Nigeria Minimum Wage 2026: What It Means for Payroll by State

Nigeria’s statutory national minimum wage in 2026 is ₦70,000 per month. The National Minimum Wage Act, 2019, as amended in 2024, raised the national floor from ₦30,000 to ₦70,000 and applies across Nigeria, while several state governments have approved higher amounts for their public-sector employees.

For payroll purposes, the important distinction is between the national legal minimum and a state-approved minimum wage. A private employer in Lagos, for example, does not automatically use the Lagos State public-service wage unless a law, employment agreement, collective agreement, sector rule, or government directive makes that rate applicable to the employer.

This guide explains how Nigeria’s minimum wage affects monthly payroll, PAYE tax, pension calculations, state-by-state wage administration, and payroll records.

Last updated: September 26, 2026

What Is Nigeria’s Minimum Wage?

Nigeria’s national minimum wage is the lowest monthly wage legally payable to a covered worker for work performed under an employment relationship.

The 2024 amendment to the National Minimum Wage Act increased the amount from ₦30,000 to ₦70,000 monthly. President Bola Tinubu signed the amendment on July 29, 2024, following agreement between the Federal Government, organised labour, and private-sector representatives. The change was reported as applying nationwide and more than doubled the previous statutory wage, as confirmed by Reuters.

The national rate can be expressed as follows:

The weekly and daily figures are mathematical equivalents only. The law establishes a monthly national minimum wage, so employers should not treat the daily equivalent as a separate statutory daily rate without considering the worker’s contract, work pattern, and applicable labour rules.

The national minimum wage is scheduled for review every three years, rather than every five years under the former framework. A future review could alter the statutory floor, but a review announcement is not the same as a new legally effective rate.

Who Does the ₦70,000 Rule Cover?

The National Minimum Wage Act generally concerns employers and workers in Nigeria, including public and private employment. It is not limited to federal civil servants.

The practical scope includes:

• Private companies registered with the Corporate Affairs Commission.
• State and local government employees covered by public-service employment.
• Federal Government employees within the relevant salary structures.
• Small and medium-sized businesses with paid employees.
• Employees working in offices, shops, factories, schools, hospitality businesses, and other commercial establishments.

The exact application depends on the statutory definition of “worker,” the employment relationship, and any exclusions or exceptions in the Act. A genuine independent contractor, casual service provider, domestic arrangement, apprentice, or person outside the statutory definition may not be treated in the same way as a regular employee.

Employers should therefore classify each person correctly rather than changing an employee’s title to “contractor” solely to avoid payroll obligations. The substance of the relationship, including control, working hours, payment structure, and ongoing duties, may be relevant.

The national minimum wage is also separate from a worker’s total compensation package. Housing, transport, meals, bonuses, commissions, overtime, and other benefits may have different treatment under the employment contract and applicable law. Payroll teams should not assume that every benefit can automatically be counted as part of the ₦70,000 wage floor.

National Rate Versus State Rate

Nigeria has one national statutory minimum wage, but states may approve higher wages for their own public-service employees.

This creates two different payroll questions:

1. What is the minimum amount required by the national law?
2. Does a particular state or employment agreement require a higher amount?

A state government may announce ₦80,000, ₦85,000, or another higher figure for its civil servants. That announcement generally relates to the state public service unless it expressly extends to private employers or is adopted through another binding instrument.

Reported state-approved rates

The following table summarises publicly reported state rates available from official announcements and reputable reporting. State figures can change through new circulars, collective bargaining, court decisions, or later government approvals, so payroll teams should verify the latest state circular before processing salaries.

Nairametrics reported that, as of April 30, 2026, several states remained at ₦70,000 while others had approved higher state rates. Its published list included Delta, Kwara, Adamawa, Anambra, Abia, Borno, Yobe, Ekiti, Sokoto, Plateau, Taraba, and Bauchi at the ₦70,000 level, while other states had approved higher figures.

The reported figures are not a substitute for the official payroll instrument. A state may announce a wage politically, approve it through an executive decision, issue an implementation circular later, or apply it only to a defined category of public workers.

How Minimum Wage Changes Payroll

A higher minimum wage affects more than the basic salary line. It can change the entire payroll cost where other statutory deductions and benefits are calculated from salary or pensionable emoluments.

A payroll review normally covers:

• Basic salary.
• Housing and transport allowances.
• Overtime and shift payments.
• Employer pension contributions.
• Employee pension deductions.
• PAYE tax.
• National Housing Fund deductions where applicable.
• Employee compensation and insurance costs.
• Leave pay and terminal benefits.
• Salary-linked allowances and staff grades.

The total monthly cost of an employee is not necessarily ₦70,000 merely because the basic wage is ₦70,000. For example, an employer paying ₦70,000 basic salary plus ₦20,000 housing allowance and ₦10,000 transport allowance has gross monthly employment income of ₦100,000 before considering other items.

Example: monthly payroll increase

Assume a business had 12 covered employees earning ₦50,000 per month before the new wage floor.

This calculation excludes pension, PAYE administration, overtime, allowances, recruitment costs, and other employer expenses.

If the employees are in a state with a valid applicable rate of ₦85,000, the corresponding monthly wage bill becomes ₦1,020,000, producing a difference of ₦420,000 compared with the former ₦50,000 payroll.

PAYE Tax on a ₦70,000 Salary

Minimum wage does not mean that payroll is exempt from tax administration. Employees’ taxable income is calculated under the Personal Income Tax Act, Cap. P8, Laws of the Federation of Nigeria 2004, as amended.

Section 33 of the Personal Income Tax Act provides for the Consolidated Relief Allowance. The allowance is generally calculated as:

[ \text{CRA} = ₦200,000 + 20% \text{ of gross income} ]

subject to the statutory minimum rule based on 1% of gross income. After allowable reliefs and exemptions, taxable income is assessed using the graduated rates in the Sixth Schedule.

The commonly cited individual tax bands are:

FIRS guidance explains that PAYE is deducted from employment income and that employers generally submit monthly PAYE returns by the 10th day of the following month.

Illustrative PAYE calculation

Assume an employee earns only ₦70,000 per month and receives no other taxable employment income.

Applying the first two tax bands to ₦472,000:

• First ₦300,000 at 7% = ₦21,000.
• Remaining ₦172,000 at 11% = ₦18,920.
• Illustrative annual tax = ₦39,920.
• Illustrative monthly PAYE = approximately ₦3,326.67.

This is an educational example, not a universal payslip result. Actual PAYE can differ because of pension contributions, approved deductions, taxable benefits, exemptions, other income, payroll rounding, and changes in tax legislation or tax-authority practice.

Pension and Other Deductions

The minimum wage is a gross employment floor, not necessarily the amount credited to the worker’s bank account.

Under Nigeria’s Pension Reform Act 2014, the minimum employer contribution is generally 10% of monthly emoluments, while the employee contribution is generally 8% of monthly emoluments, subject to the Act and applicable pensionable-emolument rules.

If an employer treats ₦70,000 as pensionable monthly emoluments, the illustrative figures are:

The illustration does not determine the pensionable base for every employee. A contract or payroll structure may include basic salary, housing, and transport components, and the applicable pension rules may affect the calculation.

For the National Housing Fund, the National Housing Fund Act provides for a contribution from qualifying employees, commonly administered as 2.5% of basic salary. Whether the deduction applies and how it is processed depends on the employee’s coverage and the administering authority’s requirements.

The resulting net pay may therefore be lower than ₦70,000 after lawful deductions. The employer, however, cannot use deductions as a method of paying a gross wage below the statutory floor where the Act applies.

Payroll Treatment by Employer Type

Private employers

A private employer’s starting point is the ₦70,000 national floor for covered workers. The employer’s location does not automatically create a higher private-sector wage merely because the state government pays its civil servants more.

A higher amount may apply where:

• The worker’s employment contract states a higher salary.
• A collective bargaining agreement applies.
• A sector-specific wage order or regulation applies.
• The company has adopted the state rate.
• The worker performs duties under a government contract containing labour-cost conditions.
• A court or competent authority creates an enforceable obligation.

Federal Government employers

Federal payroll structures may apply consequential adjustments beyond the lowest salary point. A worker’s grade level and salary structure are therefore not calculated by simply multiplying ₦70,000 by a grade-level number.

Public institutions may use approved structures such as CONPSS, CONRAISS, CONTISS, or another authorised salary framework. Payroll officers need the applicable circular and effective date, including whether arrears are payable.

State and local governments

State and local government payrolls may have a higher approved rate than the national minimum. The relevant state circular can specify:

• Effective date.
• Eligible employees.
• Grade levels covered.
• Salary adjustment percentages.
• Treatment of allowances.
• Arrears.
• Verification requirements.
• Funding and implementation arrangements.

The state rate should not be inferred from newspaper headlines alone. Payroll departments need the operative government document.

How to Audit a 2026 Payroll

A structured payroll audit can reduce errors when a minimum wage changes.

1. Export the current employee master list and identify all workers earning below ₦70,000 monthly.
2. Separate employees by employer entity, work location, state payroll, grade level, and employment status.
3. Check whether a higher state rate applies to the organisation or only to state-government employees.
4. Review contracts, staff handbooks, collective agreements, and wage circulars.
5. Recalculate gross salary, pensionable emoluments, PAYE, and net pay.
6. Check whether overtime, leave pay, and allowances are linked to the revised wage.
7. Prepare an arrears schedule where the effective date is earlier than the payroll implementation date.
8. Update payslips and payroll software.
9. Reconcile PAYE and pension remittances after the first revised payroll.
10. Keep the approval, circular, payroll register, and calculation worksheet in the organisation’s records.

The Corporate Affairs Commission is relevant to employer identification because companies and business names are registered through CAC, but CAC registration does not itself determine a company’s minimum-wage amount. Labour obligations arise from employment law and the nature of the work relationship.

ToolBase Tools That Can Help

The Nigeria Payroll Calculator on ToolBase can be used to model gross pay, statutory deductions, and estimated net salary after changing the wage from ₦30,000 to ₦70,000 or a higher state rate.

The PAYE Tax Calculator can help create an illustrative PAYE schedule using annual gross income, allowable reliefs, and tax bands. For a full employer review, compare the calculator’s result with the relevant state tax authority’s filing requirements and your payroll records.

You can also use ToolBase’s Nigeria PAYE Tax Calculator and Salary and Payroll Calculator to test different salary structures.

Frequently Asked Questions

Is Nigeria’s minimum wage ₦70,000 in 2026?

Yes. The national statutory floor established by the 2024 amendment is ₦70,000 per month, subject to any later valid amendment or review.

Do all states pay exactly ₦70,000?

No. ₦70,000 is the national floor. Some states have approved higher rates for their public employees, including reported rates of ₦80,000, ₦85,000, ₦90,000, and ₦104,000 in particular states.

Does Lagos’ ₦85,000 rate automatically apply to every Lagos business?

Not automatically. The reported ₦85,000 rate concerns Lagos State public-service workers. A private business must examine the National Minimum Wage Act, its employment contracts, collective agreements, applicable sector rules, and any binding directive.

Is ₦70,000 the employee’s take-home pay?

Not necessarily. PAYE, pension, housing-fund contributions, and other lawful deductions may reduce net pay. The gross wage and take-home pay are different payroll concepts.

Is PAYE deducted from minimum-wage earners?

PAYE depends on taxable income after the applicable reliefs, exemptions, and deductions. A ₦70,000 monthly salary can produce a relatively low annual tax calculation, but the employer still has payroll and filing responsibilities where PAYE applies.

How often will the minimum wage be reviewed?

The 2024 amendment changed the review interval to three years. A review process does not automatically change the rate until a legally effective new amount is established.

Conclusion

For Nigerian payroll in 2026, the central rule is the ₦70,000 monthly national minimum wage, while state-approved public-service rates can be higher. Employers need to distinguish the national floor from state payroll announcements, recalculate statutory deductions, document the applicable wage source, and retain evidence supporting each payroll decision.

This article is for educational purposes only and does not constitute professional advice. Consult a qualified professional for your specific situation.

References

The national wage increase and three-year review framework are based on the National Minimum Wage Act, 2019, as amended in 2024, and the Federal Ministry of Labour and Employment’s published materials on the National Minimum Wage Act.

The ₦70,000 national figure was announced by the Presidency and subsequently enacted through the 2024 amendment process, as covered by Channels TV.

PAYE relief and graduated rates are drawn from Section 33 and the Sixth Schedule of the Personal Income Tax Act, Cap. P8, LFN 2004, as amended.