Payroll Calculator Nigeria — PAYE, Pension & NHF Deductions
Calculate Nigerian employee net pay after PAYE tax, pension (8%), NHF (2.5%), and NHIS deductions. Shows full employer cost including 10% pension contribution.
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Employee Net Pay
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Total Employee Deductions
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Total Employer Cost
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Total Payroll (all staff)
Per-Employee Deductions Breakdown
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Salary Structure
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Nigerian Payroll Compliance
Employers must file monthly PAYE returns with the State Internal Revenue Service (SIRS) of the state where the employee resides, not works. Pension remittances must reach the PFA within 7 working days of salary payment. Late remittance attracts penalties of 2% per month on the amount due.
Keep proper payroll records for at least 6 years for potential audit purposes. FIRS conducts regular payroll audits of registered companies.
Frequently Asked Questions
What are mandatory payroll deductions in Nigeria?
Nigerian employers must deduct: PAYE income tax (based on CRA and progressive bands), Pension (8% employee contribution + 10% employer contribution of monthly gross emolument), National Housing Fund — NHF (2.5% of basic salary for employees earning ₦3,000+), and NHIS (National Health Insurance, where applicable). The employer bears pension, ITF, and NSITF contributions additionally.
How is PAYE calculated in Nigeria?
PAYE uses a Consolidated Relief Allowance (CRA) of ₦200,000 + 20% of gross income, then applies progressive rates: 7% on first ₦300k, 11% on next ₦300k, 15% on next ₦500k, 19% on next ₦500k, 21% on next ₦1.6M, 24% on balance above ₦3.2M annual.
What is the pension contribution rate in Nigeria?
Under the Pension Reform Act 2014, minimum contributions are: Employee 8% of monthly gross emolument (basic salary + housing + transport allowances), Employer 10% minimum. Employers may contribute more. Gross emolument in practice often means basic + transport + housing components.
What is NHF (National Housing Fund)?
NHF is a 2.5% contribution on basic salary paid by employees earning ₦3,000 or more monthly, to the Federal Mortgage Bank of Nigeria (FMBN). It qualifies the employee for NHF loans. Contributors can access their funds after 21 years or upon retirement at age 60.
What is the total employment cost to Nigerian employers?
Beyond gross salary: employer pension (10% of pensionable emolument), ITF — Industrial Training Fund (1% of payroll for companies with 5+ employees), NSITF — Nigeria Social Insurance Trust Fund (1% of total monthly payroll), and NHIS (employer may bear part). Total employer cost typically adds 12–15% above gross salary.