Take a gross annual salary of N6,000,000, a monthly emolument of N400,000, a monthly basic of N250,000, and no NHF. The employee pension is 8% of the monthly emolument, which is N32,000 a month or N384,000 a year. Pension is a deductible relief, so chargeable income is N6,000,000 minus N384,000, which is N5,616,000. Applying the 2026 PAYE bands to that, the first N800,000 is tax-free, the next N2,200,000 is taxed at 15% for N330,000, and the remaining N2,616,000 is taxed at 18% for about N470,880, giving PAYE of about N800,880. Net pay is the gross less PAYE less pension, which is N6,000,000 minus N800,880 minus N384,000, about N4,815,120 a year, or roughly N401,260 a month.
Item
Amount (NGN)
Gross annual salary
6,000,000
Employee pension (8%)
384,000
PAYE on chargeable income
800,880
Net annual pay
4,815,120
How it is calculated
The calculator turns a gross offer into net pay in the right order. It first works out the statutory deductions that are also tax reliefs: the employee pension at 8% of monthly emolument, and optional NHF at 2.5% of basic if you contribute, both annualised. These reliefs are subtracted from gross income to give chargeable income, because the 2026 Nigeria Tax Act applies PAYE to chargeable income, not to gross pay. PAYE is then computed across the six progressive bands, where the first N800,000 is tax-free and the rate rises from 15% up to 25% on the highest slice. Net pay is the gross less PAYE less the pension and any NHF, since those contributions leave your pay even though they reduce the tax. The result is shown both annually and monthly, which is useful when weighing a gross offer against your real take-home.
Frequently asked questions
How do I work out net pay from a gross offer in Nigeria?
Subtract the employee pension of 8% of monthly emolument and, if you contribute, NHF of 2.5% of basic, then apply PAYE on the chargeable income that remains after those reliefs. What is left is your net pay. This tool does that for an annual gross figure and reports both annual and monthly net.
Why do two candidates with the same gross salary sometimes take home different amounts?
Because their emoluments and basic salaries may differ even if the gross is identical. An offer structured with a higher basic and lower allowances produces a larger pension base and sometimes a larger NHF deduction, both of which reduce take-home. Conversely, the same gross with a smaller basic and more non-pensionable allowances results in less pension deducted and more in the hand. Enter your specific emolument and basic figures to see your accurate net.
Is the PAYE rate the same across all Nigerian states?
The personal income tax bands and rates are set federally under the Nigeria Tax Act and are the same nationwide. However, PAYE is administered by the state internal revenue service of the state where you work, not by FIRS. The bands this calculator applies are the 2026 federal schedule, which your state service uses as the basis for assessment. Confirm the current bands with your state revenue service if you are unsure.
How does gross-to-net differ from net-to-gross?
Gross-to-net starts from the salary a job offer states and works downward through deductions to find what you will receive. Net-to-gross does the reverse: you enter the take-home you want and the calculator grosses it up to tell you what salary you need to negotiate for. Use gross-to-net to evaluate an offer, and net-to-gross when you are negotiating and need to frame a target net pay as a gross figure for HR.