Nigeria PAYE Calculator 2026
This Nigeria PAYE calculator works out your salary tax and take-home pay under the Nigeria Tax Act 2025 — the rules in force from 1 January 2026, with the first ₦800,000 of chargeable income taxed at 0%, a new rent relief of up to ₦500,000, and the old Consolidated Relief Allowance abolished. See your PAYE band by band, and what the same pay would have cost under the old PITA rules.
- Tax-free band
- First ₦800,000 / year
- Bands
- 6 (0% to 25%)
- Rent relief
- Up to ₦500,000
- CRA
- Abolished
Your salary and reliefs
Rent relief applied: ₦0. Tenants deduct 20% of annual rent, capped at ₦500,000 — new under the 2025 Act.
Use this if your payslip shows a different pension amount — by law pension is 8% of basic salary, housing and transport allowances, which is not always 8% of total gross.
National Housing Fund and National Health Insurance contributions are deducted before the tax bands, under both the old and the new law.
New Act vs old PITA — same income
Under the old PITA rules the 1% minimum tax applied at this income, so the old-law figure is 1% of gross income — ₦0.
How this Nigeria PAYE calculator works — band by band
PAYE is worked out on your annual income, then collected monthly by your employer. The calculator annualises your gross salary, takes off the deductions the Act allows — pension, National Housing Fund, National Health Insurance and the new rent relief — then runs what is left, your chargeable income, through the six bands. Each rate applies only to the slice of income inside its band, never to your whole salary.
The 2026 PAYE bands under the Nigeria Tax Act
Fourth Schedule, Nigeria Tax Act 2025 — the rates apply to chargeable income after reliefs and deductions. Your current top band is highlighted.
| Chargeable income (annual) | Tax formula | Rate |
|---|
For comparison, the old PITA bands were 7% on the first ₦300,000, 11% on the next ₦300,000, 15% on the next ₦500,000, 19% on the next ₦500,000, 21% on the next ₦1,600,000 and 24% above ₦3,200,000 — applied after the Consolidated Relief Allowance, which the new Act abolished.
What changed in 2026 — CRA abolished, rent relief added
A new Act, not a rate tweak. The Nigeria Tax Act 2025 was signed on 26 June 2025 and took effect on 1 January 2026, replacing the Personal Income Tax Act (PITA) that had set PAYE rules for decades. Employers still deduct PAYE every month and remit it to the internal revenue service of the state where you work — but everything about the calculation underneath changed.
The CRA is gone. Under PITA, every employee first received a Consolidated Relief Allowance of ₦200,000 plus 20% of gross income, and tax then started at 7% from the first taxable naira. From 2026 there is no CRA at all. Instead, the first ₦800,000 of chargeable income is taxed at 0% — a simpler flat tax-free band that is worth most to lower earners.
Rent relief is new. Tenants can now deduct 20% of the rent they pay each year, capped at ₦500,000, before the bands are applied. It is the first Nigerian personal relief tied to an actual household cost: pay ₦2,500,000 a year in rent and you claim the full ₦500,000 deduction; pay ₦1,200,000 and you claim ₦240,000.
Minimum wage earners pay nothing, and the top rate rose. Anyone earning ₦840,000 a year or less — ₦70,000 a month, the national minimum wage — is fully exempt from PAYE under the Act, even though ₦840,000 sits above the ₦800,000 zero band. At the other end, the top rate increased from 24% to 25%, but it only bites on chargeable income above ₦50,000,000 a year.
Worked examples — 2026 PAYE in practice
₦300,000 a month, no rent relief. Gross is ₦3,600,000 a year. The auto pension deduction is ₦288,000 (8%), leaving chargeable income of ₦3,312,000. Tax is ₦0 on the first ₦800,000, ₦330,000 on the next ₦2,200,000 at 15%, and ₦56,160 on the last ₦312,000 at 18% — total PAYE of ₦386,160 a year (₦32,180 a month), and take-home pay of ₦243,820 a month. Under the old PITA rules the same salary paid ₦390,320, so the new Act saves ₦4,160 a year here.
₦1,000,000 a month, renting at ₦2,400,000 a year. Gross is ₦12,000,000. Pension takes ₦960,000 and rent relief takes ₦480,000 (20% of the rent), leaving ₦10,560,000 chargeable. PAYE comes to ₦1,690,800 a year (₦140,900 a month) and take-home pay is ₦779,100 a month. Under PITA, with its CRA of ₦2,600,000 but no rent relief, the tax was ₦1,817,600 — the new Act saves ₦126,800 a year, about ₦10,567 a month.
₦70,000 a month, the minimum wage. Gross is ₦840,000 a year, which the Act exempts completely: PAYE is ₦0. Without the exemption, the ₦40,000 above the zero band would have been taxed at 15% even after pension — the exemption is what keeps minimum-wage pay fully tax-free.
How we calculate — method and sources
This Nigeria PAYE calculator follows the Nigeria Tax Act 2025 step by step:
- Annualise. Monthly gross salary is multiplied by 12, because PAYE bands are annual.
- Deduct what the Act allows. Pension contributions (the statutory 8% employee rate as an auto estimate, or your own figure), National Housing Fund contributions, National Health Insurance contributions, and rent relief of 20% of annual rent capped at ₦500,000.
- Apply the minimum-wage exemption. If gross pay is ₦840,000 a year or less, PAYE is zero.
- Run the bands. The remaining chargeable income passes through the six Fourth Schedule bands; monthly PAYE is the annual figure divided by 12.
- Compare with the old law. The PITA comparison applies the CRA of ₦200,000 plus 20% of gross, the old 7% to 24% bands, and the 1% minimum tax where it used to bite. Rent relief did not exist under PITA, so it is excluded from the old-law figure.
The rates, the ₦800,000 zero band, the rent relief and the minimum-wage exemption are taken from the Nigeria Tax Act 2025 — signed 26 June 2025 and in force from 1 January 2026 — and cross-checked against the payroll guidance listed in the sources below. Figures were verified on 22 October 2026.
Nigeria PAYE calculator — common questions
How is PAYE calculated in Nigeria in 2026?
Your employer annualises your gross salary, subtracts pension, National Housing Fund and National Health Insurance contributions and the new rent relief, then applies the Nigeria Tax Act bands to what is left: 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% above ₦50,000,000. The annual tax is divided by 12 and withheld monthly. The band-by-band breakdown above shows your own numbers.
What is the tax-free threshold in Nigeria in 2026?
The first ₦800,000 of chargeable income is taxed at 0%. On top of that, anyone whose gross pay is ₦840,000 a year or less (₦70,000 a month, the national minimum wage) is fully exempt from PAYE under the Nigeria Tax Act 2025.
Is the Consolidated Relief Allowance (CRA) still available in 2026?
No. The Consolidated Relief Allowance — ₦200,000 plus 20% of gross income under the old PITA rules — was abolished from 1 January 2026. It is replaced by the ₦800,000 zero-rate band and the new rent relief. Any calculator still subtracting a CRA in 2026 is using the old law.
How does the new rent relief work?
If you rent your home, you can deduct 20% of the rent you pay in a year from your income before tax, up to a maximum of ₦500,000. Rent of ₦1,200,000 a year gives a ₦240,000 deduction; rent of ₦2,500,000 a year or more gives the full ₦500,000 cap. Enter your annual rent in the calculator and the relief is applied automatically.
How much tax do I pay on a ₦300,000 monthly salary in 2026?
With the standard 8% pension deducted and no rent relief, a ₦300,000 monthly salary (₦3,600,000 a year) has chargeable income of ₦3,312,000 and PAYE of ₦386,160 a year — ₦32,180 a month. Take-home pay is ₦243,820 a month after tax and pension. Try it in the calculator above.
When did the new Nigeria PAYE rates start?
The Nigeria Tax Act 2025 was signed on 26 June 2025 and took effect on 1 January 2026, replacing the Personal Income Tax Act (PITA). Employers apply the new bands through PAYE from January 2026 payrolls; income earned in 2025 and earlier stays under the old PITA rules.
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