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The short answer
No. Neither the Labour Act nor the National Minimum Wage Act, as amended in 2024, requires an employer to pay a 13th-month salary. You are entitled to one only if your contract, staff handbook or a collective agreement promises it; otherwise it is a discretionary bonus. Where it is paid, it is employment income and taxed with the rest of your pay.
What the law does and does not require
A 13th-month salary is an extra month's pay, usually paid in November or December, so that a year's pay is spread over thirteen payments instead of twelve. Some private employers offer it as part of the package, and many employees assume it is a legal right. It is not.
The rules that do set minimum pay and conditions for Nigerian workers are these:
- The National Minimum Wage (Amendment) Act 2024, signed on 29 July 2024, raised the national minimum wage from ₦30,000 to ₦70,000 a month and set a review every three years. It sets a monthly floor. It says nothing about a 13th month.
- The Labour Act sets out written terms, wage deductions, hours, rest days and annual leave. In the text we read, it contains no provision on bonuses of any kind.
- Section 18 of the Labour Act gives at least six working days' paid holiday after twelve months' continuous service, and makes it unlawful to pay wages in place of that holiday while the contract continues. That is leave, not a bonus.
So the legal question becomes a contract question. If the promise is in writing, it can be enforced like any other term. If it is described as discretionary, or appears only in a manager's speech, it is much harder to claim.
How to tell if your 13th month is a right or a gift
Section 7 of the Labour Act requires an employer to give a worker a written statement of the terms of employment no later than three months after the job starts. Start there, then check the other documents.
| Where it is written | What it usually means |
|---|---|
| Offer letter or contract states an annual package of 13 months' pay | Contractual. The employer must pay it, or agree a change with you. |
| Staff handbook lists a 13th-month payment without conditions | Likely contractual if the handbook forms part of your terms. Check whether the contract refers to it. |
| Handbook says payment is 'at management's discretion' or 'subject to performance' | Discretionary. The employer can decide not to pay in a bad year. |
| Collective agreement with a union | Binding on members covered by it, on the agreement's terms. |
| Paid every year but never written anywhere | Unclear. Long practice can support a claim, but it is weaker than a written term. |
Watch for pro-rating. Many employers pay a 13th month only to staff who were in post for the whole year, or pay a fraction to staff who joined mid-year. Some also exclude anyone who has resigned before the payment date. If the document is silent, ask HR in writing how it is calculated.
Is it the same as a bonus?
Not quite. A 13th month is usually a fixed amount, often one month's basic or gross pay. A performance bonus depends on results and can be zero. Some employers call their year-end bonus a 13th month even when it is discretionary, so read the wording, not the label. In the public service, pay changes come through the published salary structures and adjustments to them, such as the one that followed the 2024 minimum wage; any extra payment would need its own circular.
How a 13th-month payment is taxed
A 13th month is pay from employment, so it counts towards your chargeable income for the year and is normally run through PAYE by your employer. Under the Nigeria Tax Act 2025, as summarised by BusinessDay, personal income tax uses these bands on annual chargeable income: the first ₦800,000 at 0%, the next ₦2.2 million at 15%, the next ₦9 million at 18%, the next ₦13 million at 21%, the next ₦25 million at 23%, and anything above ₦50 million at 25%.
Worked example (illustrative)
Ada earns ₦300,000 a month gross, or ₦3,600,000 a year. Her contract adds a 13th month of ₦300,000, so her year's pay is ₦3,900,000. For simplicity, this example ignores pension, NHF and rent relief, which would lower her chargeable income in practice.
| Without 13th month | With 13th month | |
|---|---|---|
| Annual pay | ₦3,600,000 | ₦3,900,000 |
| First ₦800,000 at 0% | ₦0 | ₦0 |
| Next ₦2,200,000 at 15% | ₦330,000 | ₦330,000 |
| Balance at 18% | ₦600,000 × 18% = ₦108,000 | ₦900,000 × 18% = ₦162,000 |
| Total tax for the year | ₦438,000 | ₦492,000 |
The extra ₦300,000 adds ₦54,000 of tax, because it falls wholly in the 18% band. Ada keeps ₦246,000 of it before any pension deduction. Employers who spread PAYE evenly sometimes deduct a larger share in the month of payment, so the December payslip can look heavier than expected. If the total for the year looks wrong, ask payroll for the calculation or check with your state internal revenue service. Our guide to PAYE bands for 2026 explains reliefs in more detail.
Where Pryme fits
A lump sum in December is easy to spend before January rent and school fees arrive. Some people move it straight into a Naira Savings Box with a date attached, so it is there when those bills land. Rates are shown in the app before you choose. If you are planning the year around your pay, budgeting on a Nigerian salary walks through it step by step.
Questions people ask
Is 13th month salary compulsory in Nigeria?
No. No Nigerian statute requires it. It is owed only where your contract, handbook or a collective agreement promises it.
Can my employer stop paying 13th month?
If it is discretionary, yes. If it is a written contractual term, the employer would normally need your agreement to change it. Check your offer letter and handbook.
Do civil servants get 13th month salary?
Public servants are paid on published structures such as CONPSS. Any extra payment would need its own government circular, so ask your salary unit rather than relying on rumours.
Is 13th month salary taxed in Nigeria?
Yes. It is employment income, added to your year's pay and taxed under the Nigeria Tax Act 2025 bands, usually through PAYE.
Sources
- PaySpace: Nigeria National Minimum Wage (Amendment) Act 2024 · accessed Oct 2026
- Labour Act, Cap L1, Laws of the Federation 2004 (PLAC copy) · accessed Oct 2026
- BusinessDay: Nigeria Tax Act 2025 personal income tax explainer (12 Jan 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.