Take a gross annual salary of N6,000,000 with a monthly emolument of N400,000 and no NHF opt-in. The employee pension is 8% of the N400,000 emolument, which is N32,000 a month or N384,000 a year. That pension is a deductible relief, so chargeable income drops to N5,616,000 and the PAYE on it works out to N800,880 for the year. Net annual pay is gross less PAYE less pension, which is N6,000,000 minus N800,880 minus N384,000, leaving N4,815,120. Spread over twelve months that is about N401,260 in the hand each month.
Line
Annual (NGN)
Gross salary
6,000,000
Less pension (8%)
384,000
Less PAYE
800,880
Net annual pay
4,815,120
Net monthly pay
401,260
How it is calculated
Take-home pay starts from gross salary and removes the deductions an employee actually bears. The employee pension contribution is 8% of monthly emolument, where emolument means basic salary plus housing and transport allowances rather than total gross pay. If the employee opts into the National Housing Fund, a further 2.5% of basic salary comes off. Both pension and NHF are deductible reliefs, so they shrink the chargeable income on which PAYE is charged across the six 2026 bands. Net pay is gross minus PAYE minus pension minus any NHF, and dividing the annual net by twelve gives the monthly figure. Minimum-wage earners face no PAYE, so for them only the pension and any NHF reduce the cheque.
Frequently asked questions
What is deducted from my Nigerian salary in 2026?
Three things commonly come off gross pay: PAYE income tax on chargeable income, the employee pension contribution of 8% of your monthly emolument (basic plus housing plus transport), and, if you opt in, the National Housing Fund at 2.5% of basic salary. Pension and NHF are deductible reliefs that lower the PAYE base.
What is the difference between emolument and gross salary for pension purposes?
Emolument for pension purposes is the sum of your basic salary, housing allowance, and transport allowance only. Other allowances such as meal, entertainment, or performance bonuses are excluded from the pension base even if they form part of your gross pay. That is why this calculator has a separate emolument field rather than using gross salary directly: pension at 8 percent is applied to the narrower emolument figure.
At what income level does PAYE become zero in Nigeria?
PAYE is zero when annual chargeable income is at or below N800,000. Chargeable income is gross pay minus the pension and NHF reliefs, so a gross salary slightly above N800,000 can still carry no PAYE if pension contributions bring chargeable income down to or below that threshold. The N800,000 tax-free band is the first slice in the 2026 progressive scale this calculator applies.
Is NHF mandatory or optional for private-sector employees?
Contributions to the National Housing Fund are compulsory for Nigerian employees earning above the national minimum wage, including private-sector workers, under the NHF Act. In practice enforcement varies, and some employers do not deduct it. This calculator treats NHF as a user-selectable option so you can model your actual payslip accurately. If your employer does deduct NHF, tick the box to see the correct net pay.