it sits outside PAYE and company tax and is easy to miss because no tax portal reminds you about it.
Does your subsidiary have to pay?
The ITF (Amendment) Act 2011 brought in two tests, as summarised by Mondaq (TNP, 17 Feb 2020):
- Five or more employees, or
- Fewer than five employees but annual turnover of ₦50 million or more
Before 2011 the threshold was 25 employees, which is why older guides still quote it. Count all employees on the Nigerian payroll. Contractors paid on invoice are not employees, but if your "contractors" work like staff, the count and the classification risk both change; see when contractors become a subsidiary question.
How much: 1% of annual payroll
The contribution is 1% of the annual payroll. Where the ITF does not know the payroll, it can raise a best-of-judgment assessment, according to the same Mondaq note, so filing accurate figures is cheaper than waiting.
Example only. A subsidiary has six staff with a combined annual payroll of ₦48,000,000.
- ITF contribution: 1% x ₦48,000,000 = ₦480,000 for the year
- Same subsidiary with three staff on ₦20,000,000 payroll and ₦60,000,000 turnover: still liable on the turnover test, contribution ₦200,000
Do not confuse it with NSITF, which is a separate 1% of total monthly payroll for employees' compensation under the Employees' Compensation Act 2010, according to NSITF's own services page. Our Nigeria library compares NHF, NSITF and ITF side by side.
Registration and payment steps
LawCare Nigeria's 2019 procedure note describes the process. Check with the ITF area office before you rely on any form number or fee, because the note is several years old.
- Register at the ITF area office covering your business address, using the employer registration form (described as Form 7A).
- For existing employers, submit the annual return of payroll (described as Form 5A).
- Generate a payment reference (RRR) through the ITF pay portal or Remita and pay.
- Take proof of payment to the area office to obtain a Compliance Certificate.
- Pay the contribution not later than 1 April of the year following the payroll year.
The same note says a small new company with fewer than five staff could obtain a certificate under a concession by letter, certificate of incorporation and a ₦100,000 payment, and that false returns carried fines of ₦500,000 for a first offence and ₦1,000,000 after. These are 2019 figures; confirm them with the ITF.
Why the certificate matters
LawCare notes that an ITF compliance certificate is commonly needed for expatriate quota applications, customs matters and government contracts. If your US parent plans to second staff to Lagos, see expatriate quota for US staff; a missing ITF certificate can hold that up.
Getting some of it back
The ITF law allows a reimbursement of up to 50% of the contribution to employers who train staff. ThisDay reported in April 2019 that the ITF refunded about ₦6.5 billion to 510 employers, with conditions including full payment of the annual contribution, evidence of training across staff cadres, acceptance of SIWES students and applying within the stated period. Keep training records from the start of the year if you intend to claim.
Common mistakes
- Using the pre-2011 threshold of 25 employees and concluding a small team is exempt.
- Ignoring the turnover test: a three-person sales subsidiary with strong revenue can still be liable.
- Treating ITF as part of PAYE. It is a separate return to a separate body, and LIRS will not remind you.
- Paying without filing the payroll return, which leaves the ITF free to assess on its own estimate.
- Losing the receipt. The compliance certificate depends on proof of payment presented to the area office.
Budgeting it from the US
For planning, accrue 1% of gross annual payroll each month as a liability, then pay once in the first quarter of the following year. Treat any training reimbursement as upside rather than a budget assumption, because it depends on evidence and a timely application. If your subsidiary has fewer than five staff and modest turnover, write down why it is not liable, with the headcount and turnover figures for the year, so the position is documented if an ITF inspector or a counterparty asks for a certificate.
Where Pryme fits
The Compliance agent can add the 1 April ITF date to the statutory calendar and prepare the payment for approval from naira held on a Pryme Business Account.
Questions people ask
Who pays ITF in Nigeria?
Employers with five or more employees, or fewer than five with annual turnover of ₦50 million or more, under the ITF (Amendment) Act 2011.
How much is the ITF contribution?
1% of annual payroll. A payroll of ₦48 million, for example, means ₦480,000 for the year.
When is ITF paid?
Annually, not later than 1 April of the following year, according to a 2019 procedure note. Confirm the current date with your ITF area office.
Is ITF the same as NSITF?
No. ITF is 1% of annual payroll for training; NSITF is 1% of total monthly payroll for employees' compensation. Both can apply to the same employer.
Sources
- Mondaq (TNP): The ITF levy, to pay or not to pay (17 Feb 2020) · accessed Oct 2026
- LawCare Nigeria: Procedure for company registration with the Industrial Training Fund (14 Sep 2019) · accessed Oct 2026
- ThisDay: ITF refunds N6.5bn to contributing employers (8 Apr 2019) · accessed Oct 2026
- NSITF: Services, Employees' Compensation Scheme · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.