An hourly rate annualised, gross and net.
Gross annual salary
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Net annual (after PAYE)
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Gross monthly
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From a rate per hour to a number on your offer letter
Contract and gig work in Nigeria is usually quoted by the hour, but salaries, loan applications, and rent negotiations all run on annual figures. This tool bridges the two. It multiplies your hourly rate by the hours you work each week and the weeks you work each year to land on a gross annual salary, then applies the pay-as-you-earn scale to show what actually reaches your account.
The default of 40 hours across 52 weeks gives 2,080 paid hours, the convention most employers use for a standard full-time year. If you take unpaid leave, change the weeks. If you routinely work longer, change the hours. The annualised gross is only as honest as those two inputs, so set them to the hours you are genuinely paid for rather than the hours you are contracted on paper.
What pay-as-you-earn takes out
Once you have a gross, the tool runs it through the personal-income-tax bands an employer would use to deduct PAYE. The scale this calculator applies is progressive: the first slice of income is tax-free, and each higher slice is taxed at a rising rate. Critically, the bands bite on chargeable income, and earnings at or below the national minimum wage, NGN 840,000 a year in the figures used here, are exempt from employment tax altogether. So a low hourly rate over few hours can come out entirely untaxed.
NGN 3,000 an hour, annualised
Walk through the defaults using the rates this calculator applies. At NGN 3,000 an hour for 40 hours a week across 52 weeks, gross pay is NGN 6,240,000, or NGN 520,000 a month. Running that gross through the bands produces PAYE of NGN 913,200, leaving net annual pay of NGN 5,326,800. The first NGN 800,000 escapes tax, the band up to NGN 3 million is charged at 15 percent, and the remainder up to NGN 6.24 million falls in the 18 percent band.
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The chart splits the gross annual salary into the part you keep and the part PAYE claims.
Why your real take-home is probably higher
Here is the honest caveat. This tool applies the bands with no reliefs subtracted, so the PAYE figure is the upper bound. In practice your employer first removes pension, and you may also claim the National Housing Fund, health-insurance premiums, and rent relief, all of which shrink chargeable income before tax is worked out. Once those come off, the net pay on the same gross is usually a little higher than the figure shown. Treat the result as a conservative floor for take-home rather than the final payslip.
A practical point for freelancers: an hourly rate is not a salary until you account for the weeks you do not bill. If you take four weeks off and lose a fortnight to gaps between clients, set weeks to 46, not 52, or you will overstate your year. The honest gross is what survives the unpaid weeks, and that is the number to quote when a bank asks your annual income.
Should I include overtime or bonuses in the hourly rate?
Keep the hourly rate as your base rate and capture predictable extras through the hours field rather than inflating the rate. One-off bonuses do not annualise cleanly, so leave them out of this estimate and treat them as separate taxable income when they land. The aim here is a steady-state annual figure, not a forecast of your best month.
Who administers the PAYE this shows?
PAYE in Nigeria is collected by your state internal revenue service, for example the Lagos State Internal Revenue Service, operating within the federal framework that recent reform reshaped. Because several bands and reliefs are still in transition, confirm the current scale and the minimum-wage exemption with your state revenue service and the Federal Inland Revenue Service before relying on the net figure for a contract or a loan.