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The short answer
Under the Industrial Training Fund (Amendment) Act 2011, an employer with five or more employees, or with fewer than five but an annual turnover of ₦50 million or more, must register with the ITF and pay 1% of its total annual payroll. Payment for a year is due by 1 April of the following year, and the ITF Compliance Certificate you receive is asked for in contract bids, expatriate quota and customs processes.
Who has to register with the ITF
The Industrial Training Fund was set up in 1971 to fund skills training in Nigerian industry and commerce. Until 2011 the levy applied only to employers with 25 or more staff. The Industrial Training Fund (Amendment) Act 2011 widened it considerably. As summarised by the law firm TNP on Mondaq (February 2020) and by LawCare Nigeria (September 2019), an employer is now liable if either test is met:
- it has five or more employees; or
- it has fewer than five employees but an annual turnover of ₦50 million or more.
The two tests are alternatives. A five-person design studio with modest turnover is caught; so is a two-person trading company turning over ₦60 million. Sole traders and small firms below both thresholds are outside the levy, though some still register for the certificate (see below).
How much: 1% of annual payroll
The contribution is 1% of the employer's total annual payroll. LawCare's summary of the Act describes payroll widely: basic pay plus allowances and other entitlements payable to employees, whether they work inside or outside Nigeria. That is broader than basic salary, so an employer who only counts basic pay will under-pay.
Worked example
Example only. A Lagos logistics company has 12 staff. Over 2026 it pays:
| Item | Annual amount (example) |
|---|---|
| Basic salaries | ₦30,000,000 |
| Housing and transport allowances | ₦14,000,000 |
| Other entitlements (13th month, leave pay) | ₦4,000,000 |
| Total annual payroll | ₦48,000,000 |
| ITF levy at 1% | ₦480,000 |
If the company had used basic salaries alone, it would have calculated ₦300,000 and been short by ₦180,000. The levy for 2026 would fall due by 1 April 2027.
Steps: registering and paying
Registration is done with the ITF Area Office that covers your registered address. The routes described by LawCare Nigeria are:
New employer with five or more staff
- Complete ITF Form 7A (available from the ITF).
- Submit it with the prescribed documents, typically your CAC incorporation documents and staff and payroll details, to the Area Office.
- Receive your ITF registration and start annual remittance.
Employer already registered
- Complete ITF Form 5A with your payroll figures and submit it to the Area Office for vetting.
- Generate a Remita Retrieval Reference (RRR) through the ITF pay portal or Remita.
- Pay the assessed amount into the ITF account through a bank.
- Take the proof of payment to the Area Office, which issues the Compliance Certificate.
New company with fewer than five staff
A newly formed company below the threshold that still needs a certificate, for instance to bid for a contract, can write to the ITF Area Manager on its letterhead, attach its Certificate of Incorporation and pay a concessionary sum, reported by LawCare in 2019 as ₦100,000. That figure is from 2019; confirm the current amount with your Area Office before paying.
Why the Compliance Certificate matters
For many businesses the certificate is the practical reason to register on time. LawCare's summary lists where it is needed:
- bids for contracts with federal ministries, departments and agencies, and with many private organisations;
- applications for expatriate quota approval;
- customs services for import and export, including for Free Trade Zone companies.
Procurement teams often ask for ITF, NSITF and PenCom certificates together. Our guides to NSITF registration and the other payroll deductions in Nigeria cover the rest of the set.
Penalties and disputes
LawCare's summary of the Act sets out fines for knowingly or recklessly filing false information or returns: ₦500,000 for a first offence and ₦1,000,000 for each later one. Officers of the company can face a ₦50,000 fine or two years' imprisonment for a first offence, and three years without the option of a fine after that. Failing to remit at all also carries penalties under the Act.
Some employers have challenged the levy, arguing it is a tax the Federal Government cannot impose in this way. TNP notes that the Federal High Court held the levy to be a "contribution" rather than a tax. TNP also notes that only the Director-General may make a best-of-judgment assessment, and may not delegate that to outside agents. If you receive an assessment from a consultant claiming to act for the ITF, ask to see the authority before paying. This is information, not legal advice; take advice on any dispute.
What to check first
- Count your employees at any point in the year, including staff on fixed-term contracts. Five is the line.
- If you have fewer than five, check last year's turnover against ₦50 million.
- Pull a full-year payroll total that includes allowances and other entitlements, not only basic pay.
- Find the ITF Area Office that covers your registered address before the 1 April deadline approaches.
- Ask procurement contacts whether your next bid needs an ITF certificate, so you are not applying in a rush.
New employers often only discover the levy when a tender asks for the certificate. Registering as soon as you cross either threshold avoids paying several years of arrears at once.
Where Pryme fits
The ITF levy is easiest to get right when payroll is complete and in one place. A Pryme Business Account includes payroll tools and a Finance agent that can prepare a year-end payroll summary for you to check before filing; a person approves anything above a set ceiling, and actions are recorded.
Questions people ask
Is ITF compulsory for small businesses in Nigeria?
It is compulsory if you have five or more employees, or fewer than five with annual turnover of ₦50 million or more, under the ITF (Amendment) Act 2011. Below both thresholds you are not liable.
How is the ITF 1% calculated?
On total annual payroll, which includes basic pay plus allowances and other entitlements, not basic salary alone.
When is ITF payment due?
The levy for a year is due not later than 1 April of the following year.
How do I get an ITF compliance certificate?
Submit Form 5A to your ITF Area Office, pay via an RRR generated on the ITF portal or Remita, then present the proof of payment; the Area Office issues the certificate.
Sources
- The ITF levy: to pay or not to pay, is that a question? (Mondaq / TNP, 17 Feb 2020) · accessed Oct 2026
- Procedure for company registration with Industrial Training Fund (LawCare Nigeria, 14 Sep 2019) · 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.