Nigeria’s personal income tax rules changed with the Nigeria Tax Act 2025, which is in force from 1 January 2026. The Nigeria PAYE calculator uses these rules and works on yearly figures.
Rates change, so confirm the current position with the Nigeria Revenue Service. The figures below were checked in November 2026.
What changed
The Consolidated Relief Allowance no longer applies. In its place, the first part of your income is tax-free and there is a separate relief for rent. This makes the calculation shorter than it used to be.
The steps
- Start with your yearly gross pay.
- Take off your pension contribution. Pensionable pay is basic, housing and transport together, often 60% to 80% of gross. The minimum employee rate under the Pension Reform Act is 8%.
- Take off rent relief, which is 20% of the rent you pay, up to N500,000.
- Take off other allowable deductions, such as NHF, NHIS, life insurance premiums and home loan interest.
- Apply the bands to the chargeable income that is left.
The yearly bands
Each rate applies only to the slice of income inside its band.
- First N800,000: 0%
- Up to N3 million: 15%
- Up to N12 million: 18%
- Up to N25 million: 21%
- Up to N50 million: 23%
- Above N50 million: 25%
A worked example
Take a yearly gross pay of N6,000,000, pensionable pay of 70% of gross, a pension rate of 8% and no rent or other deductions.
- Pension: 6,000,000 x 70% x 8% = N336,000.
- Chargeable income: 6,000,000 - 336,000 = N5,664,000.
- Tax on the first 800,000: nil.
- Tax on the next 2,200,000 (up to 3 million) at 15%: N330,000.
- Tax on the remaining 2,664,000 at 18%: N479,520.
- Total tax: N809,520.
- Take-home: 6,000,000 - 336,000 - 809,520 = N4,854,480, or N404,540 a month.
Now add yearly rent of N1,200,000. Rent relief is 20% of that, which is N240,000. Chargeable income falls to N5,424,000 and tax falls to N766,320, a saving of N43,200 a year.
Limits of the estimate
Employers may deduct differently, so check your payslip. The calculator covers one salary and the items listed above, not every relief.
Try your own numbers
Open the Nigeria PAYE calculator, enter your yearly gross, your pensionable share and your rent, and read the monthly take-home and monthly tax. If you are not sure of your pensionable share, check your offer letter or ask payroll.