Reading Your Nigerian Payslip
Your payslip shows how your gross salary becomes your take-home pay. Here's what each deduction means:
Gross Salary Breakdown
Most Nigerian salaries are structured as:
- Basic Salary: 50-60% of gross (used for pension, NHF calculations)
- Housing Allowance: 15-25%
- Transport Allowance: 10-15%
- Other Allowances: Utilities, meals, leave allowance, etc.
Statutory Deductions
1. PAYE (Pay As You Earn)
This is your income tax, calculated on your taxable income after reliefs.
2026 Tax Brackets:
| Income Bracket | Tax Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,000,000 | 15% |
| Next ₦2,400,000 | 18% |
| Next ₦5,000,000 | 21% |
| Next ₦30,000,000 | 23% |
| Above ₦40,200,000 | 25% |
2. Pension (8%)
- Employee contribution: 8% of basic + housing + transport
- Employer also contributes: 10% (you don't see this deducted)
- Goes to your Retirement Savings Account (RSA)
- Tax-deductible and grows tax-free
3. NHF (2.5%)
- National Housing Fund contribution
- 2.5% of your basic salary
- Helps you qualify for mortgage loans
- Tax-deductible
4. NHIS (Optional)
- National Health Insurance Scheme
- Percentage varies by organization
- Provides healthcare coverage
- Tax-deductible
Example Payslip Breakdown
For a ₦500,000/month gross salary:
| Item | Amount |
|---|---|
| Gross Salary | ₦500,000 |
| Basic (60%) | ₦300,000 |
| Housing (20%) | ₦100,000 |
| Transport (10%) | ₦50,000 |
| Other (10%) | ₦50,000 |
| Deductions | |
| Pension (8% of ₦450k) | -₦36,000 |
| NHF (2.5% of ₦300k) | -₦7,500 |
| PAYE | -₦67,000 |
| Net Salary | ₦389,500 |
Use our PIT Calculator to verify your PAYE deductions are correct.
Red Flags to Watch For
- PAYE higher than expected (check if reliefs applied)
- Pension not being remitted (verify with your PFA)
- No tax receipt at year end
- Deductions not matching your contract