Payslip Generator

What Is a Payslip?

A payslip (also called a pay stub or salary slip) is a document issued by an employer to an employee detailing their earnings, deductions, and net pay for a specific pay period. In many countries, employers are legally required to provide payslips to their employees.

Nigerian Payroll Structure

Nigerian payroll typically follows a structured breakdown: Basic Salary forms the foundation (usually 40-50% of gross), with Housing Allowance (often 25-50% of basic), Transport Allowance, Meal Allowance, and Utility Allowance making up the rest. This structure is important because certain deductions like pension and NHF are calculated based on basic salary rather than gross pay.

PAYE Tax in Nigeria

Pay-As-You-Earn (PAYE) tax in Nigeria is administered by the Federal Inland Revenue Service (FIRS). After applying the Consolidated Relief Allowance (CRA) — which is the higher of ₦200,000 or 1% of gross income, plus 20% of gross income — the remaining taxable income is taxed progressively: First ₦300,000 at 7%, next ₦300,000 at 11%, next ₦500,000 at 15%, next ₦500,000 at 19%, next ₦1,600,000 at 21%, and above ₦3,200,000 at 24%.

Pension Contributions

Under Nigeria's Pension Reform Act and PenCom regulations, employees contribute 8% and employers contribute 10% of monthly emoluments (basic + housing + transport). The National Housing Fund (NHF) deducts 2.5% of basic salary for employees earning above the minimum wage. NHIS contributions vary by organization.

UK Payslip Requirements

In the UK, payslips must legally show gross pay, variable deductions (tax, NI), fixed deductions, net pay, and the method and amount of any part-payment. Since April 2019, payslips must also show the number of hours worked for hourly-paid employees.

Understanding Your Payslip

Reading a payslip correctly is a financial literacy skill everyone should have. Gross pay is your total earnings before any deductions. Statutory deductions include income tax and social insurance. Voluntary deductions may include pension top-ups, union dues, or loan repayments. Net pay (take-home pay) is what lands in your bank account.

Payslips for Freelancers

While traditional payslips are for employed workers, freelancers and contractors may need to generate invoices or self-employment income statements. Some mortgage lenders and landlords may request payslip-equivalent documents from self-employed individuals as proof of income.