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PAYE Calculator Nigeria 2026
Work out your income tax and monthly take-home pay under the new Nigeria Tax Act 2025, in effect from 1 January 2026.
How PAYE is calculated in 2026
From 1 January 2026, the Nigeria Tax Act 2025 replaced the old Personal Income Tax Act rules for employees. The biggest changes are:
- The first ₦800,000 a year is tax-free. Anyone earning ₦800,000 or less per year pays no PAYE.
- The Consolidated Relief Allowance (CRA) is gone. It used to be ₦200,000 + 20% of gross income.
- A new rent relief lets you deduct 20% of the annual rent you pay, up to a maximum of ₦500,000.
- Pension (8%), NHF, NHIS, life assurance premiums and mortgage interest on an owner-occupied home remain deductible.
2026 personal income tax bands
| Annual taxable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 (₦800,001 – ₦3,000,000) | 15% |
| Next ₦9,000,000 (₦3,000,001 – ₦12,000,000) | 18% |
| Next ₦13,000,000 (₦12,000,001 – ₦25,000,000) | 21% |
| Next ₦25,000,000 (₦25,000,001 – ₦50,000,000) | 23% |
| Above ₦50,000,000 | 25% |
Worked example
Ada earns ₦500,000 a month (₦6,000,000 a year) and pays ₦1,500,000 rent. Pension is 8% × ₦6,000,000 = ₦480,000. Rent relief is 20% × ₦1,500,000 = ₦300,000. Taxable income = ₦6,000,000 − ₦480,000 − ₦300,000 = ₦5,220,000. Tax = 0 on the first ₦800,000 + 15% of ₦2,200,000 (₦330,000) + 18% of ₦2,220,000 (₦399,600) = ₦729,600 a year, or ₦60,800 a month.
This calculator gives an estimate for salaried employees. Your employer's payroll may treat some allowances differently. Rent relief is only allowed if you declare the rent to your state tax authority.
Frequently asked questions
Who pays no PAYE in 2026?
Under the Nigeria Tax Act 2025, the first ₦800,000 of annual taxable income is taxed at 0%, so employees whose taxable income is ₦800,000 a year or less pay no PAYE.
Is the Consolidated Relief Allowance still allowed?
No. The CRA (₦200,000 plus 20% of gross income) was abolished from 2026 and replaced by a rent relief of 20% of annual rent paid, capped at ₦500,000.
How much is rent relief?
20% of the annual rent you actually pay for your home, up to a maximum of ₦500,000 a year, provided the rent is declared to your tax authority.
Is pension deducted before tax?
Yes. Your contribution under the Pension Reform Act (normally 8% of basic, housing and transport allowances) is deducted before tax is calculated.