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The Employer Compensation Scheme (ECS) is a statutory requirement in Nigeria designed to provide financial support and protection to employees who suffer work-related injuries or occupational diseases. For employers, understanding how the scheme functions and what the law requires will assist with compliance.
Under Section 33(1) of the Employees Compensation Act, 2010, every employer in Nigeria must contribute 1% of total monthly payroll to the ECS Fund. These payments form the backbone of the compensation system and ensure that employees are protected in the event of workplace accidents.
Contributions must be remitted monthly, on or before the last day of each month, in accordance with Section 13(2) of the Nigeria Social Insurance Trust Fund Act. The Nigeria Social Insurance Trust Fund (NSITF), authorised under Section 57 of the Employees Compensation Act, administers and manages the scheme.
In addition to monthly contributions, employers must submit an annual statement to the NSITF by the last day of February
Although the Act does not explicitly define payroll, the NSITF and the Nigeria Employers’ Consultative Association (NECA) have issued guidance on how the contribution base should be calculated.
For ECS purposes, payroll equates to “remuneration”, excluding:
This interpretation provides employers with a practical and standardised method for determining their monthly contribution obligations.
In addition to monthly contributions, employers must submit an annual statement to the NSITF by the last day of February, as outlined in Section 40 of the Employees Compensation Act.
The statement must include:
These filings help the NSITF assess risks, monitor compliance, and maintain accurate records for both employers and employees.
