PAYE Tax Calculator Nigeria 2026
Calculate your PAYE income tax under the Nigeria Tax Act 2025, effective from 1 January 2026. Switch between new and old law to see your savings. Includes pension, NHF, NHIS and rent relief deductions. Monthly or annual input.
paye-calculator.tool — Nigeria Tax Act 2025 (Effective 2026)
Optional Deductions
Enter your income to see your PAYE tax breakdown.
2026 PAYE Tax Bands — Nigeria Tax Act 2025
| Annual Taxable Income | Rate | Max Tax in Band |
|---|---|---|
| First ₦800,000 | 0% | ₦0 |
| Next ₦2,200,000 | 15% | ₦330,000 |
| Next ₦9,000,000 | 18% | ₦1,620,000 |
| Next ₦13,000,000 | 21% | ₦2,730,000 |
| Next ₦25,000,000 | 23% | ₦5,750,000 |
| Above ₦50,000,000 | 25% | Unlimited |
Effective from 1 January 2026 under the Nigeria Tax Act, 2025 signed by President Tinubu on 26 June 2025.
Nigeria Tax Act 2025 — What Changed in 2026
President Tinubu signed the Nigeria Tax Act (NTA) 2025 on 26 June 2025. It took effect from 1 January 2026 and completely replaces the Personal Income Tax Act. The key changes for employees are:
- New tax bands — first ₦800,000 of taxable income is taxed at 0%. Top rate is 25% (was 24%).
- No more Consolidated Relief Allowance (CRA) — the old CRA (₦200,000 + 20% of gross) is abolished.
- Rent relief — a new deduction for actual rent paid, capped at 20% of gross income or ₦500,000, whichever is lower.
- Minimum wage exemption — employees earning ₦840,000 or less per year (approximately ₦70,000/month) pay zero PAYE tax.
- Pension, NHF and NHIS remain deductible as before.
How to Use the Compare Mode
Click "Compare Both" to see your PAYE tax under both the old law and the 2026 new law side by side. Most Nigerian employees earning under ₦5 million annually will pay significantly less tax under the new law due to the ₦800,000 zero-rate band replacing the old CRA system.
Key Deductions Under the New Law
- Pension — 8% of gross salary (employee contribution). Employers also contribute 10% but this does not affect your take-home.
- NHF — National Housing Fund, 2.5% of basic salary. Applies to employees earning ₦3,000+/month.
- NHIS — National Health Insurance Scheme, 5% of basic salary. Required for employers with 10+ employees.
- Rent relief — if you pay rent, this is deductible up to 20% of your gross income, capped at ₦500,000 per year.
Frequently Asked Questions
The Nigeria Tax Act, 2025 was signed by President Bola Tinubu on 26 June 2025. It officially took effect from 1 January 2026. All employers must compute PAYE using the new tax bands from January 2026 payroll onwards. Using the old bands from January 2026 makes payroll non-compliant and exposes employers to penalties under the Nigeria Tax Administration Act.
Employees earning at or below the national minimum wage — currently ₦840,000 per year (₦70,000 per month) — are completely exempt from PAYE tax under the Nigeria Tax Act 2025. Their chargeable income after the ₦800,000 zero-rate band effectively falls to zero or near zero, meaning no tax is deducted. This exemption protects the lowest-paid formal sector workers.
The Nigeria Tax Act 2025 abolished the CRA (which was ₦200,000 or 1% of gross income, plus 20% of gross income). Under the new law, the first ₦800,000 of taxable income is taxed at 0%, which effectively serves as the zero-rate relief. Additionally, a new rent relief deduction is available — actual rent paid, capped at 20% of gross income or ₦500,000, whichever is lower.
First, subtract your allowable deductions from your annual gross income: pension (8% of gross), NHF (2.5% of basic), NHIS (5% of basic) and any qualifying rent paid. The result is your chargeable income. Then apply the progressive bands: 0% on the first ₦800,000, 15% on the next ₦2,200,000, 18% on the next ₦9,000,000, 21% on the next ₦13,000,000, 23% on the next ₦25,000,000, and 25% on anything above ₦50,000,000.
Most employees will pay less. The ₦800,000 zero-rate band is more beneficial than the old CRA for lower and middle income earners. For example, an employee earning ₦3,600,000 annually (₦300,000/month) with standard deductions pays approximately ₦83,000 in PAYE per year under the new law versus ₦167,000 under the old law — a saving of about ₦84,000 per year. Use the Compare Both mode above to see your exact saving.
Yes, for employees of organisations with 15 or more employees. The Pension Reform Act requires 8% employee contribution and 10% employer contribution, with contributions based on gross salary. Voluntary contributions above the mandatory 8% are also deductible for PAYE purposes up to the same percentage. The pension deduction reduces your taxable income and therefore reduces your PAYE tax.