Under the Pension Reform Act 2014, the employee contributes at least 8% and the employer at least 10% of monthly basic, housing and transport pay, 18% in total. On ₦250,000 of basic, housing and transport, that is ₦45,000 a month into the retirement savings account. Enter your figures below.
How the Pension Contribution Calculator works
- Enter monthly basic + housing + transport pay (not other allowances).
- Keep 8% and 10% unless your employer pays more.
- See the employee part, the employer part and the total.
- The yearly total shows what goes into your RSA in a year.
Worked example
A teacher's basic, housing and transport add up to ₦250,000 a month.
Employee (8%): ₦20,000
Employer (10%): ₦25,000
Total per month: ₦45,000
Total per year: ₦540,000
Common mistakes to avoid
- Working out pension on total gross including other allowances
- Employers not remitting contributions they deducted
- Not checking RSA statements
Need a different calculator?
Check your RSA statements
Your PFA sends statements showing every contribution. Compare them with your payslips. If the employer deducts your 8% but doesn’t remit it, report it to PenCom.
Pension and tax
Your 8% contribution is deducted before PAYE is worked out, so it lowers your tax. Voluntary contributions above the minimum can also reduce tax, subject to the rules on withdrawal.
Self-employed and micro pension
If you are self-employed, you can open a retirement savings account with any PFA under the micro pension plan and pay in what you can, when you can. Part of each contribution can be kept for emergencies, and the rest builds your retirement savings.
Frequently asked questions
Is pension 18% in Nigeria?
The minimum is 18%: 8% from the employee and 10% from the employer.
Do small businesses have to pay pension?
Employers with 3 or more staff must run the contributory pension scheme.
Is pension deducted before tax?
Yes. The employee's contribution reduces taxable income.
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