Last updated: 7 July 2026. Facts checked against current Nigerian regulation at time of update.
NHIS Employer Contribution in Nigeria (2026)
Quick answer: Health insurance in Nigeria no longer works on a single fixed statutory formula. There is no longer a single “5% employee + 10% employer of basic” rule. Premiums now vary by the plan your business chooses with an HMO. This guide explains how the scheme works today. It covers enrollment and how much to budget per employee..
What You Will Need
- Valid CAC business registration and TIN
- Employee records (names, NIN, employment letters)
- A chosen HMO partner (Hygeia, AXA Mansard, Reliance Health, Avon, Leadway Health, and others)
- A bank account for remittance
- Estimated timeline: 30 to 45 days for full enrollment and first payment
- Estimated cost: Varies by HMO plan chosen
[IMAGE: simple checklist graphic showing the 4 items above]
How NHIS Employer Contribution Nigeria Works Today
The National Health Insurance Authority Act 2022 replaced the old NHIS Act 2004. The change matters for your business because the old pricing formula changed too.
Health insurance premiums are now paid to HMOs on plan-based pricing. There is no longer a single statutory “5% employee + 10% employer of basic” formula. Premiums vary by chosen plan. Some blog posts quote “10% employer, 5% employee of basic salary.” Those figures come from the old NHIS Act 2004. They no longer apply today.. That framing is no longer the universal rule and should not be stated as a current statutory rate. In practice, you pick a plan with your HMO and agree a premium per employee. You then pay that agreed amount every month.. The employer typically covers most or all of the premium, depending on your HR policy.
The one thing that has not changed: health insurance for your employees is still mandatory once you cross the employee threshold set by the Act.
Worked Example: How to Budget for Health Insurance
Because premiums are now plan-based, here is how to think about the math.
Example A — Small team of 5:
- HMO plan cost: ₦15,000 per employee per month
- Employer covers 100% of premium
- Monthly cost for 5 employees: 5 × ₦15,000 = ₦75,000
- Annual cost: ₦75,000 × 12 = ₦900,000
Example B — Growing team of 20:
- HMO plan cost: ₦15,000 per employee per month
- Monthly cost for 20 employees: 20 × ₦15,000 = ₦300,000
- Annual cost: ₦300,000 × 12 = ₦3,600,000
The key budget variable is the HMO plan tier. A basic primary-care plan costs less than one that includes specialist and hospital cover. Ask your HMO to show you at least two plan options before committing.
[IMAGE: side-by-side plan comparison table from a sample HMO, showing basic vs. full tier]
Step-by-Step Enrollment for Employers
Step 1: Register Your Business with the NHIA
Visit the NHIA portal or your nearest state office. Bring:
- Certificate of incorporation
- Tax identification number (TIN)
- Employee list with NIN numbers
- Bank account details
Timeline: 7 to 14 days for approval.
Cost: Registration is typically free.
Pro tip: Start this before you hit the mandatory employee threshold. Waiting until after you cross it puts you on a tight clock.
Step 2: Choose Your HMO Partner
Health insurance premiums are paid to HMOs such as Hygeia, Avon, AXA Mansard, Reliance Health, and Leadway Health, on plan-based pricing.
Before you sign with any HMO, check:
- Which hospitals are in their network in your employees’ locations
- Whether the plan covers specialist referrals and hospital admissions
- What the annual renewal terms look like
Pro tip: Ask your employees which hospitals they use near their homes. A great HMO plan is useless if none of the network hospitals are close by.
Step 3: Enroll Your Employees
Each employee needs to submit:
- NHIA enrollment form
- Passport photograph
- Valid ID (NIN, driver’s license, or voter’s card)
- Employment letter
Timeline: 14 to 21 days for employee HMO cards to be issued.
Step 4: Set Up Monthly Payments
Pay premiums monthly. Your HMO will provide a payment schedule and account details.
Deadline: Within 30 days of salary payment.
Method: Bank transfer to your HMO’s account or through approved payment platforms.
Under the Business Facilitation Act 2022, private-sector employees can opt out of NHF [National Housing Fund, a separate mandatory savings scheme]. Treat NHF as opt-in per employee, not a default deduction. Note this is for NHF only. For health insurance, the duty to pay sits with the employer under the NHIA Act.
What Your Employees Get
NHIS health cover typically includes the following, depending on plan tier:
- Primary healthcare consultations
- Specialist consultations (with referral)
- Hospital admissions
- Prescription medications (from the NHIS drug list)
- Laboratory tests and diagnostics
- Maternity care (antenatal, delivery, postnatal)
- Emergency care
- Basic dental care
Usually not included:
- Cosmetic procedures
- Non-essential surgeries
- Private hospital room upgrades
- Medications outside the essential drug list
- Treatment abroad
For the full current benefits schedule, visit the National Health Insurance Authority official website.
Cost Comparison Table
Because premiums are plan-based, the table below uses an illustrative monthly HMO premium. Replace with your actual HMO quote.
| Team Size | Monthly Premium Per Employee (Illustrative) | Total Monthly Employer Cost |
|---|---|---|
| 5 staff | ₦15,000 | ₦75,000 |
| 10 staff | ₦15,000 | ₦150,000 |
| 20 staff | ₦15,000 | ₦300,000 |
| 50 staff | ₦15,000 | ₦750,000 |
Get your exact premium from your chosen HMO before signing off on annual HR budgets.
Lint Payroll covers PAYE computation, pension, NHF, payslips, employee portal, and filing with every authority for ₦500 per employee per payroll run. No separate transfer fees. For health insurance, your HMO premium sits outside that fee and is paid directly to the HMO.
Common NHIS Compliance Mistakes
1. Still Using the Old “10% + 5% of Basic” Formula
This came from the NHIS Act 2004. There is no longer a single statutory “5% employee + 10% employer of basic” formula. If your accountant is still quoting those percentages for compliance, flag it for review.
2. Picking the Cheapest HMO Without Checking Coverage Area
A plan that doesn’t include hospitals near your employees’ homes provides very little real value. Check the network map before you sign.
3. Forgetting Contract and Remote Staff
The Act covers all people providing services to your business on a regular basis. Do not assume only permanent staff need coverage.
4. Missing Monthly Payment Deadlines
Late payments can suspend your employees’ healthcare access. Set a recurring payment reminder linked to your payroll cycle.
5. Incomplete Employee Enrollment
Registering senior staff but leaving out junior or part-time employees. All covered employees must be enrolled fully, with valid IDs and enrollment forms submitted.
NHIS Penalties for Non-Compliance
The 2022 Act introduced stricter penalties:
- Failure to register: Up to ₦500,000 fine
- Late registration: ₦50,000 fine
- Non-remittance: 10% penalty on the outstanding amount plus 2% monthly interest
- False information provided: Up to ₦1,000,000 fine or 2 years imprisonment
These penalties are worth taking seriously. Enforcement has increased since the new Act came into force.
Frequently Asked Questions
Do contract staff count toward the employee threshold?
The Act covers all individuals providing services regularly, regardless of classification. If 5 or more people work for your business regularly, you likely need coverage.
Can different employees use different HMOs?
No. All employees under one employer must use the same HMO. Employees can request changes during annual renewal periods.
What if an employee leaves mid-month after payment?
Contributions are not prorated. If you have paid for the month, the employee keeps cover through that month. Their next employer picks up from the following month.
Are remote employees in other states covered?
Yes, but check that your HMO has network hospitals in your remote employees’ locations. Some HMOs have limited state coverage outside Lagos and Abuja.
What if an employee already has private health insurance?
NHIS is mandatory regardless of existing private cover. The employee can keep private insurance as extra cover, but NHIS contributions are still required.
What if my business drops below the mandatory threshold?
Once enrolled, you stay in the NHIS system. You can apply for exemption if you remain below the threshold for 12 consecutive months.
How does health insurance interact with PAYE and pension?
Health insurance premiums may be deductible as a relief when computing PAYE [Pay As You Earn income tax]. Statutory deductions (employee pension, NHF, NHIS where applicable) and reliefs are subtracted before applying PAYE bands to chargeable income. Confirm this with your payroll software or accountant.
Related Tools
- Free PAYE Calculator: See take-home pay, PAYE, and pension in seconds.
- Lint Payroll: Run salary, PAYE, pension, and salary advances in one funded run.
- NHIA Official Website: Current HMO list, enrollment forms, and benefit schedules.
Your employees’ health cover should not be another admin task sitting on your to-do list for three months. Get your HMO quote, enroll your team, and set up a recurring payment. That is the whole job.
Start sorting your payroll compliance today at lint.finance/business/payroll.
Last updated: July 6, 2026
Sources: National Health Insurance Authority Act 2022; NHIA Act 2022 Sections 87-89; Nigeria Tax Act 2025 (Sixth Schedule)
Related on Lint
- Free PAYE Calculator (2026) — See take-home pay, tax, and pension in seconds.
- Lint Payroll — Run salary, PAYE, pension, and salary advances in one funded run.
Sources
- NHIA Act 2022
- National Housing Fund Act
- NTA 2025 Sixth Schedule
Related on Lint
- Free PAYE Calculator (2026) — see take-home pay, tax and pension in seconds.
- Lint Payroll — run salary, PAYE, pension and salary advances in one funded run.
