Nigeria PAYE Tax Calculator 2026
Updated for the Nigeria Tax Act 2025 (effective 1 January 2026). Free, accurate, no signup. The first ₦800,000 of your salary is now tax-free.
Annual: ₦6,000,000
Typical Nigerian payroll uses 70%. Pension and NHF are calculated on BHT only.
Rent relief = 20% × rent, capped at ₦500,000. Your rent relief: ₦0.
Monthly breakdown
See tax band breakdown ↓
Your chargeable income (gross minus reliefs) is ₦5,611,500. It's taxed progressively in slices:
2026 PAYE Tax Bands (Nigeria Tax Act 2025)
The new tax law replaces the old Consolidated Relief Allowance with a simpler progressive system. These are the bands that apply from 1 January 2026:
| Annual Chargeable Income | Tax Rate |
|---|---|
| First ₦800,000 | 0% |
| ₦800,001 – ₦3,000,000 | 15% |
| ₦3,000,001 – ₦12,000,000 | 18% |
| ₦12,000,001 – ₦25,000,000 | 21% |
| ₦25,000,001 – ₦50,000,000 | 23% |
| Above ₦50,000,000 | 25% |
Rates are marginal, not flat — you only pay each rate on the income within that band. Use the calculator above to see your exact tax.
What Changed in 2026?
- Tax-free threshold raised from ₦300,000 to ₦800,000. Anyone earning ₦66,667/month or less pays zero income tax.
- Consolidated Relief Allowance (CRA) abolished. Replaced with simpler rent relief: 20% of annual rent paid, capped at ₦500,000.
- Top rate is 25% (down from 24%), but only applies to income above ₦50M/year.
- Pension and NHF still deductible at 8% and 2.5% of BHT respectively.
- Most middle-income workers will pay less tax under the new law compared to the old CRA system.
How Nigerian PAYE Tax Is Calculated
Under the Nigeria Tax Act 2025, your PAYE is calculated in five steps:
- Calculate annual gross salary (monthly × 12 plus bonuses).
- Subtract pension contribution (8% of Basic + Housing + Transport).
- Subtract NHF contribution if you participate (2.5% of basic salary).
- Subtract rent relief (20% of annual rent, max ₦500,000).
- Apply the progressive tax bands to what remains (chargeable income).
Divide the resulting annual tax by 12 to get the amount your employer will deduct each month.
Frequently Asked Questions
Who qualifies for the ₦800,000 tax exemption?
Every Nigerian earner whose chargeable income (gross minus pension, NHF, and rent relief) is ₦800,000 or less per year. That's roughly ₦66,667/month and below.
Is the rent relief automatic?
No. You must declare rent paid to your employer's payroll team to claim the relief. The relief is 20% of your annual rent, capped at ₦500,000.
Are bonuses and 13th-month pay taxed differently?
No. Bonuses are added to your annual income and taxed through the same progressive bands. Most employers spread the tax across the year.
Do NYSC corps members pay PAYE?
No. With the federal allowance of ₦77,000/month (₦924,000/year), most corps members are at or below the ₦800,000 threshold after pension and NHF deductions, so they pay zero PAYE.
Is this calculator accurate?
The math reflects the Nigeria Tax Act 2025 as published. We update it whenever the law changes. For payroll-grade calculations including federal vs state tax, edge cases like terminal benefits, and unusual reliefs, consult a tax professional.