Plain-English definitions of the Nigerian payroll and tax terms you'll meet on a payslip.
Historical term.
Gratuity is a lump-sum payment an employer gives an employee at the end of their service, usually on retirement or after a set number of years, as a reward for long service.
Gross pay is your full salary before any deductions; net pay (take-home pay) is what actually enters your bank account after PAYE tax, pension and any other deductions have been removed.
The ITF (Industrial Training Fund) is a Nigerian government agency that funds workforce training, financed by a levy of 1% of annual payroll paid by qualifying employers.
Nigeria's national minimum wage is ₦70,000 per month, set by the National Minimum Wage (Amendment) Act 2024 and still the legal floor as of July 2026.
The NHF (National Housing Fund) is a Nigerian government savings scheme for housing: contributors pay 2.5% of their basic salary into the fund, managed by the Federal Mortgage Bank of Nigeria (FMBN), and in return can access low-interest housing loans.
The NSITF (Nigeria Social Insurance Trust Fund) runs the Employees' Compensation Scheme, insurance that pays employees or their families if they're injured, disabled or killed in the course of work. Employers fund it with 1% of monthly payroll.
PAYE (Pay As You Earn) is the system where your employer deducts your personal income tax from your salary each month and pays it to the state tax authority on your behalf.
PenCom, the National Pension Commission, is the government body that regulates and supervises all pension matters in Nigeria, including the mandatory contributory pension scheme employers must run under the Pension Reform Act 2014.
Remittance, in payroll, is the act of actually paying over the taxes and contributions you deducted from salaries, PAYE to the state tax authority, pension to each employee's PFA, and so on, to the bodies entitled to receive them.
Rent relief is a tax deduction under the Nigeria Tax Act 2025 that lets you deduct 20% of the annual rent you pay, capped at ₦500,000, from your income before PAYE is calculated.
Statutory deductions are the amounts an employer must take out of salaries, or pay on top of them, because the law says so, chiefly PAYE income tax and pension contributions in Nigeria.
Withholding tax (WHT) is an advance tax deducted at source: when a Nigerian business pays a contractor, consultant or supplier for certain services, it holds back a percentage (commonly 5% for individuals) and remits it to the tax authority as a prepayment of the recipient's income tax.