Employment Cost Calculations for a ₦ 80,000.00 Salary in Nigeria
Employing staff in Nigeria involves understanding the various costs associated with a salary. For a salary of ₦ 80,000.00 per annum, there are several factors that contribute to the total employment cost. This article aims to provide a detailed breakdown of these costs, helping employers in Nigeria navigate through the financial responsibilities of hiring employees.
Nigeria Cost of Employee Earning ₦ 80,000.00 Salary per Annum Calculation | ₦ 80,000.00 | Annual Salary in 2024 |
| + | ₦ 9,600.00 | Nigeria Employers Social Security Contributions on ₦ 80,000.00 in 2024 |
| |
| = | ₦ 89,600.00 | Total Payroll cost of Employee in Nigeria in 2024 |
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₦ 80,000.00 Salary in Nigeria - Payroll Cost Analysis
As an employer in Nigeria, it is clearly important to understand the gross salary you pay your employees as this figure tends to be used for salary comparison against other related jobs and positions when recruiting and retaining staff in Nigeria. A good employer also understands the value of understanding "net pay" or "take home pay" as it is commonly referred to. Visability of the take home pay your employees in Nigeria attain is important for understanding how they cope with the cost of living in Nigeria and ensuring that they have sufficient funds to engage their focus in work activities during employment hours, i.e. they are not preoccupied with financial concerns due to poor salary or considering leaving for better salary package oppertunities.
Employer Cost Elements
Employee Cost Elements Key Points:
Employer Socail Security1: 10.71%
Gross Salary1: 89.29%
₦ 80,000.00 Salary Elements
₦ 80,000.00 Salary Elements Key Points:
Employee Socail Security2: 9.56%
Personal Income Tax2: 6.33%
Take Home Pay2: 84.11%
Note1: Employer Social Security and Salary percentages shown as a percentage of total employment cost in Nigeria.
Note2: Employee Social Security, Personal Income Tax and Take Home Pay in Nigeria shown as a percentage of Gross Salary in Nigeria in 2024.
What is the take home pay on a ₦ 80,000.00 salary in Nigeria?
For our ₦ 80,000.00 salary in Nigeria, our employee would have an annual take home pay after payroll deductions and taxes of ₦ 67,285.50 which is 84.11% of their gross pay, you can see a salary and payroll deductions example for ₦ 80,000.00 here.
What are the employer costs on a ₦ 80,000.00 salary in Nigeria?
As we showed on the snapshot table earlier, the cost on an employee on a ₦ 80,000.00 annual salary in Nigeria is ₦ 89,600.00, let's take a look at how this figure was calculated:
Nigeria: Employer Social Security and Payroll Contributions Calculation 2024 | ₦ 8,000.00 | Nigeria Employers Contributions for National Pension Scheme in 2024 |
| + | ₦ 800.00 | Nigeria Employers Contributions for National Social Insurance Trust Fund (NSITF) in 2024 |
| + | ₦ 800.00 | Nigeria Employers Contributions for Industrial Training Fund (ITF) in 2024 |
| |
| = | ₦ 9,600.00 | Nigeria Employers Contributions on ₦ 80,000.00 in 2024 |
Nigeria: Employer Contributions Calculation for National Pension Scheme 2024 | ₦ 80,000.00 | Salary in 2024 |
| x | 10% | Nigeria Employer Contribution Rate for National Pension Scheme in 2024 |
| |
| = | ₦ 8,000.00 | Nigeria Employers Contributions for National Pension Scheme on ₦ 80,000.00 in 2024 |
Nigeria: Employer Contributions Calculation for National Social Insurance Trust Fund (NSITF) 2024 | ₦ 80,000.00 | Salary in 2024 |
| x | 1% | Nigeria Employer Contribution Rate for National Social Insurance Trust Fund (NSITF) in 2024 |
| |
| = | ₦ 800.00 | Nigeria Employers Contributions for National Social Insurance Trust Fund (NSITF) on ₦ 80,000.00 in 2024 |
Nigeria: Employer Contributions Calculation for Industrial Training Fund (ITF) 2024 | ₦ 80,000.00 | Salary in 2024 |
| x | 1% | Nigeria Employer Contribution Rate for Industrial Training Fund (ITF) in 2024 |
| |
| = | ₦ 800.00 | Nigeria Employers Contributions for Industrial Training Fund (ITF) on ₦ 80,000.00 in 2024 |
These calculations are based on the annual gross salary of ₦ 80,000.00 and the Social Security Rates and Thresholds for Nigeria during the 2024 tax year which are displayed below.
Nigeria Social Security in 2024: Rates for Employers and Employees| Social security category | Employee | Employer | Total |
|---|
| National Pension Scheme | 8% | 10% | 18% |
| National Social Insurance Trust Fund (NSITF) | 0% | 1% | 1% |
| Industrial Training Fund (ITF) | 0% | 1% | 1% |
| National Housing Fund (NHF) | 2.5% | 0% | 2.5% |
Nigeria Social Security in 2024: Earnings Thresholds for Employers and Employees| Social security category | Employee | Employer |
|---|
| Min. | Max. | Min. | Max. |
|---|
| National Pension Scheme | n/a | n/a | n/a | n/a |
| National Social Insurance Trust Fund (NSITF) | n/a | n/a | n/a | n/a |
| Industrial Training Fund (ITF) | n/a | n/a | n/a | n/a |
| National Housing Fund (NHF) | ₦ 30,000.00 | n/a | n/a | n/a |
Holistic Cost of Employee in Nigeria calculations
In this cost of employment analysis of a ₦ 80,000.00 salary in Nigeria we have focused on the specific payroll elements of Basic Salary and Social Security but this is not a holistic employment cost calculation. The true cost of employing someone with a salary of ₦ 80,000.00 per annum in Nigeria extends well beyond the gross salary. Employers must account for social security contributions, taxes, additional benefits, training costs, administrative expenses, and legal obligations. A comprehensive understanding of these elements is crucial for effective financial planning and management of human resources in Nigeria. This is particulalry true for the first year of employment when setup costs are higher.
1. Basic Salary
The base of the employment cost is the gross salary, which in this case is ₦ 80,000.00 per annum. This amount is what the employee earns before any deductions or additional costs are considered.
2. Social Security Contributions
In Nigeria, employers are required to contribute to social security, which includes National Pension Scheme, National Social Insurance Trust Fund (NSITF), Industrial Training Fund (ITF), National Housing Fund (NHF). In 2024, an employer contributions typically amount to around 12% of the gross salary where as employees typically contribue 10.5% to social security in Nigeria.
3. Additional Benefits and Bonuses
Many employers in Nigeria offer additional benefits such as bonuses, and other perks. These should be factored into the total employment cost as they can significantly increase the overall financial commitment.
4. Training and Development Costs
Investments in training and development are vital for keeping your employees in Nigeria skilled and motivated. These costs can vary but should be included in the total employment cost calculation.
5. Administrative and Overhead Costs
There are also administrative costs related to Nigeria payroll management and other HR functions. Overhead costs like workspace, equipment, and utilities attributed to the employee should also be considered.
6. Legal Obligations and Insurance
Employers in Nigeria are also responsible for certain legal obligations and insurances, which can add to the employment cost. These include liability insurance and adherence to labor laws and regulations.
Similar Employee Cost Examples in the 80k earning range
You may also find the following salary based employee cost examples for Nigeria useful as they were viewed by others who read the "Employment Cost Calculations for a ₦ 80,000.00 Salary in Nigeria", alternatively you can create your own employee cost calculation here.