Nigerian payroll involves several statutory contributions. They are often confused, and only some are deducted from your pay.
Pension — the Contributory Pension Scheme
Under the Pension Reform Act 2014, contributions total a minimum of 18%:
- Employer: 10%
- Employee: 8%
Both are calculated on pensionable emoluments — basic salary plus housing allowance plus transport allowance — not on total pay.
That distinction matters. If a large share of your package sits in other allowances, your pension contributions are lower than your gross would suggest.
Late payment attracts a 2% monthly penalty on unpaid contributions.
NSITF
The Nigeria Social Insurance Trust Fund covers workplace injury compensation. The employer contributes 1% of monthly payroll.
Nothing comes out of your pay for this.
NHF
The National Housing Fund. The employee contribution is 2.5% of monthly income.
Worth knowing: private sector employees are now excluded from compulsory compliance — participation is voluntary. If it appears as a mandatory deduction on your payslip and you did not opt in, ask about it.
ITF
The Industrial Training Fund is an employer obligation tied to staff training. Non-compliance costs the employer part of its training refund privilege.
Check your PFA statement
Your pension contributions go to a Pension Fund Administrator of your choosing. You can request statements and verify that contributions are actually arriving.
A deduction appearing on your payslip does not prove the employer remitted it. Gaps show up years later, when the money matters most.
What to verify
That your pension is calculated on the correct emoluments, that contributions reach your PFA, and that no fund appears as a deduction when it should be an employer cost.