EOBI Contributions in Payroll: How the 5% + 1% Split Works

The Employees' Old-Age Benefits Institution (EOBI) provides pension and survivor benefits, but many payroll teams find the contribution rules confusing. If you get the base and the split right, the filing is clean. If not, you are paying for a correction later.

The contribution structure

EOBI contributions are calculated on a fixed minimum-wage base rather than on actual gross salary. The employer contributes 5% of that base and the employee contributes 1%, with the employer responsible for remitting both portions. Because the base is the statutory minimum wage and not the individual's full salary, a manager and a junior employee can carry the same EOBI line.

Who is actually covered

EOBI applies only to employees who are registered with the institution. New hires must be enrolled before contributions begin, and contributions stop when an employee separates and is deregistered. A common cause of over- and under-reporting is assuming everyone on the headcount is covered.

• Use the minimum-wage base, not gross pay, for the calculation.
• Employer 5% + employee 1% = 6% total on that base.
• Only registered employees generate contributions.
• The employer remits both shares together.
• Keep enrollment and deregistration dates aligned with joining and exit.

Doing EOBI by hand stops working as you grow, because the base is the same for everyone but enrollment status is not. Zaffre HRM, the HR and payroll module of Zaffre Axon by Zaffre Tech, lets you flag enrolled employees, pin the correct minimum-wage base, and auto-generate both the employer and employee lines on every payslip. When the base changes, you update one configuration value and every affected employee recalculates.

No more spreadsheet guesswork, and you get a contribution register you can file with confidence. To see EOBI handled end to end on real payroll data, Book a demo and we'll walk you through enrollment, calculation, and reporting.