NHF, NSITF and ITF: The Other Payroll Deductions Explained

Three statutory items ride along with PAYE and pension on every Nigerian payroll: the National Housing Fund, the Employees' Compensation Scheme run by NSITF, and the Industrial Training Fund levy. Only one of them comes out of staff pay. Mixing them up is an easy mistake, so this guide starts there.

Who pays what, at a glance

The rule of thumb: NHF is a deduction; NSITF and ITF are employer costs. Neither NSITF nor ITF should ever appear as a line on an employee's payslip.

NHF: the employee's housing contribution

The National Housing Fund Act requires Nigerian workers earning above the Act's threshold, in both the public and the private sector, to contribute 2.5% of basic monthly salary to the Fund. The employer deducts it and remits it to FMBN; the employer doesn't match it (NHF Act, Cap N45).

Two things that aren't settled

• The base. The Business Facilitation (Miscellaneous Provisions) Act 2022 amended NHF wording towards "monthly income". Payroll providers have read this differently; one widely used vendor notice says assessable income stays at basic salary until there's clarification (Sage). Most Nigerian payrolls still use basic.
• Whether it's compulsory for every private employer. Commentary has gone back and forth on this for years, and the 2025 tax reforms didn't resolve it in the sources we could find. NHF contributions remain deductible for PAYE under the Nigeria Tax Act 2025.

We found no official monthly remittance deadline we could verify. Remit monthly, and confirm the date with FMBN.

Worked example

Aisha Bello's basic salary is ₦250,000 a month.

• NHF: 2.5% × ₦250,000 = ₦6,250 a month, deducted from her pay.
• Annual NHF: ₦6,250 × 12 = ₦75,000, which also reduces her chargeable income for PAYE.

If your adviser tells you to use monthly income instead of basic, the same rate on her ₦400,000 gross would give ₦10,000. Pick one basis on advice, write it down, and apply it to everyone.

NSITF: the employer's compensation contribution

The Employees' Compensation Act 2010 makes employers contribute at least 1% of total monthly payroll to the Employees' Compensation Scheme, which NSITF administers. The scheme pays compensation for workplace injury, disease and death (NSITF).

• Employer only. The employer bears the whole contribution. It isn't deducted from staff pay.
• The base. An agreement between NSITF and NECA defines payroll as total remuneration, excluding pension (KPMG).
• Paying. Employers register with NSITF, submit a schedule, and pay through Remita after NSITF's assessment.

Wave 1's payroll guide noted NSITF as due by the end of each month. We couldn't confirm that date against an official source for this article, so treat it as a working assumption and confirm with NSITF.

Example. Adebayo & Co. Logistics in Ikeja has a monthly payroll of ₦18,420,000. NSITF at 1% is ₦184,200 for the month, paid by the company on top of salaries.

ITF: the employer's training levy

The Industrial Training Fund Act requires employers to pay 1% of annual payroll to the ITF. Since the 2011 amendment, the levy applies to employers with five or more employees, or fewer than five with annual turnover of ₦50 million or more (Mondaq).

• Due date. Summaries put payment on or before 1 April of the following year (Proshare, Deloitte summary). One source quotes a late-payment penalty of 5% of the unpaid amount per month. Both come from commentary rather than the current ITF website, so check before relying on them.
• Reimbursement. Employers that train staff and meet the ITF's conditions can claim part of the levy back. That's worth a conversation with your adviser.

Example. Adebayo & Co.'s 2026 payroll is ₦221,040,000 (12 × ₦18,420,000). ITF at 1% is ₦2,210,400, due by 1 April 2027 on the dates above.

A monthly check that catches most errors

1. Payslips show NHF, PAYE and pension only as statutory deductions. Any NSITF or ITF line on a payslip is a mistake.
2. NHF uses one documented base for every employee.
3. NSITF is 1% of the month's total payroll, excluding pension.
4. An ITF accrual builds monthly (1% of each month's payroll), so the April payment isn't a surprise.
5. Each payment has a receipt filed against the month it covers.

Our statutory remittance calendar puts these dates beside PAYE, pension, VAT and WHT.

How Flux helps

Flux Payroll calculates and tracks NHF, NSITF and ITF alongside PAYE and pension on every pay run. Employees see their own deductions on the self-service payslip, and you get statutory remittance views, so each amount is ready to pay. Flux doesn't file or pay these remittances for you: your team stays in control of the payment and keeps the receipt.