Statutory Deductions in Nigeria Payroll — PAYE, Pension, NHF, NHIA, NSITF, ITF and WHT

Two sides of every payroll

Nigerian payroll is more than PAYE. A compliant payrun computes employee deductions — PAYE, pension, NHF where opted in — and, on the employer's side, pension, NSITF, ITF, and NHIA contributions that never appear on a payslip but must be accrued, scheduled, and remitted on time. This page lists every statutory line, its basis, its rate, and who pays it, in one place.

The distinction matters: employee deductions reduce net pay and appear on the payslip; employer contributions cost the company and never appear on it. Most compliance failures come from treating this as one list.

Employee-side deductions

PAYE

Computed annually on chargeable income through the progressive bands — the first ₦800,000 at 0%, then 15% to 25% — and divided by twelve. The rules are covered in full in PAYE under the Nigeria Tax Act 2026, and you can check any salary on the Nigeria PAYE & net salary calculator.

Pension (employee)

8% of basic, housing and transport, remitted to the employee's Retirement Savings Account. Tax-deductible before banding.

NHF

2.5% of basic salary, voluntary for private-sector employees — a per-employee opt-in flag, not a blanket deduction. Deductible where opted in.

NHIA (employee share)

Commonly 5% of basic where the scheme deducts an employee share; many employers absorb the full contribution instead.

Employer-side contributions

Pension (employer)

A minimum of 10% of BHT, remitted together with the employee's 8% within seven working days of salary payment.

NSITF

1% of total monthly payroll under the Employees' Compensation Act — employer-only, remitted monthly.

ITF

1% of annual payroll for employers with 5 or more employees or turnover of ₦50,000,000 and above, remitted annually on or before 1 April of the following year.

NHIA (employer share)

Mandatory health cover at 5 or more employees; commonly 10% of basic from the employer, with the exact model set by the scheme.

WHT — adjacent, not payroll

Withholding tax applies to contractor and vendor payments, not employment income, and is remitted by the 21st of the following month. Finance teams usually track it beside payroll because the same people pay both; KoboHR flags non-employee payments as WHT-relevant so they are never mistaken for salary.

Remittance timing at a glance

• PAYE — by the 10th of the following month, to the relevant State Internal Revenue Service (SIRS).
• Pension — within 7 working days of salary payment.
• NHF — by the 10th of the following month.
• NHIA — by the 10th, per scheme.
• NSITF — monthly.
• WHT — by the 21st of the following month.
• ITF — annually, on or before 1 April of the following year.
• Employer annual PAYE return (Form H1) — by 31 January.

How KoboHR computes and evidences each line

• Every line is computed per payrun from versioned statutory configuration — the rates above, stamped by tax year.
• Schedules and remittance records are generated per scheme, ready to file.
• The dashboard shows each obligation as due or overdue, so nothing waits for memory.
• Every computation carries an audit trail back to its rule and basis.

See what these lines add up to with the employer cost calculator, follow the monthly cycle in the payroll guide for HR professionals, or read how KoboHR computes every statutory line.