Is gratuity statutory in Nigeria?

No. There is no statutory gratuity for private-sector workers in Nigeria. Gratuity is paid only where an employment contract, collective agreement, or company handbook provides for it. The Pension Reform Act covers retirement savings, but gratuity itself remains a contractual benefit.

How is gratuity usually calculated?

Where a scheme exists, gratuity is commonly a set fraction of monthly basic salary multiplied by completed years of service — for example, one month's salary for each year served. This tool lets you set the rate per year so it matches your specific scheme.

What is the Pension Reform Act contribution?

The Pension Reform Act mandates a Contributory Pension Scheme: a minimum of 18% of monthly emoluments, with at least 10% from the employer and 8% from the employee, paid into a Retirement Savings Account. This is separate from any contractual gratuity.

Are terminal benefits taxed in Nigeria?

Gratuities are generally exempt from personal income tax in Nigeria, while pension withdrawals taken in line with the Pension Reform Act are also tax-exempt. Always confirm current treatment, as exemptions can have conditions.

Does this calculator store my data?

No. Everything is calculated locally in your browser and nothing is uploaded, so your salary details stay private.

Nigeria Gratuity / End-of-Service Calculator

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This Nigeria gratuity / end-of-service calculator estimates the lump sum due when you leave a job. Nigeria has no statutory private-sector gratuity, so the figure depends on your employer’s scheme rate, your service length, and your final salary.

How it works

A typical contractual gratuity is a multiple of monthly basic salary for each year of service:

Gratuity = Last monthly salary × Rate per year × Years of service

For example, a scheme paying “one month per year” has a rate of 1.0. Separately, the Pension Reform Act requires a Contributory Pension Scheme — a minimum 18% of monthly emoluments (at least 10% employer, 8% employee) into your Retirement Savings Account. This tool shows both the contractual gratuity estimate and the monthly pension contribution.

Example

With a last salary of ₦300,000, a scheme rate of 1 month per year, and 8 years of service, the gratuity is ₦300,000 × 1 × 8 = ₦2,400,000. The monthly pension contribution at 18% of basic is ₦54,000.

Notes

There is no statutory gratuity — check your contract or staff handbook for the exact rate.
The Pension Reform Act scheme is separate from gratuity and funds your Retirement Savings Account.
Gratuities are generally tax-exempt, but confirm current rules for your situation.