National Housing Fund Nigeria: Employer Guide (2026)

April 14, 2026

Payroll and People

National Housing Fund Nigeria: Employer Guide (2026)

Nankyer Ndom

Have Questions?

We’re happy to guide you always.

Last updated: 7 July 2026. Facts checked against current Nigerian regulation at time of update.

National Housing Fund Nigeria: Employer Guide (2026)

Quick answer: The National Housing Fund (NHF) requires you to deduct 2.5% of each employee’s basic salary and pay it to the Federal Mortgage Bank of Nigeria (FMBN). The deduction only applies to employees earning above ₦70,000 monthly. Your cost as an employer is ₦0. The benefit to your employees: access to housing loans at 6% interest, far below any commercial rate.

What you’ll need:

Your company’s CAC certificate and TIN
Each employee’s basic salary figure (not gross)
Access to the FMBN employer registration portal
Estimated cost: ₦0 (employee-funded contribution)
Estimated time: About 30 minutes to set up; under 10 minutes monthly after that

How the National Housing Fund Nigeria Works

Under the Business Facilitation Act 2022, private-sector employees can opt out of NHF. Treat it as opt-in per employee, not a default deduction.

For employees who are enrolled, the math is simple. You take 2.5% of their basic salary (not gross), send it to FMBN every month, and that money builds into a contribution balance they can borrow against for housing.

Here is the key thing your employees get in return: NHF loans go up to ₦15,000,000 at 6% annual interest, a rate that commercial banks do not come close to.

Who Must Contribute

Every employee on your Nigerian payroll earning above the national minimum wage of ₦70,000 monthly must contribute. That includes:

Full-time employees
Contract staff on payroll
Expatriates working in Nigeria
Directors receiving salaries

Exception: Businesses with fewer than 3 employees may qualify for an exemption. If your team is small, confirm with FMBN before enrolling.

If an employee’s salary drops below ₦70,000, stop the deduction. Resume it when they cross the threshold again.

How to Calculate NHF Deductions

The base is basic salary only. Transport allowance, housing allowance, and other components do not count.

Gross emoluments typically include Basic + Housing + Transport + Other Allowances. NHF ignores everything except the basic portion.

Worked Example 1: Mid-level Employee

Component	Amount
Gross monthly salary	₦300,000
Basic salary (60% of gross)	₦180,000
NHF deduction (2.5% of basic)	₦4,500

That ₦4,500 goes to FMBN. Your payslip shows it as a deduction before PAYE is computed.

Worked Example 2: Junior Employee Near the Threshold

Component	Amount
Gross monthly salary	₦95,000
Basic salary (assumed at half of gross for this example)	₦47,500
NHF deduction (2.5% of basic)	₦1,188

Because gross is above ₦70,000, the deduction applies. Note that NHF is not computed on the ₦70,000 threshold itself. It is always 2.5% of whatever the basic salary figure is.

The number that trips up most payroll teams: always confirm what percentage of the package is labelled “basic salary” in the offer letter. That is the only figure NHF touches.

Why Your Employees Should Care About NHF

The interest rate gap is the story here.

Loan type	Amount	Interest rate	Monthly payment (15-yr term)
NHF loan (FMBN)	₦5,000,000	6%	~₦48,000
Commercial bank mortgage	₦5,000,000	20%	~₦80,000

That is ₦32,000 per month saved. Over 15 years, the NHF route saves your employee roughly ₦5,760,000 in interest. For most of your team, this is the most valuable financial benefit you offer, and it costs your business nothing.

Loan types available through NHF:

Loan type	Maximum	Interest	Repayment
Individual housing loan	₦15,000,000	6%	Up to 30 years
Cooperative loan	₦15,000,000 per member	6%	Up to 30 years
Estate development	Variable	6%	Project-specific

To qualify, an employee needs at least 6 months of contributions, proof of income, a land title or building plan, and a 30% equity contribution.

Step-by-Step: NHF Registration and Monthly Payment

Step 1: Register Your Business with FMBN

Go to the FMBN employer registration portal. You will need your CAC certificate, TIN, and a list of employees with their basic salary details.

FMBN assigns you an employer code starting with “NHF”. Keep it. You need it for every payment.

Pro tip: Register new employees in their first month. Delayed registration means delayed loan access, and your employee’s 6-month clock does not start until FMBN has them on record.

Step 2: Calculate Each Employee’s Deduction

2.5% of basic salary. That is the whole formula. Run it for every enrolled employee above ₦70,000 gross.

Common mistake: Using gross salary as the base. If your payroll software is set to “gross,” fix it before your first payment.

Step 3: Remit to FMBN by the 15th

Upload your contribution schedule through the FMBN portal. Include each employee’s name, NHF number, basic salary, and contribution amount. Late payments can affect your employees’ loan eligibility.

Step 4: Keep Contribution Records

FMBN issues certificates showing each employee’s total contributions. Employees need these to apply for NHF loans. Keep copies on file and share statements with employees on request.

Cost Breakdown

Item	Employer cost	Notes
FMBN registration	₦0	Free online
Monthly remittance	₦0	Employee-funded
Portal access	₦0	Web-based
Payroll software to automate this	₦500/employee/month	Covers PAYE, pension, NHF, payslip, and remittance

Lint’s Smart Payroll is ₦500 per employee per month, a flat fee that covers PAYE computation, pension, NHF, payslip, and remittance. The ₦50 disbursement fee is waived on Smart Payroll. If you are already running payroll manually across 10+ employees, that ₦500/head is less than the time you spend on spreadsheets each month.

Common NHF Mistakes Nigerian Employers Make

1. Using gross salary instead of basic salary

NHF only applies to basic. If your offer letters bundle everything into one “gross” figure, you need to define the basic component clearly before computing deductions.

2. Missing the 15th-of-the-month deadline

Late contributions delay your employees’ loan eligibility. Set a calendar reminder or automate it.

3. Not registering employees from day one

The 6-month contribution clock starts at registration. A two-month admin delay means a two-month delay in loan access. Register in the first week.

4. Forgetting salary increment updates

When you process a pay rise, update the NHF base too. The deduction should grow proportionally with basic salary.

5. Treating NHF as mandatory for everyone

Under BFA 2022, private-sector employees can opt out of NHF. Do not default-enrol employees who have formally opted out.

FAQs

What happens if an employee leaves before taking an NHF loan?

Their contributions stay in the FMBN system. They can access loans through a future employer or as a self-employed contributor after 6 months of consistent contributions.

Can expatriates contribute to National Housing Fund Nigeria?

Yes. All employees on a Nigerian payroll must contribute, regardless of nationality.

Can an employee withdraw their NHF contributions as cash?

Only through a housing loan, or if they become permanently disabled. There are no general cash withdrawal options.

How long does FMBN take to approve an NHF loan?

Complete applications are typically processed within 60 to 90 days. Incomplete documentation is the most common delay.

Does NHF affect PAYE calculations?

Yes. NHF is subtracted from gross emoluments (along with employee pension and NHIS [National Health Insurance Scheme] where applicable) before computing chargeable income for PAYE. This means NHF contributions modestly reduce your employee’s PAYE bill each month.

What if my company has fewer than 3 employees?

You may qualify for an NHF exemption. Check directly with FMBN before assuming you are exempt.

Related Tools

NHF Contribution Calculator: Calculate monthly deductions per employee
Free PAYE Calculator (2026): See take-home pay, PAYE, pension, and NHF together in one run
Lint Smart Payroll: Run salary, PAYE, pension, and NHF in a single funded payroll run

Sources: National Housing Fund Act · Federal Mortgage Bank of Nigeria (FMBN) loan conditions and processing guidelines · FMBN withdrawal policies · NHF Act exemption clauses · Business Facilitation Act 2022

Last updated: 6 July 2026