Reading a Nigerian salary advert: gross, net and what is missing

Two adverts can both show ₦300,000 a month and pay very different amounts into your bank account. The difference is usually in what the figure includes: gross or net, basic pay or total package, and which allowances are counted.

Gross and net

Employers in Nigeria usually quote gross monthly pay, which is before tax and pension. Two deductions apply to most employees. Personal income tax is deducted under PAYE, after reliefs. Pension contributions under the Pension Reform Act 2014 are at least 8% from the employee and 10% from the employer, calculated on basic, housing and transport allowances.

Allowances and the total package

• Basic and fixed allowances. Ask which parts of the gross are fixed and which can change.
• Housing, transport and utility allowances. Find out whether they are part of the pension base and how they are taxed.
• Benefits. Health insurance, annual leave, a thirteenth month, training, bonuses and transport are real money even if they are not in the headline figure.

A simple comparison sheet

Fill in the same lines for each offer and compare the take-home figure, not the headline.

Ask what the figure includes

A salary line in an advert can mean very different things. Some state gross monthly pay. Others state a basic salary and leave housing, transport and other allowances to be discussed. Before you compare two offers, ask the employer to confirm what the figure covers and whether it is monthly or annual.

Remember that statutory deductions come off the gross. PAYE income tax and your employee pension contribution reduce the amount that reaches your account, so a higher gross does not always mean more take-home pay. Compare net figures wherever you can.

• Gross or net, and is it monthly or annual?
• Which allowances are included, and are they fixed or paid on a condition?
• Is there a bonus, and how is it measured and paid?