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Nigeria Net Salary Calculator

Calculate your take-home pay in Nigeria after PAYE tax, pension (8%), and NHF (2.5%) deductions. For employees and employers.

Your details

Your total monthly earnings before any deductions.

The sum of your basic salary, housing allowance, and transport allowance. This is the basis for pension and NHF calculations.

Select 'Yes' if you contribute to a Retirement Savings Account (RSA) under the Pension Reform Act. The employee contribution is 8% of your basic, housing, and transport allowances.

Select 'Yes' if you are required to contribute to the National Housing Fund (NHF). The contribution is 2.5% of your basic, housing, and transport allowance. Mandatory for employees earning NGN 3,000 or more per year.

The percentage of gross income used in the first part of the CRA calculation (the '1% of gross' component). The standard rate is 1%. Enter 1.

Result

Net Monthly Salary (Take-Home Pay) NGN 578,122.00

Gross Monthly Salary minus all deductions.

How it is calculated

Annual PAYE Tax The higher of the calculated PAYE tax or the minimum tax (1% of gross income).
NGN 1,495,536.00
Monthly PAYE Tax Annual PAYE Tax divided by 12 months.
NGN 124,628.00
Monthly Pension Contribution Annual Pension Contribution divided by 12 months.
NGN 36,000.00
Monthly NHF Contribution Annual NHF Contribution divided by 12 months.
NGN 11,250.00
Total Monthly Deductions Sum of PAYE tax, pension, and NHF deductions.
NGN 171,878.00
Keep in mind
  • This calculator provides an estimate. Actual deductions may vary based on specific employer policies, additional allowances, or other statutory deductions.
  • The PAYE tax calculation includes the progressive tax bands for 2026 and applies the minimum tax rule (1% of gross income) if it results in a higher tax liability.
  • Pension and NHF contributions are calculated on the Basic + Housing + Transport Allowance. If this amount is uncertain, a common estimate is 60% of gross salary, but you should verify with your employer for accuracy.
  • The CRA calculation uses the higher of (CRA Gross Percentage of gross income + 20% of taxable income before CRA) or NGN 200,000. The standard CRA Gross Percentage is 1%.
  • The NHF contribution is mandatory for employees earning NGN 3,000 or more per year.
  • The minimum statutory employee pension contribution rate is 8%. Employers may contribute more, but this calculator uses the employee's minimum obligation.

Indicative result, calculated from the details and the rules listed below. It does not replace an official calculation or advice from a professional.

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Nigeria Net Salary Calculator

Understanding your take-home pay in Nigeria involves navigating several statutory deductions: Pay-As-You-Earn (PAYE) tax, pension contributions, and the National Housing Fund (NHF). This calculator helps employees and employers accurately determine the net monthly salary after all mandatory deductions, providing clarity on earnings and compliance.

How Your Net Salary is Calculated

Your net salary is your gross monthly salary minus three primary deductions:

  • PAYE Tax: A progressive income tax calculated on your annual taxable income after applying the Consolidated Relief Allowance (CRA). A minimum tax of 1% of your gross income applies if it is higher than the calculated PAYE.
  • Pension Contribution: Under the Pension Reform Act, employees contribute a minimum of 8% of their basic, housing, and transport allowances to a Retirement Savings Account (RSA).
  • NHF Contribution: A mandatory 2.5% of your basic, housing, and transport allowances goes to the National Housing Fund, aimed at facilitating home ownership for employees earning NGN 3,000 or more per year.

Step-by-Step Calculation Example

Let's calculate the net salary for Chinedu, who earns a gross monthly salary of NGN 750,000. His basic, housing, and transport allowances total NGN 450,000. He contributes to both pension and NHF.

  1. Annual Gross Salary: NGN 750,000 × 12 = NGN 9,000,000.
  2. Annual Pension Contribution: 8% of (NGN 450,000 × 12) = 8% of NGN 5,400,000 = NGN 432,000.
  3. Annual NHF Contribution: 2.5% of (NGN 450,000 × 12) = 2.5% of NGN 5,400,000 = NGN 135,000.
  4. Annual Taxable Income Before CRA: NGN 9,000,000 - NGN 432,000 - NGN 135,000 = NGN 8,433,000.
  5. Annual CRA: Higher of (1% of NGN 9,000,000 + 20% of NGN 8,433,000) = NGN 90,000 + NGN 1,686,600 = NGN 1,776,600, or the minimum of NGN 200,000. Result: NGN 1,776,600.
  6. Annual Taxable Income: NGN 8,433,000 - NGN 1,776,600 = NGN 6,656,400.
  7. Annual PAYE Tax (Before Minimum Check): Using the 2026 tax bands:
    • First NGN 300,000 at 7%: NGN 21,000
    • Next NGN 300,000 at 11%: NGN 33,000
    • Next NGN 500,000 at 15%: NGN 75,000
    • Next NGN 500,000 at 19%: NGN 95,000
    • Next NGN 1,600,000 at 21%: NGN 336,000
    • Remaining NGN 3,456,400 at 24%: NGN 829,536
    • Subtotal: NGN 1,389,536
  8. Minimum Tax Check: 1% of NGN 9,000,000 = NGN 90,000.
  9. Final Annual PAYE Tax: The higher of NGN 1,389,536 or NGN 90,000 is NGN 1,389,536.
  10. Monthly PAYE Tax: NGN 1,389,536 / 12 = NGN 115,794.67.
  11. Monthly Pension: NGN 432,000 / 12 = NGN 36,000.
  12. Monthly NHF: NGN 135,000 / 12 = NGN 11,250.
  13. Total Monthly Deductions: NGN 115,794.67 + NGN 36,000 + NGN 11,250 = NGN 163,044.67.
  14. Net Monthly Salary: NGN 750,000 - NGN 163,044.67 = NGN 586,955.33.

Chinedu's take-home pay is approximately NGN 586,955 per month.

Common Scenarios

Entry-Level Employees: Those earning below the tax threshold may have zero PAYE tax but still contribute to pension and possibly NHF, significantly impacting their net pay. The minimum tax rule (1% of gross) may apply if their calculated PAYE is lower.

High Earners: Individuals in the top tax bracket (24%) see a larger portion of their income deducted as tax, making accurate allowance reporting crucial.

Non-Contributors: Employees not yet enrolled in pension or NHF will have a higher net salary, but they miss out on long-term benefits and may face legal obligations to enroll.

Preparing an Employment Document

After calculating your net salary, you may need to formalize your employment terms. An Employment Offer Letter (Item 4537) is ideal for outlining the proposed gross salary, allowances, and benefits. For a comprehensive contract, an Employment Agreement (Item 4539) details all terms and conditions. If you require proof of income for a loan or visa, an Employment Verification Letter (Item 4531) can confirm your salary and employment status.

Using this calculator ensures you enter negotiations or financial planning with a clear understanding of your actual earnings, helping you make informed decisions about job offers, budgets, and future investments.

Frequently asked questions

What is the difference between gross salary and net salary?

Gross salary is your total earnings before any deductions. Net salary, or take-home pay, is the amount you receive after deducting PAYE tax, pension contributions, NHF, and any other statutory or voluntary deductions.

Is the National Housing Fund (NHF) contribution mandatory for all employees?

The NHF contribution is mandatory for employees in Nigeria earning NGN 3,000 or more per year, as per the NHF Act. The contribution is 2.5% of your basic, housing, and transport allowances.

How is the Consolidated Relief Allowance (CRA) calculated?

The CRA is the higher of (CRA Gross Percentage of your gross income + 20% of your taxable income before CRA) or a statutory minimum (NGN 200,000 for 2026). Taxable income before CRA is your gross income minus your annual pension and NHF contributions.

Can I opt out of the pension contribution?

No. Under the Pension Reform Act 2014, it is mandatory for all employees in Nigeria to contribute a minimum of 8% of their basic, housing, and transport allowances to a Retirement Savings Account (RSA). Employers are required to contribute an additional minimum of 10%.

What is the minimum PAYE tax?

According to the Personal Income Tax Act, the tax payable by an individual shall not be less than 1% of their total gross income. This calculator ensures the final PAYE tax is at least this amount.

What if my basic, housing, and transport allowance is not specified?

If your allowances are not clearly defined, a common estimate is 60% of your gross salary. However, for accuracy, you should consult your employment contract or payroll department.

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