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The National Housing Fund Act 1992 (the “Act”) establishes the National Housing Fund (the “Fund”) into which deductions from employees’ salaries and other monies required by the Act are paid.

Any employee earning N3,000 (three thousand Naira) and above per annum in either the public or private sector in Nigeria is required to contribute 2.5% of their monthly income into the Fund.

Employers deduct 2.5% from the monthly salary of employees and remit into the Fund. The Act uses the mandatory “shall” in respect of the obligation of an employer to make deductions and remit same to the Fund.

Although the Act makes no provision for a threshold of number of employees an employer must have in its employment in order for the Act to apply, the Act provides that any employer who has an employee earning a basic salary of N3,000.00 per annum shall make the deductions from the employee’s salary and remit same to the FMBN. However, from informal enquiries at the FMBN, we understand that in practice, the FMBN require that employers with 20 employees and above should register with the FMBN and remit deductions on behalf of the employees to the Fund.

The Fund is managed by the FMBN and the FMBN shall have a right of access to inspect such books of account maintained by the employer in respect of deductions and remittances.

Employees can access their contributions in the Fund at 60 (sixty) years of age or after 35 (thirty-five) years of service at an interest rate to be prescribed by the Minister of Housing. Such refund is to be made within 3 (three) months of the application for same by the contributing employee.

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