Employer Cost Calculator

What this calculator adds to gross pay

The figure an employee sees on a payslip is only part of what the business pays. Four employer-side items commonly sit on top of gross pay, and each is explained in more detail in our guides.

• Employer pension. At least 10 percent of monthly emoluments (basic, housing and transport) under the Pension Reform Act 2014. It is paid in addition to salary, not deducted from it.
• NSITF. One percent of the monthly payroll under the Employee Compensation Act 2010, paid by the employer. It is not a deduction from the employee.
• ITF. One percent of annual payroll for covered employers. Whether you are covered depends on headcount or turnover, so confirm your position with the Industrial Training Fund.
• Group life insurance. A premium for cover of at least three times annual total emoluments, which the Pension Reform Act requires employers with three or more employees to maintain.

Worked example

A business pays an employee ₦300,000 a month: ₦150,000 basic, ₦90,000 housing and ₦60,000 transport. Employer pension is 10 percent of ₦300,000, or ₦30,000. NSITF is 1 percent of ₦300,000, or ₦3,000. ITF is 1 percent of the annual payroll of ₦3,600,000, or ₦36,000 a year, which is ₦3,000 a month. If the group life premium is ₦12,000 a year, that is ₦1,000 a month. The monthly cost is ₦337,000 against a gross of ₦300,000, a 12.3 percent uplift, or ₦4,044,000 a year.

Limits of this estimate

The calculator uses the statutory minimum rates as commonly stated. Your employer pension share may be higher by choice or contract, ITF and NSITF rules can be updated, and insurance premiums vary by insurer and by risk. Recruitment, equipment, training, benefits in kind and office costs are not included. Use the result to plan, not to file. See our disclaimer, and use our PAYE and net pay calculator for the employee side of the same salary.