ITF contribution rules in Nigeria can become more important as your company grows and takes on more employees. Under Nigeria’s current Industrial Training Fund rules, having 25 employees or more can trigger contribution obligations.

The confusing part is that a quick Google search may still bring up the older rule, which said businesses with five employees, or fewer than five employees but an annual turnover of ₦50 million or more, were required to contribute to the ITF.

That information isn’t completely made up. It used to be the law. But the law has since changed, and the current threshold is different.

First, what is the Industrial Training Fund?

The Industrial Training Fund, usually just called ITF, exists to support skills development and training in Nigeria. One way the system is funded is through contributions from qualifying employers.

Historically, the requirement became quite broad. The Industrial Training Fund (Amendment) Act 2011 said an employer with five or more employees, or even an employer with fewer than five employees but annual turnover of at least ₦50 million, had to contribute 1% of total annual payroll.

That is why you will still see the five-person and ₦50 million figures in old compliance guides. Then another law arrived.

How the law changed the ITF contribution threshold

Nigeria’s Business Facilitation (Miscellaneous Provisions) Act 2022, which commenced on 8 February 2023, amended a number of business-related laws. One of them was the Industrial Training Fund Act.

And it did not simply tweak section 6. It replaced it. The new section says that an employer with 25 or more employees, and which is not operating within a free trade zone, must contribute 1% of its annual payroll to the ITF.

Notice what disappeared. The ₦50 million turnover test. The new provision doesn’t say:

“25 employees OR ₦50 million turnover.” It says 25 or more employees.

So, on the face of the amended legislation, a company with 10 employees and very high turnover does not become liable under section 6 merely because its revenue crossed ₦50 million. That is a pretty significant change.

Let’s use an example

Suppose Brightline Limited has 24 employees. Its annual turnover is ₦800 million. Under the old 2011 wording, turnover alone could have brought it within the ITF contribution requirement.

Under the substituted section introduced by the Business Facilitation Act, the relevant employer threshold is now 25 or more employees.

Now imagine Brightline hires one more person. Employee number 25 arrives on Monday. That is the point where somebody in HR, finance or compliance should at least be asking: “Have we checked our ITF position?”

How much is the ITF contribution?

For employers covered by the current section 6 requirement, the contribution is 1% of annual payroll.

And payroll here does not just mean basic salary. Under the ITF legislation, it includes basic pay, allowances and other entitlements payable to employees, whether those payments are made within or outside Nigeria.

For example, if your company’s relevant annual payroll is ₦240 million, the ITF contribution would be ₦2.4 million.

That is not a small amount, which is why it makes sense for finance to factor it into the budget from the start rather than deal with it after the financial year has ended.

The ITF contribution deadline

The payment deadline is another important date for employers to keep in mind.

Under the legislation, the contribution for each year is due no later than 1 April of the following year. ITF’s current Revenue Department Service Level Agreement also identifies the period from January to 1 April as the window for employers to make their training contribution. So if the contribution relates to the previous year’s payroll, 1 April is the key deadline.

Missing that deadline can also become expensive. According to ITF’s current published SLA, a 5% penalty is charged for each month of default. That means a delayed payment can quickly increase the amount the business eventually has to pay.

Here is where things get messy

There is another reason employers need to be careful when checking ITF requirements online.

Some of the information still available refers to the old rule. In fact, ITF’s currently published Revenue Department SLA still states that employers with five or more employees, or businesses with fewer than five employees but turnover of at least ₦50 million, are required to contribute.

However, the Business Facilitation Act later amended section 6 of the ITF Act. The amendment introduced a threshold of 25 or more employees, removed the ₦50 million turnover requirement and excluded employers operating within a free trade zone from the contribution requirement under section 6(1).

EY’s analysis of the amendment also reflects this position, stating that employers with fewer than 25 employees are no longer required to contribute under that section and that businesses operating within free trade zones are excluded.

This is a good example of why compliance teams should check the actual legislation rather than rely only on information found through an online search. Older guidance can remain online even after the law has changed.

If your organisation has fewer than 25 employees and receives an ITF assessment based on the old five-employee or ₦50 million turnover threshold, it is better not to simply ignore it. Check the assessment against the Business Facilitation Act, ask ITF to clarify the legal basis for the assessment and, where the amount involved is significant, consider obtaining professional advice.

What about free trade zones?

There was another important change. The substituted section 6 applies to employers with 25 or more employees “and not operating within a free trade zone.” That is quite different from the older 2011 wording, which expressly referred to organisations in free trade zones in the compliance framework.

So companies operating in Nigerian free trade zones should make sure their advisers are working from the amended legislation rather than an old ITF checklist.

Contractors should pay attention too

The revised section also separately addresses suppliers, contractors and consultants. It says a supplier, contractor or consultant with more than 25 employees that is bidding or soliciting contracts, business, goods or services must fulfil the statutory obligations relating to the training contribution.

This is one of those requirements that can suddenly matter when you’re trying to win a contract. Nobody wants to discover a missing compliance requirement while procurement is already waiting for the documents.

But ITF isn’t supposed to be just another levy

One part of the ITF requirement that is easy to overlook is that the contribution is ultimately tied to training and workforce development.

Under the ITF Act, contributing employers are expected to provide adequate training for their indigenous employees, particularly training that improves job-related skills, and to keep evidence that the training actually took place. The Act also requires such employers to accept students for industrial attachment.

So the idea is not simply that a company pays its contribution and that is the end of the matter.

The wider purpose is to encourage employers to invest in developing the skills of their workforce.

And the law also provides an incentive for employers that do this properly.

You may be able to get some money back

The ITF reimbursement scheme allows the Governing Council to refund up to 50% of an employer’s contribution where the employer’s training programme meets the Fund’s reimbursement requirements.

The important words here are “up to 50%” and “meets the requirements.”

The refund is not automatic. Employers need to show that the training was properly carried out and that the required records are available.

This is where some companies run into problems.

A business may spend a significant amount training its employees, but if attendance records, invoices, certificates and other supporting documents are not properly kept, claiming reimbursement later can become difficult.

It is not enough to say the training happened. The company needs to be able to prove it. That is why proper documentation should be part of the training process from the beginning, not something HR tries to piece together months later.

An ITF contribution checklist for employers

This rule isn’t complicated once the moving parts are separated. The problem is that a lot of businesses are working from different versions of the rule. One person remembers 25 employees from years ago.

Another remembers the 2011 amendment changing it to five. A website still mentions ₦50 million turnover. Then the Business Facilitation Act changes the threshold back to 25 and removes the turnover trigger.

You can see how somebody gets lost. So for 2026, the sensible approach is to work from the later statutory amendment, then verify the administrative process directly with ITF.

For an employer, I would check five things:

• Headcount: are you at or above 25 employees?
• Location: are you operating inside or outside a free trade zone?
• Payroll: have you correctly calculated annual payroll rather than using only basic salaries?
• Deadline: is the contribution process ready before 1 April?
• Training records: are you documenting employee training properly so the business can support compliance and any reimbursement claim?

If the business is approaching 25 employees, review its ITF contribution position before the next round of hiring. Keep payroll and training records together, check any assessment against the amended law, and ask ITF to explain anything that does not add up. A growing team should come with an updated compliance checklist.

ITF is only one part of that checklist. Our guides to pension contributions in Nigeria and NSITF employee compensation explain other employer responsibilities.

Need help checking your next step?

If you have questions about ITF contribution requirements or would like a consultation, someone at Startpal will be happy to talk through your business’s situation. Email support@mystartpal.com to get in touch.