Payroll & HR terms, in plain English.

An extra month's pay, commonly paid at year-end as a bonus.

An addition to basic pay, such as housing or transport — may be taxable or exempt.

Finalising a payroll run; locks the period and makes the figures immutable.

A deduction that couldn't be fully recovered this month, carried forward.

The file or list instructing the bank to pay each employee's net pay.

The core fixed component of pay, used as the base for several statutory calculations.

Additional pay for performance or at a set time, taxable as income.

The old blanket personal relief, abolished by the Nigeria Tax Act 2025.

Any amount removed from gross pay — statutory or voluntary.

Turning an approved run into a bank payment batch, then a NIBSS file, then reconciling.

Letting employees draw pay they've already earned before payday.

Total PAYE divided by gross pay — the real percentage of pay lost to tax.

A portal where staff view payslips and make requests themselves.

The employer's annual PAYE return filed with the state tax authority.

A lump sum paid to an employee on exit, often based on length of service.

Total earnings before any deductions — basic plus all allowances.

Software that manages employee records and HR processes.

Industrial Training Fund levy — 1% of annual payroll for qualifying employers.

Credit extended to an employee, repaid via payroll deductions.

Separation of duties — the person who runs or creates something can't also approve it.

What an employee actually receives after all deductions.

A 2.5%-of-gross contribution to the National Housing Fund (optional in the private sector).

Health insurance — 5% employee / 10% employer of basic, for employers with 10+ staff.

The bulk-payment CSV your bank expects to pay everyone in one upload.

Employer contribution (1% of payroll) to the Employees' Compensation Scheme.

Managing an employee's exit cleanly and compliantly.

Bringing a new hire into the organisation and its systems.

A single earning or deduction — basic, an allowance, a loan, or PAYE.

Pay As You Earn — income tax deducted from salaries at source and remitted to the state tax authority.

The process of calculating and approving pay for a period.

An itemised statement of an employee's pay and deductions for a period.

Mandatory retirement savings — typically 8% employee + 10% employer of qualifying pay.

Basic + Housing + Transport — the base pension is calculated on.

The Pension Fund Administrator and the employee's Retirement Savings Account number.

Advisory anomaly checks before a payroll run — missing bank account, zero net, big swings.

Adjusting pay for a partial period worked.

Paying withheld statutory amounts to the relevant authority.

A deduction of 20% of annual rent paid, capped at ₦500,000, introduced by NTA-2025.

Month-end close — locks the current period and opens the next.

A lump sum paid ahead of payday and recovered from future salary.

A reusable template of pay elements and amounts assigned to employees.

Paying one salary across two or more bank accounts.

A deduction required by law: PAYE, pension and NHF.

The identifiers payroll needs — Bank Verification Number, National ID, Tax ID.

Income left after statutory deductions and reliefs, on which PAYE bands are applied.

A comparison of the current run against the previous one to catch anomalies.