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

The Employees' Old-Age Benefits Institution (EOBI) provides pension and survivor benefits, but its contribution mechanics confuse many payroll teams. Getting the base and the split right is the difference between a clean filing and a costly correction.

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. Treating every headcount as automatically covered is a common source of over- and under-reporting.

• 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.

Manual EOBI handling breaks down at scale because the base is uniform 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.

This removes the spreadsheet guesswork and produces a contribution register you can file with confidence. Want to see EOBI handled end to end on real payroll data? Book a demo and we'll walk you through enrollment, calculation, and reporting.