A friend once turned down a job that would have made her richer. Two offers, same week: one Lagos fintech at ₦850,000 a month, one multinational at ₦1,000,000. She took the ₦1,000,000 without a second thought and it felt obvious. Eighteen months later she did the maths properly. The fintech had been carrying a 13th-month cheque, a comprehensive family HMO, a real learning budget, and share options that had since become worth something. The "smaller" offer was the bigger one. She had compared two numbers when she should have compared two packages.
This is the most common and most expensive mistake African professionals make when evaluating an offer: fixating on the base figure, the one bolded number at the top, and ignoring the stack of value sitting underneath it. Recruiters call the full picture total compensation, and the gap between it and base salary can easily be 30 to 50 percent of the headline. Here is how to see the whole thing, and how to negotiate it.
Base vs gross vs net: three numbers, not one
Base (or basic) salary is one component of your gross pay, often just 40 to 60 percent of it. In Nigerian payroll it matters disproportionately because pension and gratuity are usually calculated off basic plus a couple of defined allowances, not off your total.
Gross salary is base plus all your cash allowances (housing, transport) before deductions. This is usually the number in the offer letter.
Net (take-home) is what actually hits your account after PAYE tax and your pension contribution come out. We break the mechanics down fully in why your bank alert is smaller than your offer.
Under Nigeria's Tax Act 2025, effective 1 January 2026, the PAYE bands changed meaningfully. The first ₦800,000 of annual income is now tax-free, then income is taxed progressively up to 25% on the highest band. Two offers with identical gross figures but different structures can therefore produce different take-home, because pension and the new rent relief (20% of annual rent, capped at ₦500,000) reduce your taxable base.
Pension: the 8% + 10% you are quietly being paid
Under the Contributory Pension Scheme, the minimum is 8% from you and 10% from your employer, calculated on your basic, housing and transport allowances. That employer 10% is real money paid on your behalf into your Retirement Savings Account (RSA), and most candidates never count it. On a pensionable base of ₦9.6m, that is roughly ₦960,000 a year the employer is spending that never appears in your take-home but is unambiguously yours. An offer with a higher pensionable base builds your retirement faster and, because your 8% is tax-deductible, trims your PAYE. Some employers pay above the 10% minimum, or fund a gratuity on top. Ask. The structure of your allowances is one of the most negotiable and least negotiated parts of any Nigerian offer, as we flag in how to read a Nigerian job offer letter.
HMO and health cover: worth more than the premium suggests
Employer HMO premiums in Nigeria in 2026 run from roughly ₦30,000–₦80,000 a year for a basic individual plan to ₦200,000–₦600,000 for a comprehensive one, with comprehensive family cover for four often landing between ₦700,000 and ₦1.8m annually. If Employer A gives you and your family comprehensive cover and Employer B gives you a bare-bones individual plan, that is a swing of several hundred thousand naira in value, plus the difference between "walk into a tier-one hospital" and "exhaust your benefit cap on one admission." Check the hospital tier, whether dependants are covered, and the annual limit. Our rundown of the best HMOs in Nigeria for 2026 is a useful benchmark.
13th month, bonuses and allowances
A guaranteed 13th-month salary is a full extra month of gross pay, an instant ~8.3% uplift on your annual cash. Treat a contractual 13th month very differently from a "discretionary bonus", which may or may not arrive. For variable pay, ask: is it guaranteed or discretionary, what has it actually paid out over the last two years, and is it capped? On allowances, the distinction that matters is taxable vs pensionable. Cash allowances are generally taxable, and the specific ones defined as pensionable feed your RSA. A pure reimbursement of a work expense is neither salary nor a benefit, so do not let it be dressed up as one.
Equity and stock options: value it honestly, or not at all
Startup equity is where excitement outruns arithmetic. An offer of "0.5% of the company" or "50,000 options" is not money; it is a lottery ticket with homework. To value it honestly you need four facts: the number of shares/options, the strike price (what you pay to exercise), the current share price/valuation, and the vesting schedule (commonly four years with a one-year cliff). Your paper gain is roughly (current share value − strike price) × vested shares, before tax and before dilution.
The honest way to price options is to discount them hard. Most startups do not reach a liquidity event, vesting takes years, and future rounds dilute you. Treat equity as upside, never as the salary you live on.
