NSITF and NECA Agreement | KPMG | NG

Agreement between NSITF and NECA on the implementation and administration of the Employee’s Compensation Act, 2010

NSITF and NECA Agreement

The highlight of the Agreement is the definition of “payroll” for the purpose of computing employer’s contribution to the Employee’s Compensation Fund (ECF or “the Fund”)

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Agreement NSITF NECA

The Nigeria Social Insurance Trust Fund (NSITF) and Nigeria Employers’ Consultative Association (NECA) have signed an Agreement on the implementation and administration of the Employee’s Compensation Act, 2010 (ECA or “the Act”). The Agreement, which was recommended by a Joint Committee of NSITF and NECA, will guide the administration of the ECA from 1 January 2017.

The highlight of the Agreement is the definition of “payroll” for the purpose of computing employer’s contribution to the Employee’s Compensation Fund (ECF or “the Fund”). Under the ECA, employers are required to make a minimum monthly contribution of 1% of their total monthly payroll to the ECF. However, the term “payroll” is not defined in the Act. The base for ECF contribution has, therefore, been a point of dispute between NSITF and employers since the enactment of the ECA.

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