Deductions

Statutory and voluntary deductions applied in Nigerian payroll.

Total Deduction Types

7

Statutory

4

Voluntary

3

Statutory Deductions
Mandatory

Pay As You Earn (PAYE) Tax
Federal Inland Revenue Service (FIRS)

Personal income tax deducted at source per the Personal Income Tax Act (PITA) 2011 (as amended). Progressive rates 7%–24%.

Basis

% of Gross

Employee

Progressive

Employer

N/A

Pension Contribution (Employee)
PenCom

Mandatory 8% employee contribution to a Pension Fund Administrator per the Pension Reform Act 2014.

Basis

% of Contractual

Employee

8%

Employer

10%

National Health Insurance Scheme
NHIA

1.75% employee contribution to the NHIS for access to healthcare in accredited facilities.

Basis

% of Basic

Employee

1.75%

Employer

3.75%

National Housing Fund
FMBN

2.5% of basic salary contributed to the Federal Mortgage Bank of Nigeria for affordable housing access.

Basis

% of Basic

Employee

2.5%

Employer

N/A

Voluntary Deductions
Optional

Salary Advance / Loan Repayment

Monthly instalment repayment for approved salary advances or staff loans.

BasisFixed

Amount varies per employee agreement.

Staff Cooperative Society

Voluntary monthly contribution to the Horneets Employee Cooperative Society.

BasisFixed

Amount varies per employee agreement.

Trade Union Dues

Monthly deduction for registered union members per collective bargaining agreement.

BasisFixed

Amount varies per employee agreement.