Nigerian pay packages are structured differently from most markets, and understanding the structure is worth real money.
The typical structure
A basic salary plus a set of allowances:
Housing — commonly 50-60% of basic
Transport
Meal, education, utilities and others by industry
None of these allowances are statutory. They are market practice, and employers tailor packages for retention and competitiveness.
The pensionable base
Pension contributions apply to basic + housing + transport only.
So an offer where the basic is small and the non-pensionable allowances are large will produce a lower pension over time, even if the monthly total looks identical to a better-structured offer.
Location changes the numbers
Housing and transport allowances are highest in Lagos and Abuja, reflecting cost of living. A nominally similar role elsewhere may come with a lower total package.
Currency
Pay may be in naira or in an agreed foreign currency where the contract provides for it. If part of your pay is in foreign currency, be clear on the conversion basis and when it applies.
Payment frequency
Monthly, bi-monthly or weekly, depending on the contract.
Questions worth asking at offer stage
What is the basic, separately from allowances?
Which components are pensionable?
Are allowances fixed or reviewed?
What leave does the contract give, beyond the statutory floor?
Is there a collective agreement covering the role?
Public holidays
Where a public holiday falls on a weekend, it is typically lost unless the government mandates a compensatory day off.
Frequently asked questions
How is a Nigerian pay package structured?
A basic salary plus allowances for housing — commonly 50-60% of basic — transport, meals, education and utilities. The allowances are market practice, not statutory.
Which parts of my pay are pensionable?
Basic salary plus housing and transport allowances. Other allowances do not attract pension contributions.
Why do packages differ by city?
Housing and transport allowances are highest in Lagos and Abuja because of cost of living. A similar role elsewhere may come with a lower total package.
What should I ask when I get an offer?
What the basic is separately from allowances, which components are pensionable, whether allowances are reviewed, what leave the contract gives, and whether a collective agreement applies.
What happens when a public holiday falls on a weekend?
It is typically lost unless the government mandates a compensatory day off.