Your offer letter said ₦300,000 a month. Your bank alert says ₦265,750. Nobody stole ₦34,250; it went to deductions you probably never looked at. A payslip is the one document that explains the gap, and most first-time employees only check the last line.
This guide shows you how to read each part, how to check that the numbers make sense, and what to ask HR when they don't. I haven't put tax rates or percentages here, because they change and depend on your situation. Where a figure matters, I'll tell you where to confirm it.
The basic shape of a payslip
Almost every payslip, whether a printed sheet or a PDF from payroll software, has four blocks:
- Employee details: name, staff ID, department, pay month, bank account, and often your pension and tax numbers.
- Earnings: everything you are paid before deductions.
- Deductions: what is removed and sent to someone else (tax, pension, loans, dues).
- Net pay: what lands in your account.
The word to hold on to is gross. Gross is the total before anything is taken. Net, or "take-home", is what remains. Employers often quote gross in offer letters, so always ask which one a figure refers to.
Earnings: why your salary has many lines
Nigerian pay is usually split into components, not one lump. Typical lines are basic salary, housing allowance, transport allowance, and sometimes utility, meal, medical or "other" allowances.
This split matters because some deductions, especially pension, are calculated on certain components only, not on the full gross. Two people with the same gross can therefore have different deductions if their breakdown differs. Check your offer letter or contract; it should list the components. If the payslip lines don't match the letter, ask why.
Also look for one-off lines: bonus, overtime, arrears, back pay, or reimbursements. These can push a month's tax up, which surprises people who then think payroll made an error.
Deductions, one by one
PAYE (Pay As You Earn income tax)
PAYE is personal income tax, withheld by your employer and paid to the relevant state tax authority on your behalf. It is usually the biggest deduction. The amount depends on your taxable income after allowed reliefs and exemptions, so it is not simply a flat percentage of gross.
Tax rules have been under reform in recent years, so do not rely on a rate you saw in an old post or a friend's memory. Check the current rules with your state internal revenue service, the Federal Inland Revenue Service (now being restructured, so confirm the current body on its official site), or a qualified tax adviser. Your employer's payroll team should be able to explain how your own figure was worked out.
Pension contribution
Under Nigeria's contributory pension system, your employer deducts your share and also pays an employer share into your Retirement Savings Account (RSA), held with the Pension Fund Administrator (PFA) you chose. The deduction on your payslip is only your side. The employer's side usually does not appear as a deduction because it isn't taken from you, but many payslips show it as an information line.
Verify the law's minimum rates and the pay components they apply to on the National Pension Commission (PenCom) website. Then check your PFA statement or app to confirm the money actually arrived. Payslips show what was deducted; only your RSA shows what was remitted.
National Housing Fund (NHF)
Some employers deduct NHF contributions. Not every payslip has this line, and rules about who must contribute differ. If it appears, ask HR what it is based on and how you can later access it. Keep records.
Other common lines
- Staff loan or salary advance repayment: should match an agreement you signed.
- Cooperative or thrift society: voluntary, with its own statement.
- Union or professional dues: check you actually joined.
- Health insurance contribution: in some firms, an employee share.
- Absence or lateness deductions: should follow a written policy.
Any line you don't recognise deserves a question. Politely, in writing.
A worked example (hypothetical)
These numbers are made up to show the layout. They are not real tax or pension calculations, so don't use them to check your own.
| Item | Amount (₦) |
|---|---|
| Basic salary | 150,000 |
| Housing allowance | 75,000 |
| Transport allowance | 45,000 |
| Other allowance | 30,000 |
| Gross pay | 300,000 |
| Pension (employee share) | -16,000 |
| PAYE | -14,500 |
| NHF | -3,750 |
| Total deductions | -34,250 |
| Net pay | 265,750 |
Here is the check you would do. First, add the earnings: 150,000 + 75,000 + 45,000 + 30,000 = 300,000. Second, add the deductions: 16,000 + 14,500 + 3,750 = 34,250. Third, subtract: 300,000 - 34,250 = 265,750. If your own payslip doesn't add up this way, that alone is a reason to write to payroll.
Then do the harder checks: does the pension figure match the PenCom rule applied to the components your contract names, and does the PAYE figure match what a current calculation gives? Ask HR for the working, not just the result.
A five-minute monthly check
- Confirm the name, account number and pay month are right.
- Compare gross with your offer letter or latest contract.
- Add up earnings and deductions yourself.
- Match net pay with the bank credit exactly.
- Every few months, open your PFA app or statement and see that pension contributions are arriving. If you want a line-by-line walkthrough, see our post on reading a PFA statement.
- Save every payslip as a PDF in a folder with a backup, such as email or cloud storage.
Common mistakes
- Comparing offers by gross only. A higher gross with heavy allowances you can't count on can pay less than a lower, simpler one. Before accepting, use the questions in our post on questions to ask before accepting a job offer.
- Never checking remittances. Deductions that are never paid over are a real risk. Your RSA is the proof.
- Not keeping payslips. Banks, visa offices and landlords often ask for several months of payslips or statements. You'll also need them if you ever dispute pay.
- Assuming a drop in net pay is an error. Bonuses, new loans or a changed tax position can explain it. Ask before accusing.
- Ignoring probation terms. Pay and deductions during probation can differ. Our guide to probation periods in Nigeria covers what to confirm.
How to raise a payslip query
Write an email to HR or payroll, not a hallway complaint. Keep it short:
Dear [Name], I have reviewed my payslip for [month]. I would like to understand how the [line item] of ₦[amount] was calculated, and which components of my pay it is based on. Could you share the working or the policy reference? Thank you.
Attach the payslip. If you get no answer in a week, follow up once, then involve your line manager. For unresolved tax or pension problems, the relevant authorities (your state tax office, PenCom) have complaint channels listed on their official sites.
If you work outside Nigeria
Readers in Ghana, Kenya or South Africa will see similar blocks, but different names and rules: for example, social security and tax systems have their own acronyms and authorities. The checking habit is the same. Add up the lines, compare with your contract, and confirm that statutory contributions reach the right fund.
Frequently asked questions
Can my employer deduct money without telling me?
Statutory items such as tax and pension are required by law. Other deductions, such as loans or penalties, should be backed by your contract, a signed agreement or a written policy. If you can't find the basis, ask for it in writing.
Is my gross pay the same as my "annual salary"?
Not always. Some employers quote annual figures that include allowances and sometimes bonuses or employer pension. Ask for a monthly breakdown.
Do I get a payslip if I'm a contractor or freelancer?
Usually not. You typically invoice instead and handle your own tax. Confirm your status in writing, because misclassification is a common issue.
What if my employer says there is no payslip system?
You can still ask for a written breakdown of earnings and deductions each month. A simple signed statement is better than nothing, and it protects both sides.
Your next step
Pull out your latest payslip tonight. Add the lines, then open your PFA app and check the last three pension credits. If something is off, send the short email above before the next payroll run.
Always apply through the employer's official website or verified channels. Genuine employers never ask applicants to pay for a job, training, or an interview.