Workstat Employer Report 2026
The True Cost of an Employee
Gross pay is not what an employee costs. Employer pension, NSITF, ITF and group life add about 11% before any benefits. The rules, worked examples at five salaries, and the deadlines that trigger penalties.
The report in five numbers
A ₦500,000 salary costs an employer about ₦555,000 a month before any benefits. The difference is statutory: pension, the Employees’ Compensation Scheme run by NSITF, and the ITF training levy. This report sets out each cost, works through five salaries, and lists the deadlines that turn a cost into a penalty.
Gross is not the cost
What a ₦500,000 salary costs each month
Statutory costs only, before benefits and group life.
Gross pay ₦500,000
What the employee is paid
Employer pension ₦45,000
10% of basic, housing and transport
NSITF ₦5,000
1% of payroll, Employees' Compensation Scheme
ITF ₦5,000
1% of annual payroll, shown monthly
Two familiar deductions are not on this list. PAYE and NHF come out of the employee’s pay, so they do not add to cost. They are still the employer’s responsibility to deduct and remit, and late payment makes the employer liable.
Pension and group life
Under the Pension Reform Act 2014, employers with three or more staff pay at least 10% of each employee’s basic salary, housing and transport allowance, on top of the employee’s 8%. Where those three make up 90% of pay, the employer’s share is about 9% of gross. The same Act requires group life insurance worth at least three times each employee’s annual total emolument. The law sets the cover, not the premium, so get quotes.
NSITF and ITF
The statutory costs on top of pay
NSITF’s Employees’ Compensation Scheme charges every employer 1% of total monthly payroll and pays compensation for workplace injury, disease and death. The Industrial Training Fund levy is 1% of annual payroll for employers with five or more staff or turnover of ₦50 million or more, due once a year by 1 April.
Worked examples
| Monthly gross | Employer pension | NSITF | ITF | Monthly cost |
|---|---|---|---|---|
| ₦70,000 | ₦6,300 | ₦700 | ₦700 | ₦77,700 |
| ₦150,000 | ₦13,500 | ₦1,500 | ₦1,500 | ₦166,500 |
| ₦300,000 | ₦27,000 | ₦3,000 | ₦3,000 | ₦333,000 |
| ₦500,000 | ₦45,000 | ₦5,000 | ₦5,000 | ₦555,000 |
| ₦1,000,000 | ₦90,000 | ₦10,000 | ₦10,000 | ₦1,110,000 |
Over a year, a ₦500,000 salary costs ₦6.66 million against ₦6 million gross. For a team of 20 on that salary, statutory costs add ₦13.2 million a year.
Deadlines and penalties
| Payment | Due | Who bears it |
|---|---|---|
| PAYE | By the 10th of the following month, to the state of residence | Deducted from the employee |
| Pension | Within seven working days of paying salaries | Employee 8%, employer at least 10% |
| NHF | Within one month of deduction | Deducted from the employee |
| NSITF | Monthly | Employer, 1% of payroll |
| ITF | Once a year, by 1 April | Employer, 1% of annual payroll |
Late pension remittance attracts a penalty of at least 2% of the unpaid amount for each month. In October 2026 PenCom reported recovering ₦36.6 billion from defaulting employers, and other agencies audit too. Budgeting the full cost up front is cheaper than paying it late.
Price a hire in minutes
The full report has the cost tables for 20 salary levels and a one-page budgeting sheet. Our PAYE calculator shows the employee side.
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Methodology
Costs are Workstat calculations from the statutory rates: employer pension of at least 10% of basic, housing and transport (Pension Reform Act 2014), NSITF of 1% of total monthly payroll (Employees' Compensation Act 2010) and ITF of 1% of annual payroll (Industrial Training Fund Act, as amended in 2011). Worked examples assume basic, housing and transport make up 90% of gross pay and that the employer meets the ITF threshold. Group life premiums, health insurance and other benefits are excluded because they vary by employer.
