Skip to content
DayUtils

Nigeria PAYE Calculator 2026 – Income Tax Under the Nigeria Tax Act

Calculate your monthly PAYE income tax and take-home pay in Nigeria under the new personal income tax bands that apply from 1 January 2026. Includes the 8% pension, optional National Housing Fund and the new rent relief.

Loading tool…

How to use the Nigeria PAYE calculator

  1. Choose whether your amounts are monthly or yearly.
  2. Enter your gross pay — basic salary plus all allowances.
  3. Enter your pensionable pay: basic + housing + transport. Your employee pension is 8% of this. Enter 0 if you are not in a pension scheme.
  4. Enter the rent you pay for the same period.
  5. Tick National Housing Fund if 2.5% is deducted for NHF.

You’ll see your monthly PAYE, monthly take-home pay, pension, rent relief, taxable income and the tax charged in each band.

How PAYE is calculated from 2026

Taxable income = Gross pay − Pension − NHF − Rent relief

Rent relief = 20% of yearly rent, up to ₦500,000. Tax is then charged band by band:

Taxable income (yearly)Rate
First ₦800,0000%
Next ₦2,200,000 (to ₦3m)15%
Next ₦9,000,000 (to ₦12m)18%
Next ₦13,000,000 (to ₦25m)21%
Next ₦25,000,000 (to ₦50m)23%
Above ₦50,000,00025%

Worked example: ₦500,000 a month

  • Gross yearly pay = ₦6,000,000
  • Pensionable pay ₦400,000 a month = ₦4,800,000 → pension 8% = ₦384,000
  • Rent ₦100,000 a month = ₦1,200,000 → rent relief 20% = ₦240,000
  • Taxable income = 6,000,000 − 384,000 − 240,000 = ₦5,376,000
  • Tax: 0 on ₦800,000 + 15% × ₦2,200,000 (₦330,000) + 18% × ₦2,376,000 (₦427,680) = ₦757,680
  • Monthly PAYE ≈ ₦63,140; monthly take-home ≈ ₦404,860

That is an effective tax rate of about 12.6% of gross pay.

What changed under the new law

  • New bands replace the old 7%–24% bands, with a larger tax-free amount.
  • Consolidated Relief Allowance removed, replaced by a targeted rent relief.
  • Low earners exempt: taxable income up to ₦800,000 a year pays no tax.
  • Higher earners pay more at the top rate of 25%.

The aim of the reform was to reduce the burden on low and middle earners. Many workers earning under about ₦1.7 million a month pay similar or less tax than before, but this depends on your pay and reliefs.

Tips

  • Keep your rent receipts and tenancy agreement — you may need them to claim rent relief.
  • Check your payslip each month for the pension, NHF and tax lines.
  • Ask your HR team if your employer has updated its payroll for the new law.

Kenyan and South African workers can use the Kenya PAYE calculator and the South Africa tax calculator. Rates are from the Nigeria Tax Act 2025 and stored with the date we last checked them; please confirm with the Nigeria Revenue Service or your state IRS. This is an estimate, not tax advice — see our disclaimer.

Frequently asked questions

What are the new PAYE tax bands in Nigeria from 2026?

Under the Nigeria Tax Act 2025: the first ₦800,000 of taxable income a year is tax-free; the next ₦2.2 million is taxed 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%.

Is the Consolidated Relief Allowance still available?

No. The Consolidated Relief Allowance (CRA) has been removed. In its place there is a rent relief of 20% of the annual rent you pay, up to ₦500,000 a year.

How much tax do I pay on ₦500,000 a month?

On ₦6 million a year, with ₦4.8 million of pensionable pay (8% pension = ₦384,000) and ₦1.2 million of rent (relief ₦240,000), taxable income is about ₦5.38 million and PAYE is about ₦757,680 a year — roughly ₦63,140 a month.

Who is exempt from PAYE?

People whose taxable income is ₦800,000 a year or less pay no income tax. Low earners therefore pay nothing under the new bands.

What deductions reduce my taxable income?

Pension contributions under the Pension Reform Act, National Housing Fund contributions, National Health Insurance contributions, life insurance premiums, interest on loans for an owner-occupied home, and the rent relief. This calculator includes pension, NHF and rent relief.

Is this the final tax my employer will deduct?

It is an estimate. Your employer and your state internal revenue service apply the exact rules, allowances and any other deductions. Check your payslip and the official guidance.

Related tools

Last updated: