What does an employee really cost? Cost-to-company in Nigeria
Gross salary is only part of the bill. Add the employer's statutory on-costs and a hire can cost 10–15% more than the headline number. Here's how to budget it properly.
When you offer someone ₦500,000 a month, that's not what they cost you. On top of gross sit the employer's statutory contributions — and if you budget on salary alone, you'll be short.
The employer on-costs
- Pension — employer adds 10% of Basic + Housing + Transport
- NHIS — employer adds 10% of basic, for employers with 10+ staff
- NSITF — 1% of payroll to the Employees' Compensation Scheme
- ITF — 1% of payroll for employers with 5+ staff or ₦50m+ turnover
Depending on your salary structure and which schemes apply, these add roughly 10–15% on top of gross before you've spent a naira on benefits like HMO.
Why the salary structure matters
Because employer pension is on BHT, how you split basic, housing and transport against other allowances changes your on-costs. Two people on the same gross can cost the company different amounts.
Headcount budgets built on gross salary alone are always optimistic. Build them on cost to company.
Budget it in seconds
Our free cost-to-company calculator adds the employer's pension, NHIS, NSITF and ITF to any salary and shows the true cost and the percentage uplift over gross — so your headcount plan reflects reality.
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