Nigeria’s Tax Act 2025 (in force 1 January 2026) rewrote PAYE: the first ₦800,000 a year is tax-free, then 15%–25% across five bands. Pension (8% of Basic+Housing+Transport) and NHF stay deductible, tenants get rent relief of 20% of rent (capped at ₦500,000) — and if you earn at or below the ₦70,000/month minimum wage, you pay no PAYE at all.
Estimates only — not tax advice. Results are computed from official 2026 tax rules; always verify important decisions with the relevant tax authority.
Step 1 — Enter your monthly gross, plus basic, housing and transport separately — pension is 8% of those three only, so the split matters.
Step 2 — Enter your annual rent. Relief is 20% of rent paid, capped at ₦500,000/year.
Step 3 — Toggle NHF (2.5% of basic) and NHIS (5% of basic) to match what’s actually on your payslip.
Step 4 — The calculator deducts pension/NHF/NHIS plus rent relief, then applies the new bands.
The new annual bands (Nigeria Tax Act 2025) — the old CRA and the 7–24% bands are gone:
| Annual chargeable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 | 15% |
| Next ₹9,000,000 | 18% |
| Next ₦13,000,000 | 21% |
| Next ₦25,000,000 | 23% |
| Above ₦50,000,000 | 25% |
Chargeable income = annual gross − pension − NHF − NHIS − rent relief (20% of actual rent, max ₦500,000) − life-insurance premiums. And a clean new rule: gross of ₦840,000/year or less (₦70,000/month, the minimum wage) is fully exempt from PAYE.
Pension (CPS): 8% employee + 10% employer of Basic+Housing+Transport only — allowances outside those three escape it. NHF: 2.5% of basic (voluntary for private-sector staff since the Business Facilitation Act 2022 — toggle it to match your slip). NHIS/NHIA: typically 5% employee + 10% employer of basic where it’s deducted. ITF and NSITF (1% each) are employer-only.
Example 1 — ₦500,000/month (basic ₩250k, B+H+T ₩400k, rent ₦2.5m/year): pension ₩32,000 + NHF ₩6,250 = ₩38,250/month deductible; rent relief ₦500,000/year. Chargeable = ₦5,041,000 → tax = ₩330,000 + 18% × ₦2,041,000 = ₩697,380/year (₩58,115/month). Net = ₦403,635/month.
Example 2 — ₦200,000/month (B+H+T ₩160k, no rent): pension ₩12,800; chargeable ₦2,246,400 → tax ₩216,960/year (₩18,080/month). Net = ₦169,120/month.
Example 3 — ₦70,000/month (minimum wage): fully exempt → you keep everything except the ₦5,200 pension.
1. Using the old bands. Pre-2026 calculators still show the 7/11/15/19/21/24% bands and CRA — both abolished on 1 January 2026.
2. Pension on gross. It’s 8% of Basic+Housing+Transport only — computing it on gross overstates the deduction.
3. Claiming flat ₦500k rent relief. It’s 20% of actual rent, capped at ₦500,000 — ₦1m rent gives ₦200k relief, not ₦500k.
| Applicable period | Calendar year 2026 (Nigeria Tax Act 2025, from 1 Jan 2026) |
| Based on | Nigeria Tax Act 2025 (gazetted bands); PenCom CPS rates; NHF Act; FIRS guidance |
| Last verified | 24 October 2026 |
| Assumes | Tenant with rent receipts; NHF/NHIS per toggles; standard employee |
| Doesn’t cover | Old pre-2026 bands; business/self-employment income; s10-type exemptions |
Sources: Figures compiled from: FIRS, PenCom.
Spotted an error? Report it — corrections backed by an official source get fixed first.
The Nigeria Tax Act 2025 took effect 1 January 2026: ₦800,000/year tax-free (up from effectively less), the old CRA and 7–24% bands abolished, and new rent relief of 20% of rent (capped ₦500,000).
Yes — the 8% employee pension (on Basic+Housing+Transport) reduces chargeable income, as do NHF and NHIS where deducted.
No — gross of ₦840,000/year (₦70,000/month) or less is fully exempt from PAYE under the new Act.
For private-sector employees it’s effectively voluntary since the Business Facilitation Act 2022 — toggle it to match your payslip.
📖 How salary deductions work in Nigeria — full guide
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