The three payroll levies nobody tells you about

Ask a founder about payroll tax and they'll usually mean PAYE. Ask about the other three deductions sitting quietly on top of it — ITF, NSITF, and NHF — and most go blank. That gap is expensive, because all three are real, all three are enforced, and none of them show up automatically once you start hiring.

ITF, the Industrial Training Fund levy, is 1% of your total annual payroll, owed by the employer, once you cross five staff or fifty million naira in annual turnover — whichever comes first. It funds industrial skills training nationally, and it's the one most businesses bidding for government contracts get stopped on, because a missing ITF certificate disqualifies a bid as fast as a missing tax clearance.

NSITF works differently in purpose but identically in shape: also 1% of payroll, also employer-only, but it funds compensation for workplace injury, illness, or death arising from employment — Nigeria's rough equivalent of workers' compensation insurance. It applies from your very first employee, not at a five-person threshold.

NHF is the odd one out — it's deducted from the employee, not paid by the employer. 2.5% of basic salary, for anyone earning above minimum wage, remitted to the Federal Mortgage Bank of Nigeria. In exchange, contributing staff become eligible for NHF-backed mortgage loans, so it's one of the few statutory deductions employees generally view as a benefit rather than a tax.

The reason these three get lumped together in founder conversations isn't coincidence — they're the three most commonly audited payroll obligations for SMEs, and getting one wrong tends to mean you got all three wrong, since they draw from the same payroll data. If you're setting up payroll compliance for the first time, treat this as one project, not three separate ones.

Verify current thresholds and rates directly with ITF, NSITF, and FMBN before filing — see the Resources page for direct links.