NSITF and ITF: what Nigerian employers pay
What Nigerian employers pay to the NSITF and the ITF on top of salaries, what Achekam prepares for each, and what the employer still files and pays.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
Most payroll costs are visible on the payslip. Two Nigerian ones are not. Contributions to the Nigeria Social Insurance Trust Fund (NSITF) and the levy for the Industrial Training Fund (ITF) are paid by the employer on top of salaries, and nothing is deducted from staff for either. Because employees never see them, they are easy to leave out of a budget, and easy to forget when the cash is tight.
This article explains what each one is at the time of writing, the date question the research could not settle for the NSITF, what Achekam prepares for both, and the part that remains the employer's job.
The NSITF under the Employees' Compensation Act
Nigerian employers pay 1% of total payroll to the NSITF under the Employees' Compensation Act 2010. The contribution funds the Employees' Compensation Scheme, which covers workers injured in the course of their work.
Two words in that sentence matter. "Employers" means the cost is the business's, not the staff's. "Total payroll" means it is worked out on the whole wage bill, not employee by employee on a selection of pay items.
The NSITF's own page on its services to employers covers the Employees' Compensation Scheme: registering on the employer portal, the employer-paid contribution of 1% of monthly payroll, monthly returns, compliance certificates, and the injuries and benefits covered. Register before your first payroll so that contributions have somewhere to go.
A remittance date the research could not settle
The research behind Achekam's Nigeria pack could not confirm the monthly remittance date for NSITF contributions; it is marked uncertain. Achekam therefore does not give you a date for it. Ask the NSITF directly, through its employer portal or office, what date it expects and how the monthly return is made, then put that date in your own calendar.
An uncertain date in the research is not an absent obligation. The contribution is still due each month; only the exact day needs confirming.
The ITF levy and the annual return Achekam prepares
The ITF levy is the second employer-only cost. Achekam's Nigerian payroll calculates it, alongside PAYE, pension, the National Housing Fund and the NSITF, from a tax table that a person at your business confirms. Achekam also prepares the ITF annual return from your approved pay runs.
The facts behind this article do not state the ITF levy's rate or the conditions under which an employer becomes liable for it. Check both with the Fund when you confirm the payroll table, so that you know what the figure Achekam produces is based on and whether it applies to your business.
The annual return is the part to diarise. A yearly obligation is easy to lose among monthly ones, and the person who handled it last year may not be the person who handles it this year. Note the date the ITF expects the return, who will prepare it from Achekam's figures, and who will check it before it goes in.
What Achekam prepares from approved runs
From approved pay runs, Achekam prepares Nigeria's monthly statutory schedules: PAYE per State, pension per pension fund administrator, NHF and NSITF. It also prepares the annual employer return per State and the ITF annual return. The schedules come from the same approved figures as the payslips, so the NSITF schedule for a month agrees with the payroll for that month.
Employer costs in the wages journal
When a pay run is approved, Achekam posts it to your own ledger as a wages journal, with the amounts owed to the tax authority and the funds shown as liabilities. For NSITF and the ITF, the journal does two things at once: it records the cost to the business as an expense, and it records what is owed to each fund as a liability.
A worked example in words. The January run is approved. The wages journal shows salaries and the employer's costs as expenses, and among the liabilities it shows the NSITF contribution owed for January. When the business pays the NSITF, that liability is cleared. If the liability is still there at the end of February, the January contribution has not been paid.
Filing and paying yourself
Achekam does not file or pay Nigerian payroll returns. A person files on the fund's own portal and records the filing with the reference it gave. A second person confirms each payment. That applies equally to the monthly NSITF return and to the ITF's annual return.
The confirming person should compare three things: the amount on the schedule, the amount on the payment receipt, and the reference recorded in Achekam.
Checking the figures with each Fund
Before you rely on either figure year after year:
- Register with the NSITF and the ITF as an employer, if you have not already.
- Confirm the NSITF's monthly remittance date and return process with the NSITF.
- Confirm the ITF levy's rate and your liability with the ITF.
- Compare the first month's NSITF schedule with 1% of your total payroll.
- Compare the ITF figure Achekam produces with what the ITF tells you is due.
- Record each filing and payment, with its reference, for a second person to confirm.
- Check each month that the NSITF liability in the ledger has been cleared.
Both funds sit beside the deductions that do come from staff pay, pension and NHF; see paying pension contributions to each PFA and National Housing Fund deductions. If you are about to hire for the first time, start with before a Nigerian business pays its first employee.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
