Category: Salary & Tax

December in Nigeria often comes with the question, “Will we get 13th month this year?” Some workers receive an extra month’s pay; others get a performance bonus in the first quarter; many get nothing. This guide explains what 13th-month pay and bonuses actually are, whether your employer is obliged to pay them, how they are taxed under the 2026 rules, and how to plan the money so it does not vanish by mid-January.

What is 13th-month pay?

A 13th-month salary is an extra payment, usually equal to one month’s basic or gross salary, paid once a year, often in November or December. It spreads 13 payments across a 12-month year. Some employers pay it as a fixed contractual benefit; others call it a “Christmas bonus” and pay it at their discretion.

What is a bonus?

A bonus is any extra payment on top of regular salary. Common types in Nigerian workplaces include:

• Performance bonus: tied to your appraisal rating or targets.
• Profit-share bonus: linked to company results, often paid after year-end accounts.
• Sales commission: a percentage of what you sell.
• Sign-on or retention bonus: paid to join or to stay, often with clawback conditions.
• Leave allowance: technically an allowance rather than a bonus, but it behaves similarly in your budget.

Is my employer required to pay 13th month?

We have not found any provision in Nigeria’s Labour Act requiring private employers to pay a 13th-month salary. In practice, your entitlement depends on:

1. Your employment contract or offer letter. If it lists 13th-month pay as part of your annual package, it is a contractual right.
2. The staff handbook or condition of service. Many organisations put bonus policies here.
3. A collective agreement negotiated by a union in your sector.
4. Established practice. Where a payment has been made consistently for years, there may be an argument it has become an implied term. That is a legal question for a lawyer, not something to assume.

Read your offer letter. If it says “annual gross: 13 × monthly gross”, the 13th month is part of your pay, not a gift. If it says bonuses are “discretionary”, the employer can decide not to pay.

How 13th-month pay and bonuses are taxed

Bonuses and 13th-month pay are generally part of employment income, so they are added to your annual gross for PAYE. Under the Nigeria Tax Act 2025, personal income is taxed in bands: 0% on the first ₦800,000 of chargeable income, then 15%, 18%, 21%, 23% and 25% on higher slices (PwC Tax Summaries).

Because the bands are marginal, the bonus is taxed at your top rate, not your average rate. If most of your income already sits in the 15% band, each extra naira of bonus is taxed at about 15% until it crosses into the 18% band.

Why the deduction can look bigger in the bonus month

Payroll systems often calculate PAYE month by month. In the month a bonus is paid, the system may treat your income as unusually high and deduct more. Over the full year, PAYE should be reconciled to the correct annual figure. If the bonus month deduction looks extreme, ask payroll for a breakdown.

Is pension deducted from bonus?

The Pension Reform Act 2014 calculates contributions on monthly emoluments, which PenCom describes as including at least basic salary, housing and transport allowances (PenCom FAQ). Whether a bonus attracts pension depends on how your employer defines emoluments. Check your payslip.

Illustration (invented figures)

An employee earns ₦250,000 gross a month (₦3,000,000 a year) and receives a 13th-month payment of ₦250,000. After an 8% pension deduction and no other reliefs, chargeable income without the bonus is ₦2,760,000, which sits entirely in the 15% band. Adding ₦250,000 bonus (assume no pension on it) gives ₦3,010,000. The first ₦240,000 of the bonus is taxed at 15% (₦36,000) and the last ₦10,000 at 18% (₦1,800). Tax on the bonus is about ₦37,800, leaving roughly ₦212,200.

A plan for your 13th month or bonus

A bonus feels like free money, so it is the easiest income to waste. Decide the split before it arrives. A simple framework:

Priority	Suggested use
1. January survival	Set aside enough for January rent instalment, school fees or transport if December spending usually leaves you short.
2. Expensive debt	Clear loan app balances, overdrafts or salary advances first. See our guide to getting out of loan app debt.
3. Emergency fund	Top up toward 3–6 months of essential expenses. See our emergency fund guide.
4. Big planned costs	Next rent, school fees or a planned purchase. See budgeting for school fees.
5. Enjoyment	A fixed, guilt-free amount for Christmas, family and travel.

One practical rule: give yourself a fixed enjoyment percentage you agreed on in advance (for example 20–30%), and send the rest to its destination on the day the money arrives.

Plan for family expectations

In many Nigerian families, December is when relatives expect support. That is part of life, but it should be in the plan, not a surprise. Write down who you will support and how much, and treat it as a budget line. If requests exceed it, you can say, “This is what I budgeted this year.” Our family budget guide covers this.

What if 13th month does not come?

If it is discretionary, there may be nothing to claim. If it is in your contract and not paid, write to HR asking politely when it will be paid, quoting the clause. Keep copies. If it becomes a dispute, consult a labour lawyer or your union. Either way, do not spend a bonus before it lands in your account.

Negotiating bonuses

When you receive a job offer, ask whether the annual package includes a 13th month, what the bonus policy is, and whether bonuses have actually been paid in recent years. A higher fixed monthly salary is usually more reliable than a promised bonus. Our salary negotiation guide covers how to compare offers.

For planning the year around expected bonuses and big expenses, the 2027 Printable Planner has monthly pages where you can mark pay dates and due dates.

Checklist before the money arrives

• Confirm with HR whether the payment is contractual or discretionary, and the expected date.
• Estimate the after-tax amount using your marginal PAYE rate.
• Write your split: January buffer, debt, emergency fund, planned costs, enjoyment.
• Set up the transfers so they can go out the same day the money lands.

Frequently asked questions

Is 13th-month salary compulsory in Nigeria?

We are not aware of a general legal requirement for private employers. It depends on your contract, handbook, any collective agreement, and possibly established practice.

Is 13th month taxed?

Generally yes. It forms part of employment income and is taxed at your marginal PAYE rate.

Why was so much tax taken from my bonus?

Monthly payroll calculations can over-deduct in a bonus month. Ask payroll whether PAYE will be reconciled over the year.

I resigned in October. Do I get a pro-rated 13th month?

Only if your contract or company policy provides for pro-rating. Check the clause and ask HR in writing.

Should I use my bonus to invest?

Only after expensive debt is cleared and you have an emergency fund. Then you can consider longer-term options.

This guide is general information and is not legal, tax or financial advice. Entitlement to 13th-month pay depends on your contract. Confirm your situation with HR, a labour lawyer or a tax professional.

If you design, write, code, edit videos, manage social media or sell any other service as a freelancer in Nigeria, the tax reforms that took effect in 2026 apply to you. Many freelancers have never filed a tax return because nobody deducts PAYE from their income. That is changing: banks are now expected to ask taxable people for a tax ID, and the new laws make registration a clear legal duty. This guide explains, in plain language, how freelancer income is taxed under the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025, and what to do step by step.

The two laws you need to know

• The Nigeria Tax Act 2025 (NTA) sets out what is taxed and at what rates, including personal income tax bands.
• The Nigeria Tax Administration Act 2025 (NTAA) sets out how tax is administered: registration, tax IDs, returns, records and penalties.

Both took effect from 1 January 2026. A consolidated copy of the administration law is hosted by the Tax Appeal Tribunal (NTAA 2025 PDF).

Step 1: Register and get a tax ID

Section 4 of the NTAA says every taxable person must register with the relevant tax authority and obtain a Taxpayer Identification (“Tax ID”). If you earn money from freelance work, you are carrying on a trade or business, so this applies to you whether your clients are in Nigeria or abroad.

For individuals, the National Identification Number (NIN) is used as the tax ID, and existing TINs remain valid. You can check or retrieve your tax ID on the official Nigerian Tax ID portal run by the Nigeria Revenue Service and the Joint Revenue Board. Registration is free. Be wary of anyone charging you to “register your TIN”.

Step 2: Understand which authority taxes you

As an individual freelancer, your personal income tax is generally administered by the Internal Revenue Service of the state where you are resident, for example LIRS in Lagos. Federal bodies such as the Nigeria Revenue Service deal with companies and some other taxes. If you register a limited company for your freelance business, the company’s tax is a separate matter.

Step 3: Work out your taxable income

Freelancers are taxed on profit, not on everything clients pay. In simple terms:

1. Add up gross income for the year: all client payments, converted to naira at the rate you actually received or a reasonable documented rate.
2. Subtract allowable business expenses: costs incurred wholly and exclusively to earn that income. For freelancers this often includes internet data, software subscriptions, a share of electricity or fuel for work, platform fees, equipment depreciation and coworking space.
3. Subtract personal reliefs and eligible deductions that apply to you, such as voluntary pension contributions under the Pension Reform Act, NHF contributions, life insurance premiums and rent relief (20% of annual rent paid, capped at ₦500,000).
4. The result is your chargeable income.

Keep receipts and bank statements for every expense you claim. A clean record is what makes a deduction stand up if your state tax office asks questions.

Step 4: Apply the personal income tax bands

The same bands apply to freelancers as to salaried workers (PwC Tax Summaries):

Annual chargeable income	Rate
First ₦800,000	0%
Next ₦2,200,000	15%
Next ₦9,000,000	18%
Next ₦13,000,000	21%
Next ₦25,000,000	23%
Above ₦50,000,000	25%

Illustration (invented figures)

A freelance designer receives ₦4,800,000 in the year and has ₦600,000 of documented business expenses. She pays ₦900,000 rent a year, so rent relief is ₦180,000.

Gross income	₦4,800,000
Less business expenses	−₦600,000
Less rent relief	−₦180,000
Chargeable income	₦4,020,000
First ₦800,000 at 0%	₦0
Next ₦2,200,000 at 15%	₦330,000
Remaining ₦1,020,000 at 18%	₦183,600
Annual tax	₦513,600

That is roughly 10.7% of her gross receipts. A freelancer whose chargeable income is ₦800,000 or less would owe no personal income tax, but should still register.

Step 5: File and pay through self-assessment

Because no employer runs PAYE for you, you file a self-assessment return with your state tax authority and pay the tax due. Many states let you register, file and pay online. Check your state IRS website for the exact annual filing deadline and accepted payment channels, since procedures vary by state.

What about the “small company” exemption?

You may have heard that small businesses pay no tax under the new law. That refers to companies. The NTA defines a small company as one with gross turnover of ₦100 million or less and total fixed assets not exceeding ₦250 million, and exempts it from company income tax (Deloitte summary). Baker Tilly notes that small companies are also relieved of capital gains tax and the development levy (Baker Tilly).

If you operate as an individual (sole proprietor or business name), you pay personal income tax on your profits, not company income tax, so the 0% company rate does not automatically apply to you. Some established freelancers incorporate a company for this and other reasons, but incorporation brings its own filing duties and costs. Speak to an accountant before deciding.

Penalties for not registering

A summary by Pryme of section 100 of the NTAA reports a penalty of ₦50,000 for the first month of failing to register and ₦25,000 for each further month (Pryme). Confirm the current penalty with your state IRS or the law itself, but the message is clear: registering is cheaper than ignoring it.

Record-keeping system for freelancers

• Separate account: receive all client payments into one account you use only for business.
• Invoice log: invoice number, client, date, amount in original currency and naira received.
• Expense log: date, vendor, amount, what it was for, and a photo of the receipt.
• Tax set-aside: move a fixed share of every payment (many freelancers use 10–15%) into a separate savings pot so the tax bill is not a shock.

A spreadsheet is enough. The Nigerian Salary Budget Planner can be adapted, with an income tab for invoices and an expense tab for business costs. If your income varies month to month, read our guide to side hustles for salary earners, which covers managing irregular income.

Salary earner with freelance side income?

Your employer only taxes your salary. Freelance income on top is still taxable, and your total income determines which bands apply. In principle, you should declare the side income through self-assessment. Ask your state IRS how it handles people with both PAYE and self-employment income.

Frequently asked questions

I get paid by foreign clients in dollars. Is that taxable in Nigeria?

If you live in Nigeria and do the work here, that income is generally taxable in Nigeria. Convert it to naira using documented rates and keep the records. If tax was withheld abroad, ask a tax professional about relief.

Do I need to charge VAT?

Many small freelancers fall under small business thresholds, but VAT rules have their own definitions. Check with the Nigeria Revenue Service or an accountant before adding VAT to invoices.

My income is below ₦800,000 a year. Should I bother?

Yes, register. You may owe no tax, but a tax ID is increasingly required by banks, and filing builds a record that helps when you apply for loans or visas.

Can I deduct my laptop?

Equipment used for business is generally recovered through capital allowances spread over its useful life rather than deducted all at once. An accountant can apply the right method.

Where do I pay?

Personal income tax is paid to your state of residence through the channels listed on the state IRS website. Always get an official receipt or electronic acknowledgement.

This guide is general information based on the sources linked above and is not tax advice. The 2025 tax laws are new and their interpretation is still developing. Confirm your obligations with your state Internal Revenue Service or a qualified tax professional.

“NHF” is one of the most confusing lines on a Nigerian payslip. Some workers have it deducted for years without knowing what it is. Others have never seen it. This guide explains the National Housing Fund in plain language: who must contribute, how much, what you can get from it, how refunds work, and how the 2023 change to the law affects private sector workers.

What is the National Housing Fund?

The National Housing Fund (NHF) was created by the National Housing Fund Act No. 3 of 1992. Its stated aims include mobilising funds to provide affordable houses for Nigerians and ensuring a steady supply of long-term housing loans to contributors (NHF Act, sections 1–2). The fund is managed by the Federal Mortgage Bank of Nigeria (FMBN), which lends through primary mortgage banks to contributors who want to buy, build or improve a home.

How much do you contribute?

Section 4 of the Act sets the contribution at 2.5% of basic monthly salary. It is calculated on basic salary, not your full gross pay. So if your basic is ₦150,000, the contribution is ₦3,750 a month, even if your housing and transport allowances push your gross pay much higher.

The Act also states that contributions earn interest at 4% per year. That is low compared with Nigeria’s recent inflation, so NHF is best understood as a route to a housing loan, not as a savings product.

Employers deduct the contribution at source and must remit it to FMBN within one month of the deduction (section 9). Self-employed people are expected to remit their own contributions (section 10).

Is NHF compulsory? The 2023 change

This is where much of the confusion comes from. The original Act required most workers to contribute. The Business Facilitation (Miscellaneous Provisions) Act 2023 amended section 4. According to a client alert by Templars law firm:

• Public sector employees earning the national minimum wage or above must still contribute.
• Self-employed individuals are required to contribute.
• Private sector employees are no longer compelled to contribute and may do so voluntarily.

The same alert notes that the Nigeria Employers’ Consultative Association (NECA) advised member companies that employees could choose to opt out or continue. If you work for a private company and still see NHF on your payslip, it may be because nobody asked you to choose. You can raise it with HR.

What do you get for contributing?

The main benefit is access to an NHF mortgage loan through a primary mortgage bank. FMBN’s own published conditions change over time, so always check its website or a mortgage bank before planning around them. Commonly stated conditions include:

• You must have contributed for at least six months before applying.
• Repayments must be affordable relative to your income (lenders often look at what share of your income the repayment takes).
• The loan is for a residential house, not for buying bare land.
• NHF loans can usually be accessed once in a lifetime.

Some mortgage banks publish NHF product pages listing a loan ceiling and requirements, such as FHA Mortgage Bank’s NHF page. Treat any figure you find as a guide and confirm the current ceiling and interest rate with the bank before you commit.

How to check your NHF contributions

1. Find your NHF number. It may be on your payslip, or HR can give it to you. Without it, contributions can be hard to trace.
2. Use FMBN’s contributor channels. FMBN runs an online contributor portal and has branch offices where you can request a statement.
3. Compare with payslips. Add up the NHF deductions on your payslips for a year and compare with the statement. Gaps may mean your employer deducted but did not remit.

Can you get your NHF money back?

Section 20 of the Act, as summarised in the Templars alert, says a contributor who has not taken an NHF housing loan is entitled to a refund of contributions plus interest if they have:

• reached 60 years of age, or
• retired from employment and become unable to continue contributing.

Refunds are also processed for estates of deceased contributors and in cases of permanent incapacity, through documented procedures. The Act does not clearly cover refunds for a private sector worker who simply opts out under the 2023 amendment, so ask FMBN directly about your case. If you leave the workforce early, keep your NHF number and records safe so you can claim later.

NHF and your tax

Contributions to the National Housing Fund are listed as an eligible deduction under section 30 of the Nigeria Tax Act 2025, so they reduce your chargeable income for PAYE. In practice the saving is modest: at a 15% marginal rate, ₦3,750 of NHF contributions saves about ₦562 of tax a month. Our PAYE guide shows how deductions fit into the calculation.

Should a private sector worker keep contributing?

There is no single right answer. Consider these points:

Reasons to keep contributing	Reasons to opt out
You plan to buy or build a home in Nigeria and want access to an NHF loan.	You have no plan to use an NHF mortgage.
You value a forced saving habit.	The 4% interest is well below inflation.
It gives a small tax deduction.	You would rather put the money into an emergency fund or investment you control.

If you opt out, put the same amount somewhere useful rather than letting it disappear into spending. Our emergency fund guide compares savings options, and the Nigerian Salary Budget Planner lets you track the redirected amount as its own savings line.

Practical steps this month

1. Check your latest payslip for an NHF line and note the amount.
2. Confirm it is 2.5% of your basic salary, not of gross pay.
3. Ask HR for your NHF number if it is not shown.
4. Request an FMBN statement and compare it with your payslips.
5. If you are in the private sector, decide whether to stay in, and tell HR in writing.

Common NHF mistakes

• Not knowing your NHF number, which makes contributions hard to trace later.
• Assuming deductions were remitted without checking a statement.
• Expecting NHF to grow like an investment, when the Act sets interest at 4%.
• Losing records when changing jobs.

Frequently asked questions

Is NHF the same as pension?

No. Pension goes to your Retirement Savings Account with a PFA under the Pension Reform Act. NHF goes to the Federal Mortgage Bank of Nigeria and is linked to housing loans. They are separate deductions with separate rules. See our pension guide.

Is NHF calculated on my gross salary?

No. The Act sets it at 2.5% of basic monthly salary. If your payslip shows 2.5% of gross, ask payroll to check.

Can I use NHF to buy land?

Mortgage banks generally state that NHF loans are not for purchasing land alone. Confirm current rules with FMBN or your mortgage bank.

I changed jobs. Do I lose my contributions?

No. Contributions are linked to your NHF number, not your employer. Give the number to your new employer if you continue contributing.

Can self-employed people join?

Yes. Section 10 of the Act covers self-employed persons, and informal workers can often participate through registered cooperative societies.

This guide is general information based on the sources linked above and is not legal or financial advice. NHF rules, loan ceilings and rates can change. Confirm your position with the Federal Mortgage Bank of Nigeria, a licensed primary mortgage bank or your employer.

Your payslip is the only document that shows, line by line, how your agreed salary turns into the money that lands in your account. Many Nigerian workers glance at the net figure and close the PDF. That is a mistake, because errors in pension, tax, allowances or deductions are common, and they are much easier to fix in the month they happen than a year later. This guide walks through every section of a typical Nigerian payslip, explains what each deduction means under current law, and gives you a simple monthly checklist.

Why reading your payslip matters

A payslip is evidence. It proves your income when you apply for a loan, a visa or a rented apartment. It shows the pension your employer says it deducted, which you can compare against your Retirement Savings Account statement. It shows the PAYE tax taken from you, which matters for any tax clearance certificate you may need. If your employer ever underpays you, the payslip is the first record you will rely on. Reading it every month takes five minutes and protects all of that.

The four sections of a typical payslip

Layouts differ between employers and payroll software, but almost every payslip has the same four blocks:

1. Employee and period details: your name, staff ID, department, pay period, bank, and often your RSA PIN and tax ID.
2. Earnings: basic salary and allowances such as housing, transport, utility, meal or leave allowance, plus overtime or bonuses.
3. Deductions: statutory ones (PAYE, pension, sometimes NHF and health insurance) and voluntary ones (cooperative, loan repayment, union dues).
4. Summary: gross pay, total deductions and net pay, sometimes with year-to-date totals.

Section 1: Check your details first

It sounds basic, but confirm that your name is spelt exactly as it is on your BVN and NIN, that the pay period is correct, and that the RSA PIN printed (if any) matches the one on your Pension Fund Administrator statement. A wrong PIN can send your pension contribution to the wrong account or leave it unallocated. Under the Nigeria Tax Administration Act 2025, an individual’s NIN can serve as their tax ID, so make sure HR has your correct NIN on file.

Section 2: Earnings

Basic salary

Basic salary is the foundation of your pay. It matters more than its size suggests, because several deductions are calculated from it. The National Housing Fund contribution, for example, is set at 2.5% of basic monthly salary under section 4 of the National Housing Fund Act.

Allowances

Housing and transport allowances are the most common. They are important because the pension contribution under the Pension Reform Act 2014 is calculated on your monthly emoluments, which PenCom describes as basic salary, housing and transport allowances (at minimum). Other allowances such as utility, meal, entertainment or “other” allowance may be listed separately. Compare all of these against your offer letter. If your contract promised a ₦30,000 transport allowance and the payslip shows ₦20,000, raise it.

Variable pay

Overtime, commissions, leave allowance, 13th-month pay and bonuses usually appear only in the months they are paid. They are generally part of taxable employment income, so expect PAYE to rise in those months. Our guide to 13th-month pay and bonuses covers this in more detail.

Section 3: Deductions

PAYE (income tax)

From 1 January 2026, PAYE is calculated under the Nigeria Tax Act 2025. The first ₦800,000 of annual chargeable income is taxed at 0%, and the remaining income is taxed in bands from 15% to 25% (PwC Tax Summaries). Workers earning the national minimum wage or less are not liable to PAYE. To check your figure, follow the worked examples in our PAYE calculation guide.

A key check: if you pay rent, ask whether payroll has applied rent relief (20% of annual rent, capped at ₦500,000). If it has not, your PAYE will be higher than necessary.

Pension

Under the Pension Reform Act 2014, the minimum employee contribution is 8% of monthly emoluments and the minimum employer contribution is 10%. Your payslip normally shows only your 8% as a deduction; the employer’s 10% may appear as a memo line or not at all. Either way, both should arrive in your RSA. Our pension guide explains how to check your statement.

National Housing Fund (NHF)

If you see “NHF” on your payslip, that is a 2.5% deduction from basic salary paid to the Federal Mortgage Bank of Nigeria. Since the Business Facilitation Act 2023, contribution is compulsory for public sector workers and self-employed people but voluntary for private sector employees, according to a Templars client alert. Read our full NHF explainer before deciding whether to keep contributing.

Health insurance

Some employers deduct a contribution for health insurance under the national scheme or a private HMO plan. Check whether the deduction matches what HR told you and that you actually have an active HMO card or enrolment number.

Voluntary deductions

Cooperative savings, staff loan repayments, union dues and welfare contributions fall here. These need your consent. If a new deduction appears that you did not sign up for, ask HR immediately. For cooperative savings, request a separate statement at least once a year so you can confirm the balance.

Section 4: Gross, total deductions and net pay

The arithmetic is simple, but check it anyway:

• Gross pay = basic + all allowances + any variable pay for the month.
• Total deductions = PAYE + pension + NHF + health + voluntary deductions.
• Net pay = gross pay − total deductions.

Then confirm that the net pay on the payslip is exactly what hit your bank account. A difference can mean a bank charge, a payroll error, or a deduction that was not printed.

A worked illustration

The figures below are invented for illustration only. They are not a salary benchmark.

Item	Amount (₦)
Basic salary	120,000
Housing allowance	50,000
Transport allowance	30,000
Gross pay	200,000
Pension (8% of 200,000)	−16,000
NHF (2.5% of basic, if contributing)	−3,000
PAYE (depends on reliefs; see the PAYE guide)	varies
Cooperative savings	−10,000

In this example, pension is calculated on the full ₦200,000 because basic, housing and transport make up the whole package. NHF is calculated on basic only. Notice how a cooperative deduction reduces take-home pay but is still your money, which matters when you build a budget.

Your five-minute monthly payslip checklist

1. Name, period, RSA PIN and tax ID are correct.
2. Basic and each allowance match your contract or latest promotion letter.
3. Pension is at least 8% of basic + housing + transport.
4. PAYE looks reasonable for your income and reliefs.
5. Every voluntary deduction is one you agreed to.
6. Net pay matches your bank credit.
7. Every quarter, check your RSA statement shows both your contribution and your employer’s.

What to do if something is wrong

Email HR or payroll with a specific, polite note: what you expected, what the payslip shows, and the supporting document (offer letter, rent receipt, promotion letter). Keep it in writing. If pension remittances are missing for several months and your employer does not resolve it, PenCom accepts complaints about non-remittance. For tax questions, your state Internal Revenue Service can confirm what was remitted under your tax ID.

Build your budget from net pay

Your budget should start from the net figure, not gross. Once you know your real take-home pay, our ₦100k and ₦200k budget guide shows how to split it. If you want to log gross pay, each deduction and your spending in one place, the Nigerian Salary Budget Planner spreadsheet has sections for that.

Frequently asked questions

My employer does not give payslips. Is that normal?

It is common in small businesses, but you are entitled to ask for a written record of your pay and deductions. Without one, it is hard to prove income or check pension remittance. Request it politely in writing.

Why does my PAYE change from month to month?

Usually because of variable pay such as overtime, leave allowance or bonuses, or because payroll applied a relief (like rent relief) part way through the year and adjusted the remaining months.

Is the employer’s 10% pension supposed to be on my payslip?

Not necessarily. Many payslips show only the employee’s 8%. The best check is your RSA statement from your PFA, which should show both contributions.

Can I stop NHF deductions?

If you work in the private sector, contribution became voluntary after the Business Facilitation Act 2023. Speak to HR about opting out, and read our NHF guide first, because refunds have specific conditions.

Should I keep old payslips?

Yes. Keep at least the last few years, saved as PDFs in a cloud folder. Lenders, embassies, landlords and tax offices often ask for recent payslips, and they help resolve pension disputes.

This guide is general information based on the sources linked above and is not tax, legal or financial advice. Confirm your specific situation with your employer’s payroll team, your PFA or your state Internal Revenue Service.

“How much does a nurse, accountant or software developer earn in Nigeria?” It is one of the most searched money questions in the country, and one of the worst answered. Many websites publish neat tables of “average salaries” with no source, no date and no explanation of whether the figure is monthly or yearly, entry level or senior, Lagos or Kano. This guide takes a different approach. We share only salary figures that come from official, checkable sources, and then give you a reliable method to find the real pay range for any profession yourself.

Why most “average salary” lists mislead

• No source. If a figure has no named survey, government scale or dataset behind it, treat it as a guess.
• Out of date. With high inflation and naira movements since 2023, a 2021 figure tells you little about 2026.
• Averages hide spread. A few very high earners pull an average up. The median (middle value) is usually more useful.
• Sector differences. An accountant at a multinational, a mid-size firm, a state ministry and a small business can earn very different amounts.
• Gross vs net. Some sources quote gross pay; others quote take-home after PAYE, pension and other deductions.

Figures we can verify

National minimum wage: ₦70,000 a month

The National Minimum Wage (Amendment) Act 2024 raised the minimum wage to ₦70,000 a month. It is the legal floor for covered employers. Under the 2026 tax rules, workers earning the minimum wage or less are not liable to PAYE (PwC).

NYSC allowance: ₦77,000 a month

Corps members receive a federal allowance of ₦77,000 a month. We cover how to budget it in our NYSC allowance guide.

Public sector salary scales

Federal and state employees are paid on published salary structures, such as CONPSS for the civil service, CONMESS for doctors, CONHESS for other health workers and CONUASS for university staff. Each structure lists pay by grade level and step. These are the most transparent salary figures in Nigeria, because they are set by government circulars from the National Salaries, Incomes and Wages Commission. If you are researching pay for a public sector role, find the current circular for that structure rather than relying on a blog table, because adjustments are announced periodically.

Why we do not publish a profession table

We could not find a recent, official, nationwide dataset that reports private sector salaries by profession in Nigeria with a clear methodology. Rather than invent figures, we explain how to build your own estimate. That estimate will be more accurate for your city, experience level and sector than any national average.

A five-source method to find real pay for any role

1. Job adverts that list salary ranges

Some Nigerian job boards and LinkedIn postings include a salary range. Collect at least 10 adverts for the same job title and experience level in your city. Record: title, company type, location, years of experience required, and the range. Note whether the figure is monthly or annual, and gross or net.

2. Salary-sharing platforms

Sites such as Glassdoor allow employees to share pay anonymously by company. Coverage for Nigerian firms is uneven, and entries can be old, so check the dates and the number of reports behind each figure. A figure based on two reports is a hint, not a fact.

3. Recruiters and HR professionals

Recruiters see offers every week. Ask, “What range are you seeing for a mid-level [role] in Lagos right now?” Most will give a range even if they will not name clients.

4. Professional bodies and unions

Bodies such as ICAN, NSE, NMCN-linked associations or the Nigerian Bar Association sometimes publish remuneration guidance, or members discuss pay at events. Union collective agreements also set pay in some sectors.

5. People in the role

Ask three to five people currently doing the job, at different companies, for a range rather than an exact salary: “Would you say entry level here is closer to ₦150k or ₦300k?” People answer ranges more comfortably.

Turning your research into a usable range

1. Standardise. Convert everything to monthly gross naira.
2. Remove outliers. Drop the single highest and lowest figure if they are far from the rest.
3. Find the middle. Sort the figures and take the median.
4. Build a range. Use the 25th and 75th percentile (roughly, the figure a quarter of the way up and three quarters of the way up your sorted list).
5. Adjust for context. Lagos and Abuja typically pay more than smaller cities; multinationals, banks, oil and gas, and tech firms often pay more than small local businesses. Adjust using your own evidence.
6. Date it. Write the month you collected the data. Revisit it every six to twelve months.

Template you can copy

Source	Company type	City	Experience	Monthly gross (₦)	Date
Job ad	Bank	Lagos	2–3 yrs	(fill in)	(fill in)
Recruiter	FMCG	Lagos	2–3 yrs	(fill in)	(fill in)
Peer	Fintech	Lagos	3 yrs	(fill in)	(fill in)

Look beyond the headline salary

Two offers with the same gross pay can be very different in value. Compare:

• Pension: the employer’s minimum is 10% of monthly emoluments under the Pension Reform Act 2014; some employers pay more. See our pension guide.
• HMO cover for you and your family.
• 13th month and bonuses, and whether they are contractual. See our 13th month guide.
• Transport, remote days or staff bus, which can save tens of thousands of naira a month.
• Leave allowance, training budget and promotion path.

Gross to take-home

Once you have a gross range, estimate take-home pay. Subtract 8% pension, any NHF contribution, and PAYE calculated with our PAYE guide. Our payslip guide shows each deduction. The net figure is what matters for your budget.

Using your range in a negotiation

A researched range is your strongest negotiation tool. Aim your ask at or slightly above the median for your experience, and justify it with skills and results. Our salary negotiation guide has scripts. A strong, ATS-friendly CV also helps you get interviews at better-paying employers; the CV Templates Pack includes three ready-made layouts.

Common research mistakes

• Mixing monthly and annual figures.
• Comparing Lagos and smaller-city salaries as if they were the same market.
• Relying on one friend’s salary as “the” rate.
• Ignoring benefits, which can be worth a large share of the package.

Frequently asked questions

What is the minimum wage in Nigeria?

₦70,000 a month, under the National Minimum Wage (Amendment) Act 2024.

Where can I find government salary scales?

Look for the current circulars on structures like CONPSS, CONMESS or CONHESS, issued through the National Salaries, Incomes and Wages Commission and relevant ministries. Use the latest circular, since adjustments are made periodically.

Are Glassdoor salaries accurate for Nigeria?

They can be a useful hint, but check how many reports a figure is based on and how recent they are.

Should I compare salaries in dollars?

For local jobs paid in naira, compare in naira and against your cost of living. For remote roles paid in foreign currency, see our remote jobs guide.

How often should I research my market rate?

At least once a year, and before any appraisal, promotion discussion or job change.

This guide is general information. We only quote figures we could verify from the sources named above. Salary levels change quickly, so always check the date of any figure you rely on.

If you work for an organisation in Nigeria, you probably see a “pension” deduction on your payslip every month. Many employees never check where that money goes, how much is there, or when they can use it. Your Retirement Savings Account (RSA) could become one of the largest sums of money you ever own, so it is worth understanding. This guide explains Nigeria’s Contributory Pension Scheme in plain language.

What is the Contributory Pension Scheme?

The Contributory Pension Scheme (CPS) is governed by the Pension Reform Act 2014, which repealed the 2004 Act, and regulated by the National Pension Commission (PenCom). Under it, money is set aside each month by you and your employer into an account in your name, invested by a licensed Pension Fund Administrator (PFA), and paid to you at retirement (PenCom FAQ).

Key players

• You, the RSA holder: the account is yours and moves with you from job to job.
• Your employer: deducts your contribution, adds its own, and remits both to your PFA.
• Pension Fund Administrator (PFA): invests the money and manages your account.
• Pension Fund Custodian (PFC): holds the assets separately from the PFA for safety.
• PenCom: the regulator, which also approves withdrawals.

How much is contributed?

The minimum total contribution is 18% of your monthly emoluments: 8% from you and 10% from your employer (PenCom FAQ 2020). For contribution purposes, emoluments are generally your basic salary plus housing and transport allowances, not every allowance.

An employer may choose to bear the whole contribution itself, as long as the total is not less than the legal minimum. Employers with a minimum number of staff are required to participate; check PenCom guidance for the threshold that applies.

Example

Item	Monthly (₦)
Basic + housing + transport	200,000
Your contribution (8%)	16,000
Employer contribution (10%)	20,000
Total into your RSA	36,000

That is ₦432,000 a year before investment returns, from a ₦200,000 monthly BHT package.

Voluntary contributions

You can add more than the mandatory 8%. PenCom’s FAQ says employees may make additional voluntary contributions as long as their total contributions and other deductions do not exceed one-third of total monthly emoluments. Voluntary contributions can be useful for building long-term savings, and pension contributions are an eligible deduction for tax under the Nigeria Tax Act 2025. Rules on withdrawing voluntary contributions and on tax for early withdrawal apply, so ask your PFA before relying on them.

Pension and your tax

Your pension contribution is deducted before PAYE is calculated, which reduces your chargeable income. See our 2026 PAYE guide for worked examples.

When can you access your RSA?

At retirement

According to PenCom, you can access your RSA on retirement under your conditions of service or on reaching age 50, or if you are medically certified as incapacitated. At retirement, you can take a lump sum and then receive the rest through:

• Programmed withdrawal: regular monthly or quarterly payments from your PFA while the balance stays invested.
• Life annuity: you use the balance to buy an annuity from a licensed insurance company that pays you for life.

The lump sum is allowed provided what remains is enough to fund a programmed withdrawal or annuity of at least 50% of your remuneration at retirement.

If you lose your job before 50

If you are under 50, leave or lose your job, and cannot get another within four months, you may apply to withdraw up to 25% of your RSA balance (Section 7(2), PRA 2014). Stanbic IBTC Pension Managers notes this application can only be made once and that data recapture must be completed first.

For a home: equity contribution for a mortgage

PenCom’s guidelines on equity contribution for residential mortgage allow eligible RSA holders to use up to 25% of their RSA balance as the equity (down payment) for a residential mortgage. Key conditions include:

• At least 60 months of mandatory employer and employee contributions.
• At least three years left before retirement.
• A verified offer letter for the property and a mortgage from an eligible lender.
• If 25% is not enough for the required equity, you pay the difference to the lender.

How to check your RSA

1. Find your RSA PIN (it starts with “PEN”) on your payslip, welcome letter or by contacting your PFA.
2. Register on your PFA’s website or app.
3. Check your statement: are contributions arriving every month? Do they match 18% of your BHT?
4. Update your details, including next of kin, phone and email.
5. Complete data recapture if your PFA asks; it is required for many benefit applications.

What if your employer is not remitting?

Unremitted pension is a known problem in some organisations. If deductions appear on your payslip but not in your RSA statement:

• Raise it politely with HR or payroll, with dates and amounts.
• Contact your PFA for confirmation.
• If unresolved, you can report to PenCom through its official channels.

Keep all your payslips; they are your evidence.

Changing jobs and changing PFA

Your RSA stays with you when you change employers. Give your new employer your RSA PIN and PFA name so contributions continue into the same account; do not open a second RSA. PenCom also allows RSA holders to transfer between PFAs under its transfer window rules, usually limited in frequency, so compare PFA performance and service before switching.

Self-employed and informal workers

If you are self-employed or work in the informal sector, PenCom’s Micro Pension Plan allows you to open an RSA and contribute flexibly. It is worth considering if you have no employer pension.

Planning beyond your pension

Your RSA is valuable, but it may not be enough on its own for a comfortable retirement, especially if your salary is low or you start late. Combine it with a personal savings plan and long-term investments. A yearly plan helps you review your RSA balance and set savings goals; our guide to planning your year walks through the process, and the 2027 Printable Planner includes pages for annual money goals.

Frequently asked questions

Can I withdraw my pension to start a business?

Generally no. Outside retirement, the main exceptions are the one-time 25% withdrawal after four months without a job (for those under 50), the mortgage equity provision, and specific cases such as medical incapacity. Voluntary contributions follow their own rules.

What happens to my RSA if I die?

The balance is paid to your named beneficiaries or according to the law. Keep your next-of-kin details current with your PFA.

Is my pension money safe if my PFA fails?

The scheme separates administration (PFA) from custody (PFC), so assets are held by a custodian, not the PFA itself, and PenCom supervises both.

Can I have more than one RSA?

No. You should have only one RSA. Use the same PIN with every employer.

How do I find my PFA if I’ve forgotten?

Check old payslips, contact your former employer’s HR, or contact PenCom, which can help confirm your PFA using your details.

Summary

• Minimum contribution: 18% of monthly emoluments (8% you, 10% employer).
• Access at retirement or age 50, or 25% after four months without a job (once).
• Up to 25% can be used as mortgage equity if you meet PenCom’s conditions.
• Know your RSA PIN, check your statement, and report missing remittances.

General information based on PenCom publications linked above. Rules and guidelines can change; confirm with your PFA or PenCom.

Many Nigerian job seekers accept the first salary offered, worried that asking for more will make the employer withdraw the offer. In reality, polite and well-prepared negotiation is normal in many organisations, and even a small increase compounds over your career because future raises are often a percentage of your current pay. This guide shows you how to research, prepare and negotiate salary confidently, whether you are a fresh graduate or an experienced professional.

When can you negotiate?

• After an offer, before accepting. This is when you have the most leverage, because the employer has already chosen you.
• During performance reviews or after taking on bigger responsibilities.
• When you have a competing offer, used honestly.

Some roles have fixed pay scales, for example many government jobs, graduate trainee programmes in banks, and unionised positions. In those cases, base pay may not move, but you can sometimes discuss grade level, start date or benefits. Ask: “Is there any flexibility in this offer?” The answer tells you a lot.

Step 1: Research the market rate

Salary information in Nigeria is less public than in some countries, so combine several sources:

• Job adverts that state salary ranges for similar roles in your city.
• Professional associations and their salary surveys, where available.
• Salary sites and recruiter reports (treat self-reported figures as rough guides).
• Conversations with people in similar roles, recruiters and mentors.

Note differences by city (Lagos and Abuja usually pay more), by industry (oil and gas, banking, telecoms and tech often pay more than others), and by company size. Write down a realistic range, not one number.

Step 2: Understand the whole package

In Nigeria, pay is often split into basic salary plus allowances: housing, transport, lunch, utility, leave allowance and sometimes a 13th month. Before comparing offers, convert everything into annual gross and then estimate monthly take-home after pension and PAYE. Our 2026 PAYE guide shows how.

Also value non-cash benefits:

• Health insurance (HMO) for you and dependants
• Pension: the employer must contribute at least 10% of basic, housing and transport pay under the Pension Reform Act 2014; some employers pay more
• Staff bus, fuel or official car
• Remote or hybrid days (which save transport money)
• Training budget, exam sponsorship (ICAN, ACCA, CFA)
• Staff loans at low rates

An offer with a lower salary but a staff bus, HMO for your family and paid professional exams may be worth more than a slightly higher salary with nothing else.

Step 3: Know your numbers

• Target: the figure you would be happy with, based on research.
• Anchor: slightly above your target, leaving room to meet in the middle.
• Walk-away point: the minimum that covers your budget and is worth the move. Calculate it from your real expenses, including transport to the new office.

Step 4: Handle “What are your salary expectations?”

This question often comes early, sometimes on the application form. Options:

• Deflect politely early on: “I’d like to understand the role better first. Could you share the budgeted range?”
• Give a researched range if pressed: “Based on my research for similar roles in Lagos and my experience in X, I’m looking at ₦A to ₦B monthly gross, depending on the full package.”

Always say whether your figure is gross or net, monthly or annual. Misunderstandings here are very common in Nigeria.

Step 5: Negotiate the offer

When the offer arrives:

1. Thank them and show enthusiasm. “Thank you, I’m excited about this role and the team.”
2. Ask for time to review the full offer in writing, usually a day or two.
3. Make your case with value, not need. Focus on what you bring, not your rent. “Given my two years managing reconciliations for a ₦-billion portfolio and my ICAN qualification, I was hoping for something closer to ₦X.”
4. Be specific. Name a number or a clear ask.
5. Stay quiet after asking. Let them respond.
6. If base pay is fixed, ask about other items: a sign-on bonus, earlier review (six months instead of twelve), higher grade, extra leave days, or exam sponsorship.

Sample email

“Dear [Name], thank you for the offer for the Finance Analyst role. I’m keen to join [Company]. Having reviewed the package, I’d like to ask whether there is flexibility on the base salary. Based on the scope of the role and my experience with [specific skill], I was hoping for a monthly gross of ₦[amount]. I’m also open to discussing other parts of the package. I look forward to your thoughts. Kind regards, [Name].”

Negotiating as a fresh graduate

Graduate trainee salaries are often fixed, but you can still:

• Ask about the review timeline and criteria for confirmation.
• Ask whether professional exams are sponsored.
• Negotiate a start date that lets you finish NYSC properly.
• For smaller companies and startups, politely negotiate pay using skills you can prove: a portfolio, certifications or internship results.

Asking for a raise in your current job

• Keep a “wins file” of achievements, savings you created, revenue you supported and extra duties.
• Time it around appraisal season or after a major success.
• Request a meeting rather than raising it in passing.
• Present evidence and market data, then make a clear ask.
• If the answer is “not now,” ask: “What would I need to achieve for this to be possible at the next review?” and get it in writing.

Mistakes to avoid

• Lying about current pay or fake competing offers.
• Ultimatums you are not ready to follow through on.
• Negotiating over WhatsApp voice notes; use email or a call followed by email.
• Accepting verbally and then trying to renegotiate.
• Forgetting to get the final agreed terms in the offer letter.

Frequently asked questions

Can negotiating make an employer withdraw an offer?

It is uncommon when you are polite, reasonable and grounded in research. Very aggressive demands or repeated renegotiation increase the risk. Keep the tone positive and show you want the job.

Should I disclose my current salary?

You are not obliged to, and it can anchor the offer low. Redirect to your expectations for the new role. If the employer insists, be truthful and explain how the new role differs in scope.

Is it better to negotiate by email or by phone?

A phone or video conversation feels more personal and lets you read reactions, but always confirm what was agreed by email afterwards.

How much more should I ask for?

Base your ask on market research and the value you bring. Many candidates ask for a modest increase above the offer, but there is no universal percentage; a well-justified number matters more than a formula.

What if they say no to everything?

Decide using your walk-away point. If the offer meets your needs and offers growth, accepting is reasonable. Ask when your pay will next be reviewed.

After you agree

Read the written offer carefully: salary, allowances, probation length, notice period, leave and benefits. Once your new salary starts, update your budget immediately so the increase goes to your goals, not just new spending. The Salary Budget Planner can help you plan the new take-home pay, and if you are still job hunting, our CV guide and interview tips can help you land more offers to choose from.

General career information, not legal or HR advice for your specific situation.

From 1 January 2026, PAYE (Pay As You Earn) in Nigeria is calculated under the Nigeria Tax Act 2025, which replaced the old Personal Income Tax Act rules for individuals. If you are a salary earner, the change affects how much tax comes off your payslip every month. This guide explains the new tax bands, what you can deduct, and how to calculate your own PAYE step by step, with worked examples.

What changed in 2026?

According to PwC’s Nigeria tax summary and a DLA Piper Africa payroll FAQ, the main changes for employees are:

• New tax bands running from 0% to 25%, replacing the old 7%–24% bands.
• The first ₦800,000 of yearly chargeable income is taxed at 0%.
• The Consolidated Relief Allowance (CRA) is gone. It used to be ₦200,000 or 1% of gross income (whichever is higher) plus 20% of gross income.
• Rent relief replaces it: 20% of the annual rent you pay, up to a maximum of ₦500,000, if you declare and support it with evidence.
• Minimum wage earners (₦70,000 a month or less) are not liable to PAYE.

The new PAYE tax bands

Annual chargeable income	Rate
First ₦800,000	0%
Next ₦2,200,000 (up to ₦3m)	15%
Next ₦9,000,000 (up to ₦12m)	18%
Next ₦13,000,000 (up to ₦25m)	21%
Next ₦25,000,000 (up to ₦50m)	23%
Above ₦50,000,000	25%

Source: PwC Tax Summaries – Nigeria.

These are marginal rates. Each rate applies only to the slice of income inside that band. A raise that pushes you into a higher band only taxes the extra naira at the higher rate, so a raise never reduces your take-home pay.

What you can deduct before tax

Section 30 of the Nigeria Tax Act lists “eligible deductions” that reduce your chargeable income. They include:

• Your contributions under the Pension Reform Act (normally 8% of basic, housing and transport pay).
• Contributions to the National Housing Fund (NHF).
• Contributions to the National Health Insurance Scheme.
• Interest on a loan for building your own owner-occupied home.
• Life insurance or deferred annuity premiums for you or your spouse.
• Rent relief: 20% of annual rent paid, capped at ₦500,000.

Deductions must be claimed in writing with supporting documents. For rent relief, the DLA Piper FAQ notes that employers may ask for a receipt or tenancy agreement, the landlord’s details and the property address. If you pay rent, give your HR or payroll team this evidence early, otherwise your PAYE may be calculated without the relief.

How to calculate your PAYE: step by step

1. Find your annual gross pay. Monthly gross × 12, plus any taxable bonuses or allowances.
2. Subtract eligible deductions: pension, NHF, NHIS, life insurance and rent relief.
3. The result is your chargeable income.
4. Apply the bands slice by slice.
5. Divide the annual tax by 12 for your monthly PAYE.

In the examples below we make simplifying assumptions: pension is 8% of the full gross salary (as if all pay is basic, housing and transport), there is no NHF or insurance, and the employee pays the stated rent. Your payroll may differ.

Example 1: ₦100,000 per month, rent ₦360,000 a year

Annual gross	₦1,200,000
Less pension (8%)	−₦96,000
Less rent relief (20% × ₦360,000)	−₦72,000
Chargeable income	₦1,032,000
First ₦800,000 at 0%	₦0
Remaining ₦232,000 at 15%	₦34,800
Annual PAYE	₦34,800 (₦2,900/month)

Without the rent relief claim, chargeable income would be ₦1,104,000 and PAYE would be ₦45,600 a year (₦3,800 a month).

Example 2: ₦200,000 per month, rent ₦600,000 a year

Annual gross	₦2,400,000
Less pension (8%)	−₦192,000
Less rent relief (20% × ₦600,000)	−₦120,000
Chargeable income	₦2,088,000
First ₦800,000 at 0%	₦0
Remaining ₦1,288,000 at 15%	₦193,200
Annual PAYE	₦193,200 (₦16,100/month)

Example 3: ₦500,000 per month, rent ₦1,500,000 a year

Annual gross	₦6,000,000
Less pension (8%)	−₦480,000
Less rent relief (20% × ₦1.5m = ₦300,000)	−₦300,000
Chargeable income	₦5,220,000
First ₦800,000 at 0%	₦0
Next ₦2,200,000 at 15%	₦330,000
Remaining ₦2,220,000 at 18%	₦399,600
Annual PAYE	₦729,600 (₦60,800/month)

Notice the rent relief cap: someone paying ₦3,000,000 rent would still only get ₦500,000 relief, because 20% of ₦3m (₦600,000) is above the cap.

Who collects your PAYE?

Your employer deducts PAYE from your salary and remits it to the tax authority of the state where you are resident. If you work for a company, you usually do not need to file monthly yourself, but you should keep payslips and check that the deductions look right. If you also earn income from a side business, that income may need to be declared separately.

How to check your payslip

• Confirm the gross figure matches your contract.
• Check that pension is about 8% of basic, housing and transport pay, and that it appears in your RSA statement from your PFA.
• Ask HR whether rent relief has been applied, and what evidence they need.
• Re-run the calculation above with your numbers. If the PAYE is very different, ask payroll for a breakdown.

Common questions

Does the new law mean I pay less tax?

For many low and middle earners, yes, mainly because of the ₦800,000 tax-free band. DLA Piper notes that staff earning roughly ₦100,000 to ₦500,000 a month will generally see deductions fall compared with the old system, though outcomes vary with individual reliefs. High earners may pay more because the CRA was removed and the top rate rose to 25%.

I live in a family house and pay no rent. Can I claim rent relief?

No. The relief is based on rent you actually pay, and you must declare it accurately.

Are bonuses and 13th-month pay taxed?

Generally they form part of your taxable employment income and are added to your annual gross. Ask your payroll team how they spread the tax.

Frequently asked questions

Is the ₦800,000 tax-free amount applied monthly?

It is an annual band. Payroll systems typically spread it across the year, which is roughly ₦66,667 of chargeable income per month taxed at 0%.

Does NHF reduce my tax?

Yes. National Housing Fund contributions are listed as an eligible deduction under section 30 of the Nigeria Tax Act 2025, so they reduce chargeable income if you contribute.

What if I have two jobs?

Your total employment income is what matters for the bands. Each employer may deduct PAYE as if it were your only job, so you could be under- or over-taxed. Speak to your state tax authority or a tax professional.

I’m self-employed. Do these bands apply to me?

The same personal income tax bands apply to individuals, but self-employed people generally pay through self-assessment rather than PAYE, and different expenses may be deductible.

Where can I read the law itself?

The National Assembly hosts the Nigeria Tax Act 2025 document, linked at the top of this article. Professional firms like PwC also publish plain-language summaries.

Plan your budget around net pay

Once you know your monthly PAYE and pension, you know your true take-home pay, and that is the figure your budget should use. Our ₦100k/₦200k budgeting guide shows how to plan from there. If you want a spreadsheet that separates gross pay, deductions and spending categories, the Nigerian Salary Budget Planner is one option.

This guide is general information based on the sources linked above and is not tax advice. Tax rules and their interpretation by state tax authorities can change. Confirm your position with your employer’s payroll, your state Internal Revenue Service or a qualified tax professional.