Free PAYE Calculator Nigeria (2026 Tax Bands)
Your payslip changed in January 2026 and most online calculators haven't caught up. This PAYE calculator uses the new Nigeria Tax Act bands - the ₦800,000 tax-free allowance, rent relief, and the 15% to 25% brackets - to show your real monthly tax and take-home pay.
PAYE in Nigeria (2026): after deducting pension, NHF, NHIS, life insurance, and rent relief (20% of annual rent, max ₦500,000), the first ₦800,000 of income is tax-free; the rest is taxed at 15%, 18%, 21%, 23%, and 25% as income rises. Employers deduct it monthly.
Strictly, the 8% applies to basic + housing + transport. If those are much less than your gross, lower this percentage to match your actual payslip deduction.
Take-home = gross minus PAYE, pension, NHF, and NHIS. Rent relief and insurance reduce your tax but are paid outside the payslip.
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The 2026 PAYE tax bands
The Nigeria Tax Act 2025, in force since 1 January 2026, replaced the old 7%-24% brackets with six bands applied to your chargeable income - what's left of your gross pay after reliefs. Rates are published by the PwC Nigeria tax summary and administered by the Nigeria Revenue Service (formerly FIRS) and the state internal revenue services.
| Chargeable income (annual) | Rate | Covers |
|---|---|---|
| First ₦800,000 | 0% | Tax-free for everyone |
| ₦800,001 - ₦3,000,000 | 15% | Next ₦2.2m |
| ₦3,000,001 - ₦12,000,000 | 18% | Next ₦9m |
| ₦12,000,001 - ₦25,000,000 | 21% | Next ₦13m |
| ₦25,000,001 - ₦50,000,000 | 23% | Next ₦25m |
| Above ₦50,000,000 | 25% | Top rate |
A worked example: ₦300,000 a month
Take someone on ₦300,000 a month (₦3.6m a year) who contributes the 8% pension (₦288,000) and pays ₦600,000 rent, which earns a ₦120,000 rent relief. Chargeable income: ₦3,600,000 − ₦288,000 − ₦120,000 = ₦3,192,000.
- First ₦800,000 at 0% = ₦0
- Next ₦2,200,000 at 15% = ₦330,000
- Remaining ₦192,000 at 18% = ₦34,560
Annual PAYE is ₦364,560 - about ₦30,380 a month, an effective rate of 10.1% of gross. Take-home after tax and pension: roughly ₦245,620 a month. Under the old CRA rules the same person paid about ₦390,000 a year, so the reform saves them around ₦26,000 - modest at this level. The big winners are lower earners; the big losers are those above roughly ₦2m a month, whose top slices now hit 23-25%.
Reliefs that reduce your PAYE
Each of these comes off your gross income before the bands apply - claim what you're entitled to, because your employer can only apply what you've told them about:
- Pension - your statutory contribution (minimum 8% of basic + housing + transport) is fully deductible.
- Rent relief - new in 2026: 20% of the annual rent you pay, capped at ₦500,000. You'll need evidence of the rent, so keep your tenancy agreement and receipts.
- NHF - 2.5% of salary if you contribute to the National Housing Fund.
- NHIS - health insurance contributions are deductible under the new Act.
- Life insurance - premiums you paid on a policy for yourself or your spouse.
Nigeria PAYE FAQ
How is PAYE calculated in Nigeria in 2026?
Start from your gross annual income, subtract your reliefs (pension, NHF, NHIS, life insurance premiums, and rent relief of 20% of annual rent capped at ₦500,000) to get chargeable income, then apply the bands: the first ₦800,000 is tax-free, then 15% up to ₦3m, 18% up to ₦12m, 21% up to ₦25m, 23% up to ₦50m, and 25% above that. Your employer divides the annual figure by 12 and deducts it monthly.
Who pays no PAYE under the new law?
Anyone earning the national minimum wage or less is exempt, and anyone whose chargeable income (after reliefs) is ₦800,000 or less per year falls entirely inside the tax-free band. Under the old law, tax started from the first naira after reliefs at 7% - so low earners are the biggest winners of the 2026 reform.
What happened to the Consolidated Relief Allowance (CRA)?
It was scrapped. The Nigeria Tax Act 2025 removed the CRA (₦200,000 + 20% of gross income) and replaced it with the ₦800,000 tax-free band plus a rent relief of 20% of the annual rent you actually pay, capped at ₦500,000. If you don't pay rent, you don't get rent relief - homeowners simply rely on the tax-free band.
Are bonuses and 13th month pay taxed?
Yes. PAYE applies to your total employment income - salary, bonuses, 13th month, and most allowances. Benefits like employer pension contributions are not taxed in your hands, and your own pension, NHF, and NHIS contributions are deducted before tax is worked out.
Who remits PAYE, and when?
Your employer deducts PAYE from each salary and must remit it to the internal revenue service of the state where you live by the 10th day of the following month. As an employee you don't file monthly - but check your payslip, because the deduction is your money.
How is this different from a Growpins Ledger account?
This calculator estimates one salary at a time. Growpins Ledger is for the business side: it creates invoices and receipts with VAT and withholding tax calculated automatically, tracks expenses, and keeps the books your accountant will ask for at year end. The free tier needs no card.
Run a business as well as a salary?
Growpins Ledger handles the business side of Nigerian tax: invoices and receipts with VAT and WHT calculated automatically, expense tracking, and clean books for your accountant - built by the team behind Growpins, founded by Dokun Bamigboye.
Get Started FreeCharging clients VAT too? Use the Nigeria VAT Calculator, or browse all free tools.
This page is general information, not tax advice. PAYE is administered by your state internal revenue service; figures assume the standard Nigeria Tax Act 2025 rules and your actual assessment may differ.