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Nigerian Payroll Calculator — PAYE 2024

Calculate employee net pay after PAYE income tax, pension contributions (8%), NHF (2.5%), and NSITF (1%) — updated for the 2026 Tax Reform Act. Accurate to the naira.

MarginalPAYE calculation
4 deductionsPAYE, pension, NHF, NSITF
2024 ActLatest tax bands
PAYE Calculator
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Understanding PAYE

How PAYE works for Nigerian employers

PAYE (Pay As You Earn) is deducted from employee salaries by employers before payment and remitted to the relevant State Internal Revenue Service (SIRS) — not to FIRS.

The 2026 Tax Reform Act brought significant changes: the first ₦800,000 of annual income is now completely exempt from PAYE, giving low-income earners full relief.

As an employer, you are personally liable if you fail to deduct and remit PAYE on time. Penalties include 10% of the unremitted amount plus interest at the prevailing CBN rate.

Example: ₦450,000/month salary

Annual = ₦5,400,000

Gross salary₦450,000
Pension (8%)− ₦36,000
PAYE (marginal)− ₦35,383
NHF (2.5%)− ₦11,250
NSITF (1%)− ₦4,500
Net pay₦362,867
FAQs

Payroll questions Nigerian employers ask

What changed in PAYE with the 2026 Tax Reform Act?
The most significant change is the introduction of a 0% band for the first ₦800,000 of annual income. This means workers earning up to ₦66,667/month pay no PAYE — a significant relief for low-income earners. Higher bands also shifted slightly.
When do I remit PAYE and pension?
PAYE must be remitted to the State Internal Revenue Service by the 10th of the following month. Pension contributions (both employee and employer portions) must be remitted to the employee's chosen PFA within 7 working days of payday.
Is NHF compulsory for all employees?
NHF (National Housing Fund) at 2.5% is mandatory for employees earning ₦3,000/month or more. In practice this means virtually all employees. Employers deduct it and remit to the Federal Mortgage Bank of Nigeria (FMBN).
Does PAYE apply to contract staff?
It depends on the nature of the contract. If the contractor is integrated into your business (you control hours, tools, and output), PAYE likely applies. Independent contractors who invoice you separately are typically handled under WHT deduction instead. Always consult your accountant.
What is the minimum pension contribution in Nigeria?
Under the Pension Reform Act 2014, the minimum is 8% from the employee and 10% from the employer — a combined minimum of 18% of the employee's monthly emolument. Both parties can contribute more than the minimum.

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