Salary Slip Generator — Nigeria
Salary Slip Generator for Nigeria — With PAYE and Pension Breakdown
Nigerian salary slips must reflect the country PAYE tax system and mandatory pension contributions. The Personal Income Tax Act governs PAYE deductions with graduated tax rates from 7% to 24%. Pension...
Local Requirements
Salary Slip Generator Requirements in Nigeria
Must show PAYE tax per Personal Income Tax Act. Pension contributions (10% employer + 8% employee minimum). NHF (2.5% of basic for employees earning ₦3,000+/month). NHIS contribution if applicable. All amounts in Naira (₦).
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Nigerian salary slips must reflect the country PAYE tax system and mandatory pension contributions. The Personal Income Tax Act governs PAYE deductions with graduated tax rates from 7% to 24%. Pension contributions under the Pension Reform Act 2014 are mandatory for organizations with 3+ employees.
A Nigerian payslip typically shows gross pay broken into basic, housing and transport allowances, then the statutory deductions: PAYE remitted to the State Internal Revenue Service, the employee's 8 percent pension contribution to their Retirement Savings Account, the National Housing Fund levy of 2.5 percent of basic, and any NHIS health contribution. The employer's 10 percent pension share is shown as a cost rather than a deduction from pay.
Before PAYE is applied, the employer allows the Consolidated Relief Allowance and deducts pension and NHF to arrive at taxable income, so two employees on the same gross can pay different tax. A clear slip lists gross pay, each deduction and the net, and employers must remit PAYE by the tenth day of the following month and file annual returns, giving the employee proof of the tax deducted.
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Salary Slip Generator in Nigeria
FAQ
Frequently Asked Questions
Nigerian PAYE is calculated using graduated tax rates on annual taxable income: first ₦300,000 at 7%, next ₦300,000 at 11%, next ₦500,000 at 15%, next ₦500,000 at 19%, next ₦1,600,000 at 21%, and above ₦3,200,000 at 24%. Before applying these rates, the employer deducts Consolidated Relief Allowance (CRA) which is the higher of ₦200,000 or 1% of gross income, plus 20% of gross income. Pension contributions are also tax-deductible. The monthly PAYE deduction is the annual tax divided by 12.
Under the Pension Reform Act 2014 the employee contributes a minimum of 8 percent of monthly emoluments, being basic, housing and transport, and the employer a minimum of 10 percent, into the employee's Retirement Savings Account with a licensed Pension Fund Administrator. The payslip shows the employee's 8 percent as a deduction, while the employer's 10 percent is an additional cost. The scheme is mandatory for organisations with three or more employees, and the worker chooses and keeps the same PFA even when changing jobs.
The National Housing Fund levy requires Nigerian workers earning above the set threshold to contribute 2.5 percent of basic salary, which the employer deducts and remits to the Federal Mortgage Bank of Nigeria. The contribution entitles the worker to access NHF mortgage financing and is refundable with interest on retirement or at age sixty if no loan was taken. On the salary slip it appears as a small NHF line calculated on basic pay rather than on gross.
The Consolidated Relief Allowance is the main personal relief under the Personal Income Tax Act. It is the higher of ₦200,000 or 1 percent of gross income, plus 20 percent of gross income, and is subtracted from gross, along with pension, NHF and life-assurance reliefs, before the graduated PAYE rates apply. Because of the CRA, low earners pay little or no PAYE, and it is why the tax line on a Nigerian payslip is lower than simply applying the rate bands to gross pay would suggest.