How Much Tax Will You Pay in Nigeria?
Tax-free band
of chargeable income, at 0%
Top rate
above ₦50,000,000
Rent relief
of annual rent, capped at ₦500,000
Exempt below
a month — the national minimum wage
Relief is 20% of what you pay, capped at ₦500,000. Enter 0 if you own your home.
Take-home, a month
₦399,200
Tax, a month
₦60,800
Effective rate
12.16%
Marginal band 18%
Gross to net, step by step
- Gross income₦500,000
- Less pension (8%)s.30(2)(a)(iii)−₦40,000
- Less rent reliefs.30(2)(a)(vi)−₦25,000
- Chargeable income₦435,000
- ₦800,000 at 0%—
- ₦2,200,000 at 15%₦27,500
- ₦2,220,000 at 18%₦33,300
- Total tax₦60,800
- Take-home₦399,200
The 2026 bands
| Band | Chargeable income | Width | Rate | Tax on a full band |
|---|---|---|---|---|
| 1 | ₦0 – ₦800,000 | ₦800,000 | 0% | ₦0 |
| 2 | ₦800,001 – ₦3,000,000 | ₦2,200,000 | 15% | ₦330,000 |
| 3 | ₦3,000,001 – ₦12,000,000 | ₦9,000,000 | 18% | ₦1,620,000 |
| 4 | ₦12,000,001 – ₦25,000,000 | ₦13,000,000 | 21% | ₦2,730,000 |
| 5 | ₦25,000,001 – ₦50,000,000 | ₦25,000,000 | 23% | ₦5,750,000 |
| 6 | Above ₦50,000,000 | unbounded | 25% | — |
Nigeria Tax Act 2025, Fourth Schedule (s.58(1)). In force from 2026-01-01. Stored in the database with the section that authorises it, so a Finance Act changing a rate is a data update rather than a code change — and nothing on this page can quietly disagree with the table.
What changed on 1 January
The Nigeria Tax Act 2025 was gazetted on 26 June 2025 and took effect on 1 January 2026. It did not adjust the old rules. It replaced the structure they were built on, which is why so many calculators still online are not slightly out of date but computing under a regime that no longer exists.
Three changes matter for a salary.
The Consolidated Relief Allowance is gone. For years, the first step of any Nigerian PAYE computation was CRA — the higher of ₦200,000 or 1% of gross, plus 20% of gross, deducted before the bands were applied. It was the single largest relief most employees received, and it applied to everyone regardless of circumstance. Search the Act for it and you will not find it: the phrase appears nowhere in the 212 pages of the gazette. Section 30 sets out the eligible deductions exhaustively, and CRA is not among them. Any calculator that still subtracts 20% of your gross before taxing you is understating your bill, often substantially.
The tax-free band went from ₦300,000 to ₦800,000. The Fourth Schedule now charges the first ₦800,000 of chargeable income at nought per cent. That is not a relief you claim; it is simply the bottom of the rate table, and it does most of the work that the old minimum-tax rule and part of CRA used to do.
And rent relief arrived. Twenty per cent of the rent you actually pay, capped at ₦500,000, deducted before the bands apply. It is the closest thing the new Act has to a replacement for CRA, and it is also the narrowest: it is for tenants. If you own the home you live in, you do not get it — though you may deduct interest on a loan for developing that home instead.
The net effect depends almost entirely on where you sit. Low earners are better off: a bigger zero-rate band and, at the bottom, a clean exemption. Middle and higher earners who rent may be roughly level, because rent relief partly offsets losing CRA. Higher earners who own their homes generally pay more, because they lost a large universal relief and gained nothing in its place.
That is the reform in one line: a broad allowance everybody got has been replaced by a narrow one that only tenants get, and the zero-rate band was widened to cushion the bottom.
— abuja.cool desk
Rent relief, which almost nobody models
Worked: on a ₦6,000,000 salary paying ₦1,500,000 rent, the relief is ₦300,000 — which saves ₦54,000 of tax, not ₦300,000. The cap binds at an annual rent of ₦2,500,000.
Not sure what to enter as your rent? We publish what Abuja districts are asking — a typical two-bedroom asks ₦5,250,000, which earns ₦500,000 of relief. Enter the rent you actually pay, not the district figure.
Section 30(2)(a)(vi) is nine lines long and it is the most consequential thing in the Act for an ordinary salaried tenant. It allows a deduction of "rent relief of 20% of annual rent paid, subject to a maximum of N500,000, whichever is lower".
Read the arithmetic off that sentence. Twenty per cent of your annual rent, unless that exceeds ₦500,000, in which case ₦500,000. The cap binds at an annual rent of ₦2,500,000 — pay more than that and the extra rent earns you nothing further. In Abuja, where a two-bedroom flat in a central district can clear that comfortably while one in a satellite town will not, the cap is a live constraint for a lot of people rather than a theoretical ceiling.
What it is worth to you is not the relief itself but the relief multiplied by your marginal rate. A tenant paying ₦1,500,000 a year gets a ₦300,000 deduction; if their marginal band is 18%, that is ₦54,000 less tax. The same deduction to someone in the 23% band is worth ₦69,000. It reduces the income you are taxed on, not the tax you pay — a distinction worth holding on to, because every "save ₦500,000 on tax" post you will see about this is wrong by roughly a factor of four.
Three conditions attach, and they are the part most coverage skips. You must declare the rent you actually paid, accurately — the Act makes the relief conditional on it. The Joint Revenue Board's guidance of 7 April 2026 adds that joint tenants may claim only the portion each actually bore, and that rent spanning two years of assessment is pro-rated between them rather than claimed in full in one.
And it is for tenants. Owner-occupiers get nothing here. They may instead deduct interest on a loan taken to develop the residence, under s.30(2)(a)(iv) — a narrower provision that does nothing at all for someone who owns outright.
— abuja.cool desk
Three things the Act does not say
Each of these is widely repeated and each is, on the text of the gazette, not quite right. We read the Act rather than the coverage, and where they differ this is what we found and what we did about it.
The exemption is the minimum wage, not ₦70,000
Commonly saidIt is widely written that employees earning ₦70,000 a month or less are exempt from PAYE, as though ₦70,000 were the statutory figure.
What the text saysThe Act names no amount. Exemption (t) covers "income of a person from an employment where such person earns gross income of national minimum wage or less from such employment". The ₦70,000 comes from the National Minimum Wage Act 2024, which is a different statute on a three-year review cycle — and the Federal Government signalled a review in June 2026.
What this page doesWe store the threshold as the minimum wage, cite both statutes separately, and will move it the moment the wage moves. The number on this page is ₦70,000 today because that is what the wage is today, not because the Tax Act says so.
Nigeria Tax Act 2025, exemption (t) · read the gazette
There are two filing deadlines, and only one is in the Act
Commonly saidCoverage of the new regime generally gives a single filing deadline of 31 March.
What the text saysThe phrase "31 March" does not appear anywhere in the Nigeria Tax Administration Act 2025. What the Act does state, at s.14(1), is that an EMPLOYER must file its annual return of all emoluments "not later than 31st January of each year". Section 14(3) then says the employee must still file their own annual return under s.13, and s.13 requires a return "in each year of assessment" without restating a date. The 31 March date for individual returns is long-standing Nigerian practice carried forward from the previous regime, and it is what tax authorities and practitioners are working to.
What this page doesWe give both dates and say which one is written in the Act. If your only income is a salary your employer has already been deducting from, the 31 March individual return still applies to you — s.14(3) is explicit that PAYE does not discharge it.
Nigeria Tax Administration Act 2025, ss.13 and 14 · read the gazette
Government bonds are exempt. Treasury bills are not bonds.
Commonly saidThe new regime is often summarised as taxing Treasury Bills at 10%, or alternatively as leaving government securities exempt.
What the text saysThe Act's exemption list includes, at (n), "income earned from bonds issued by a State or the Federal Government of Nigeria". Treasury bills are short-dated discount instruments, not bonds, and they are not in that list. The Act itself sets no 10% rate for them; deduction-at-source rates sit in the Tax Administration Act and in regulations made under it.
What this page doesThis page states what the Act exempts and does not model investment income at all — it is a salary calculator. The Treasury-bill position is worked properly in the Stage 8 NTB tool, against the deduction-at-source regulations rather than against summaries of them.
Nigeria Tax Act 2025, exemption (n) · read the gazette
The tax floor and the food floor do not meet
Exempt below
₦70,000
a month, Tax Act
A month’s food
₦129,432
North Central zone, NBS
The Act exempts anyone earning the national minimum wage or less. That is ₦70,000 a month, ₦840,000 a year, and it is a real piece of relief: below that line there is no PAYE at all, not a reduced rate but nothing.
Set it beside the other number this site tracks. A defined monthly food shop for a household of five, priced at the North Central zone averages the Federal Capital sits inside, runs at about ₦129,000 a month. Food alone. The exempt threshold is a little over half of it.
Those two figures come from different statutes and different agencies and were never designed to be read together, which is precisely why it is worth reading them together. The tax system has decided that at ₦70,000 a month you have too little to contribute. The food data says that at ₦70,000 a month you cannot feed a household. Both are official positions of the Nigerian state, arrived at separately, and they do not meet in the middle. They do not meet at all.
None of that is an argument about what the rate should be, and this page will not make one. It is an observation about what the numbers say when you put them next to each other — which is the whole reason a site like this holds more than one series.
Worth adding: the exemption is pinned to the minimum wage, not to a figure written into the Tax Act. The Federal Government signalled a review of the ₦70,000 wage in June 2026, acknowledging it no longer meets the cost of living. If that review lands, the exempt threshold moves with it on the same day — and so does the affordability line on our prices page. Two of this site's numbers are wired to the same statute, and most readers have no reason to know it.
— abuja.cool desk
Check our working
A calculator you cannot check is a calculator you have to trust. Here is ours, tested against cases computed by hand from the schedule.
| Case | Gross | Rent | Chargeable | Tax, by hand | Tax, computed | Match |
|---|---|---|---|---|---|---|
| At the minimum wage — exemptThe exemption is tested on gross, before deductions. ₦70,000 a month is exactly the national minimum wage, so no PAYE arises at all. | ₦840,000 | — | ₦772,800 | exempt | exempt | ✓ |
| ₦1.2m — just into the 15% bandChargeable income clears ₦800,000, so the second band bites on the excess only. Tests that the zero-rate band is not applied to the whole income. | ₦1,200,000 | — | ₦1,104,000 | ₦45,600 | ₦45,600 | ✓ |
| ₦6m, no rent reliefA mid-range salary spanning three bands, with no rent claimed — the baseline for the pair below. | ₦6,000,000 | — | ₦5,520,000 | ₦783,600 | ₦783,600 | ✓ |
| ₦6m with ₦1.5m rent — relief under the capThe same salary as above with rent claimed. 20% of ₦1.5m is ₦300,000, below the cap, and the tax saved is that deduction at the 18% marginal rate — ₦54,000, not ₦300,000. | ₦6,000,000 | ₦1,500,000 | ₦5,220,000 | ₦729,600 | ₦729,600 | ✓ |
| ₦12m with ₦4m rent — the cap binds20% of ₦4m is ₦800,000, so the ₦500,000 cap withholds ₦300,000 of relief. Tests the cap rather than the percentage. | ₦12,000,000 | ₦4,000,000 | ₦10,540,000 | ₦1,687,200 | ₦1,687,200 | ✓ |
| ₦60m — into the 25% bandEvery band exercised, including the unbounded top one. Longhand working is in the comment above this table. | ₦60,000,000 | ₦10,000,000 | ₦54,700,000 | ₦11,605,000 | ₦11,605,000 | ✓ |
All worked examples reproduce exactly. These same cases run as a gate in the build — if any of them stopped matching, this vertical would not ship.
Filing: two dates, and only one is in the Act
The Nigeria Tax Administration Act 2025 says at section 14(1) that your employer must file its annual return of all emoluments by 31 January. That date is written into the statute.
Section 14(3) then says something a lot of salaried people are surprised by: you still have to file your own return. PAYE deducted by your employer does not discharge the obligation. Section 13 requires a return from every taxable person in each year of assessment, whether or not tax is owed — and the deadline everyone works to for that is 31 March, carried over from the previous regime. That date does not appear anywhere in the Administration Act; we checked the full text.
Penalties for failure to file sit in Chapter Four of the Administration Act at section 101 and escalate monthly. We are not printing naira amounts for them, because the figures in circulation could not be confirmed against the gazette text we hold — and a penalty figure is exactly the sort of number that should not be guessed at.
Common questions
How much tax will I pay on ₦500,000 a month?
On ₦500,000 a month with an 8% pension and no rent claimed: chargeable income ₦5,520,000, tax ₦783,600 a year — roughly ₦65,300 a month, an effective rate of 13.06% on gross. Put your own figures into the calculator at the top; claiming rent will reduce it.
What is the tax-free threshold?
The first ₦800,000 of chargeable income is taxed at 0%. Chargeable income is gross less pension, rent relief and the other section 30 deductions — so a salary somewhat above that figure can still fall entirely inside the zero band. The old threshold was ₦300,000.
What is rent relief and how much is it worth?
A deduction of 20% of the rent you actually pay, capped at ₦500,000. It reduces the income you are taxed on, not the tax itself — the full cap is worth about ₦90,000 to someone in the 18% band, not ₦500,000. The cap binds at an annual rent of ₦2,500,000. Tenants only.
Is the Consolidated Relief Allowance still available?
No. The phrase “consolidated relief” appears nowhere in the 212 pages of the gazetted Act, and section 30 lists the eligible deductions exhaustively without it. It was the largest relief most employees had, so a calculator still subtracting 20% of gross before the bands will understate your bill — often by a lot. That is the single biggest reason this page exists.
Am I exempt from PAYE?
If your gross employment income is at or below the national minimum wage — currently ₦70,000 a month — it is exempt. Worth knowing: the Act names no naira figure, it points at the minimum wage, so the threshold moves whenever the wage does. And it is tested on gross, before any deduction.
How is this different from the old PAYE rules?
Structurally, not marginally: CRA abolished, the zero-rate band up from ₦300,000 to ₦800,000, rent relief introduced for tenants, and the rate table rewritten into six bands to 25%. Low earners are better off; tenants on middle incomes roughly level; higher earners who own their homes generally worse off, having lost a universal relief and gained nothing in its place.
When do I file?
Two dates. Your employer files by 31 January — section 14(1), written into the Act. You still file your own return, because section 14(3) says PAYE does not discharge it, and the date worked to is 31 March — carried over from the previous regime rather than stated in the Administration Act, which we checked in full.
Are Treasury Bills taxed now?
The Act exempts “income earned from bonds issued by a State or the Federal Government of Nigeria”. Treasury bills are short-dated discount instruments, not bonds, and are not in that list. But the Act sets no rate for them either — deduction-at-source rates sit in the Administration Act and its regulations. This page is a salary calculator and does not model investment income, so rather than repeat a figure we have not verified, we are leaving it to a tool built against those regulations.
Methodology and sources
Every band, relief and threshold on this page is read from the Nigeria Tax Act 2025 as gazetted — Act No. 7, Federal Republic of Nigeria Official Gazette No. 117, Volume 112, 26 June 2025, pages A385 to A597 — and not from commentary about it. The rates are the Fourth Schedule under section 58(1); the deductions are section 30(2)(a); the exemption is item (t) of the exemption list. Administration provisions cite the Nigeria Tax Administration Act 2025, Act No. 5 of the same gazette.
That distinction earned its keep on build day. The file published as "Nigeria-Tax-Act-2025.pdf" on one government portal is in fact the Tax Administration Act, a different statute with different contents; had we trusted the filename we would have cited the wrong law. And three claims we were asked to implement turned out not to say what they are widely reported to say — each is set out in full on this page rather than quietly resolved.
The bands, reliefs and constants are stored in the database with the section that authorises them, the date they took effect and a link to the gazette. A Finance Act changing a rate is a data update, not a code change, and nothing on this page can drift from what the table says because there are no tax figures written into the page itself.
Two things this calculator models by assumption rather than by statute, both flagged where they appear. The Act makes contributions under the Pension Reform Act deductible but sets no rate; the 8% employee minimum comes from that Act and is calculated there on monthly emoluments — basic, housing and transport — rather than on total gross. Employers split salaries differently, so we default to 8% of gross and let you change it. And we model the reliefs a salaried employee ordinarily has: pension and rent. National Housing Fund and National Health Insurance contributions, life assurance premiums and owner-occupier loan interest are all eligible deductions under the same section, and if they apply to you your bill is lower than this page shows.
The engine is checked against worked examples computed by hand from the schedule before anything ships. They are published on this page.
- Rates: Nigeria Tax Act 2025, Fourth Schedule (s.58(1))
- Pension contribution: Nigeria Tax Act 2025, s.30(2)(a)(iii)
- Rent relief: Nigeria Tax Act 2025, s.30(2)(a)(vi)
- Exemption: Nigeria Tax Act 2025, exemption (t) · amount from the National Minimum Wage Act 2024
Read next
food prices
What the exempt threshold buys
The tax floor is ₦70,000 a month. A month's food is nearly twice it.
Read →exchange rate
What your salary is worth in dollars
Official and parallel, side by side, with the spread stated.
Read →rent
The number relief is calculated from
Asking rents by district. A typical two-bedroom asks ₦5,250,000 — enough to earn ₦500,000 of relief.
Read →