Salary Calculator Nigeria — Gross to Net (PIT + Pension + NHF)

How Nigeria's Salary Calculator Works

This calculator estimates your net pay under PAYE (Pay As You Earn) by applying the three deductions that move money from your monthly gross: the 8% employee pension contribution, the 2.5% National Housing Fund, and federal PAYE tax at rates that depend on your income band. Figures should be confirmed with your state internal revenue service or your payroll department.

The 8% Pension Contribution: Deferred Saving, Not a Tax

Under the Pension Reform Act, you contribute 8% of your emoluments to a Retirement Savings Account held in your name. This is not a tax paid to government — it is your own money, compounded and held by a Pension Fund Administrator until retirement. Because it is deducted from gross salary before tax is computed, the pension contribution lowers your taxable base as well. For most Nigerian employees, this 8% is the single largest deduction from gross pay.

The 2.5% National Housing Fund

Employees earning above a prescribed minimum contribute 2.5% of basic salary (not gross) to the National Housing Fund. This contribution is separate from pension and PAYE, and it unlocks access to NHF mortgage schemes offered by participating banks. Unlike the pension calculation, NHF is computed on basic salary only, which is why it appears smaller than the pension deduction on your payslip.

PAYE Is Administered by Your State, Not by Abuja

Federal PAYE rates are uniform across Nigeria — 7% on the first ₦300,000 of taxable income, 11% to ₦600,000, 15% to ₦1.1 million, and rising to 24% above ₦3.2 million — but your state internal revenue service assesses, collects and remits PAYE. This means two people on identical salaries in different states face the same tax rates but may experience different administration and timing. The state where you reside is the state that files and enforces your PAYE liability.

Why This Calculator Shows a Conservative Figure

The calculator applies a flat ₦200,000 relief instead of the full Consolidated Relief Allowance (CRA), which is the higher of ₦200,000 or 1% of gross plus 20% of gross. By omitting the 20% component, the tax shown is typically higher than your actual liability for most salaries — a ceiling, not a precise answer. For the full CRA explanation and a breakdown of how it interacts with PAYE mechanics, see the income-tax calculator page. If you work in a state that applies different assessment rules or allowances, your actual tax may differ.