A prorated 13th month and the tax on it.
13th month, net
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13th month, gross
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Tax on it
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Your breakdown
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What a 13th month actually is in Nigeria
The 13th month is a bonus payment, usually one extra month of basic salary, paid near the end of the year. It is worth being clear about one thing: in Nigeria it is a contractual benefit, not a statutory entitlement. Nothing in the Labour Act forces an employer to pay it. If your contract or your company handbook promises a 13th month, it is owed. If it does not, the payment is at the employer's discretion, and many firms phrase it as a "performance bonus" that can be scaled up or down. This tool exists for the common case where you do get one and you want to know how much survives PAYE.
Whatever it is called, the tax treatment is the same. A 13th month is employment income. It joins your other earnings for the year and is taxed on the progressive bands that Nigeria applies to chargeable income. There is no separate, gentler rate for bonuses, and there is no tax-free bonus allowance. So the real question is not whether it is taxed, but at which band it lands once it stacks on top of everything else you earned.
Proration when you did not work the full year
If you joined in April, or left in September, a full month of basic feels generous, and most employers prorate. This calculator does the same. It takes your monthly basic, multiplies by the number of months you worked, and divides by twelve. Work seven months and you get roughly seven twelfths of a full month's basic. The proration applies to the gross payment first; the tax is worked out afterward on whatever the prorated figure turns out to be.
A practical caution: confirm what your employer counts as "basic". Nigerian payslips often split pay into basic, housing, and transport, and a 13th month is frequently calculated on basic alone, not on total gross. If you plug in your full monthly gross when the policy only pays a month of basic, the estimate will run high. Use the basic figure that your own contract names.
A prorated 13th month, worked through
Take someone on a monthly basic of NGN 300,000 who worked nine months of the year, with regular chargeable income of NGN 8,000,000 already taxed through the year. The 13th month grosses NGN 300,000 multiplied by nine twelfths, which is NGN 225,000. To find the tax on it, the tool taxes the regular income, then taxes the regular income plus the 13th month, and takes the difference. Because this person is already inside the band that the calculator applies at 18 percent (the slice of chargeable income between NGN 3 million and NGN 12 million), the whole NGN 225,000 is taxed at that 18 percent rate, giving NGN 40,500 of tax and a net of NGN 184,500. These figures use the rates this calculator applies; the structure of stacking the payment on top of existing income is the stable part, while the precise band edges should be confirmed with the FIRS or your state internal revenue service.
The mistake that surprises people
A 13th month feels like found money, so it is tempting to read the headline figure as the amount you will spend. The tax bite is easy to underestimate, especially if the payment tips you into a higher band than your salary normally reaches. If your regular chargeable income already sits near a band edge, part of the bonus can be taxed at the next rate up, and your effective deduction on the bonus is higher than the rate on your salary. Run your real numbers here before you commit the cash to anything.
Is the 13th month taxed separately from my salary?
No. There is no separate bonus tax in Nigeria. The payment is added to your other employment income for the year and taxed on the same progressive scale. This tool isolates the extra tax the 13th month causes by comparing your tax with and without it, which is the cleanest way to see what the payment itself costs you.
Does pension come out of a 13th month?
Usually not, but it depends on how your employer defines pensionable emolument. Mandatory pension contributions are calculated on basic plus housing plus transport, and a one-off 13th month is often outside that base. PAYE, however, does apply. If your employer treats the 13th month as pensionable, expect a pension deduction on top of the PAYE this tool shows. Confirm the position with your payroll team, and check current PAYE bands with the FIRS or your state internal revenue service, since the 2025 tax reform is still moving several figures.