A company does not get to decide for itself whether it owes the Industrial Training Fund a contribution. The ITF Act sets two figures, and where your business sits against both gives you the answer.
Who the Act makes liable
Contribution is compulsory for any employer with 5 or more employees. That is the figure most people quote, and on its own it already catches most registered businesses.
It is not the whole rule. A business with fewer staff than that can still be liable once its annual turnover reaches ₦50 million. Staff count and turnover are tested separately. Either one, on its own, can bring an employer into the Act.
This is why a small consultancy with a handful of staff should not assume it is automatically outside the scheme. A strong billing year can change the answer even if nobody was hired.
The narrow exemption
Only a firm that sits below both figures is outside the Act at the same time: fewer staff than the threshold, and turnover under the same limit.
Get either number wrong and the exemption does not apply. A four-person firm with a good year's revenue owes the levy on the turnover test alone, whatever its headcount says.
This narrow reading matters most right before a bid, when a tender desk asks for proof either way.
Where BPP's wording differs
Bidders usually meet this question through a tender document, not the Act itself. Fewer than 5 staff or annual turnover under ₦50 million, and that phrasing reads as an "or": either fewer staff or lower turnover is enough on its own.
That is looser than the Act. The ITF Act applies "and": a firm needs both conditions together before it counts as exempt. A business that relies on BPP's wording alone could still owe ITF under the Act itself.
Before a bid, use the Act's stricter reading. It costs nothing to be cautious, and a procuring entity can still ask you to show ITF compliance even where a looser reading suggested you were clear.
Checking your own numbers
Two things to pull together before you decide either way:
- Average headcount for the year, using ITF's own definition of who counts as an employee, not just permanent staff on payroll.
- Turnover for the same period, taken from management accounts or your last filed return.
If either figure sits close to the line, ask your accountant to confirm it before you claim an exemption on a live bid. A wrong claim is harder to fix after submission than before it.
Common mistakes
- Assuming a small headcount alone is enough, without checking turnover at all.
- Quoting BPP's tender guide as though it were the Act itself.
- Working out staff numbers from a single quiet month rather than the full year.
- Leaving the check until the bid deadline is already close.
If your numbers put you inside the Act, the ITF compliance certificate guide covers registration and the certificate itself, and a vetted partner firm can file your ITF compliance certificate once you know contribution is due. For the rest of what a federal tender asks for, see the tender compliance certificates checklist.