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The short answer
Three levies sit beside PAYE and pension on Nigerian payroll. NSITF's employees' compensation contribution is 1% of total monthly payroll, paid by every registered employer; the ITF levy is 1% of annual payroll for employers with five or more staff, or fewer with turnover of ₦50m or more; and NHF is 2.5% of an employee's monthly income, which PwC says is now voluntary for private sector employees.
Once a US company employs people in Nigeria, through a subsidiary or an employer of record, the payroll carries more than tax and pension. These three bodies are less familiar to founders abroad, and their rules come from different laws. Here is what each one is, the rate and threshold, and how payment works. Information only, not legal advice.
At a glance
| Levy | Who pays | Rate | Basis | Threshold |
|---|---|---|---|---|
| NSITF (Employees' Compensation) | Employer | 1% | Total monthly payroll | All registered employers |
| ITF | Employer | 1% | Annual payroll | 5+ employees, or fewer with ₦50m+ annual turnover |
| NHF | Employee (employer deducts) | 2.5% | Monthly income (basic) | Compulsory for public sector; voluntary for private sector |
NSITF: employees' compensation
The Nigeria Social Insurance Trust Fund runs the Employees' Compensation Scheme under the Employees' Compensation Act 2010. Its services page states that every registered employer contributes 1% of total monthly payroll, through its Employer Self-Service Portal. The scheme pays compensation for workplace injury, disease and death; the page lists disability benefit at 90% of remuneration. Registration carries a one-time onboarding fee, and employers obtain and renew a certificate of compliance; the page does not show the amounts.
The point is not academic. In a case reported on 7 May 2025, the National Industrial Court ordered an employer to compute and pay its 1% minimum monthly contribution going back to July 2011.
ITF: training levy
The Industrial Training Fund collects a training contribution under the ITF Act as amended in 2011. According to a Mondaq analysis, it applies to employers with five or more employees, or fewer than five with annual turnover of ₦50m or more, at 1% of annual payroll, and the Federal High Court has treated it as a contribution rather than a tax. A guide from LawCare Nigeria says new employers register on Form 7A at an ITF area office, existing employers file Form 5A and pay through the ITF portal or Remita, and payment is due not later than 1 April of the following year. The compliance certificate is often asked for in contracts and other dealings with government.
NHF: housing fund
The National Housing Fund, administered by the Federal Mortgage Bank of Nigeria, collects 2.5% of monthly income. LawCare Nigeria's overview describes employer registration on form NHF1 and employee registration on NHF2. PwC's summary, reviewed 29 May 2026, says the employer deducts the contribution and remits it to FMBN within one month, that NHF is compulsory for public sector employees, and that private sector employees are no longer required to contribute and may do so voluntarily. For a private employer, that means asking each employee whether they want to contribute, and keeping their written choice.
Staff who contribute can later apply for FMBN housing products; for how that works from abroad see NHF contributions from the US.
Worked example
Example only: a subsidiary with six staff and a total monthly payroll of ₦3,000,000 (₦36,000,000 a year).
- NSITF: 1% × ₦3,000,000 = ₦30,000 a month, paid by the employer.
- ITF: 1% × ₦36,000,000 = ₦360,000 for the year, paid by the employer by 1 April of the following year.
- NHF: two staff opt in, each with basic pay of ₦200,000; 2.5% = ₦5,000 each, deducted from their pay and remitted to FMBN.
Employer cost for the year, before pension and group life: ₦360,000 NSITF (₦30,000 × 12) plus ₦360,000 ITF = ₦720,000.
Because NHF is now voluntary for private staff, include the choice in onboarding paperwork and repeat it each year, so that a change of mind is recorded rather than assumed.
Records to keep
Each levy produces paperwork you will be asked for later, often by a client, a bank or a government buyer rather than the levy body itself. Keep, for each year:
- NSITF registration, monthly payment receipts and the current certificate of compliance.
- ITF registration, the annual return on Form 5A, the payment receipt and the compliance certificate.
- Each employee's written NHF choice, their NHF participation number if they contribute, and the monthly remittance evidence to FMBN.
- The payroll summaries the levies were calculated from.
The Nigeria Tax Administration Act 2025 requires tax records to be kept for at least six years after the year of assessment, and it is sensible to hold levy records for the same period.
If you use an employer of record
The EOR's Nigerian entity should already be registered with NSITF and ITF. Ask how it charges these levies to you (often within its fee or as a pass-through cost) and for evidence of payment; see employer of record in Nigeria. For where these sit alongside PAYE and pension, see running payroll for staff in Nigeria and the Ledger's NHF, NSITF and ITF.
Where Pryme fits
A Pryme Business Account can pay levy and contribution amounts from its naira balance after you approve each payment, and the Compliance agent can prepare a calendar of due dates. Check each body's own payment channel before paying; see compliance.
Questions people ask
Is NHF compulsory for private companies in Nigeria?
PwC's summary, reviewed in May 2026, says private sector employees are no longer required to contribute and may contribute voluntarily at 2.5%.
How much is NSITF contribution?
1% of total monthly payroll, paid by the employer, according to NSITF's services page.
Who pays ITF in Nigeria?
Employers with five or more staff, or fewer than five with annual turnover of ₦50m or more, at 1% of annual payroll.
When is the ITF levy due?
LawCare Nigeria's guide says not later than 1 April of the year after the payroll year. Confirm with your ITF area office.
Sources
- NSITF: Services (Employees' Compensation Scheme) · accessed Oct 2026
- National Industrial Court: NSITF v NECO Staff School (7 May 2025) · accessed Oct 2026
- Mondaq: The ITF levy, to pay or not to pay (17 Feb 2020) · accessed Oct 2026
- LawCare Nigeria: Procedure for registration with the ITF (14 Sep 2019) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, other taxes (reviewed 29 May 2026) · accessed Oct 2026
- LawCare Nigeria: Overview of the National Housing Fund scheme (17 Oct 2024) · 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.