Nigeria PAYE for 2026 under the new Tax Act: pension, NHF, rent relief and net pay
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 17 Oct 2026.Under the Nigeria Tax Act 2025, from 1 January 2026, the first ₦800,000 of chargeable income a year is taxed at 0%, then 15%, 18%, 21%, 23% and 25% above ₦50 million. Pension, NHF and rent relief come off first. ₦500,000 a month pays ₦65,300 PAYE a month.
2026 · Rates and rules read from the sources listed on this page (the earliest on 17 Oct 2026); they may have changed since.
Choose monthly or yearly pay and type your gross pay.
Leave pension on at 8%, or type basic, housing and transport pay if the pension is worked on those only.
Switch NHF on and type your basic salary if your employer deducts it.
Type the rent you pay in a year for the rent relief, and any other eligible deductions.
Read the monthly PAYE, your take-home pay and the tax in each band.
This calculator works out the PAYE an employer deducts in Nigeria from 1 January 2026, under the Nigeria Tax Act 2025 as published in the Official Gazette, together with the employee's pension and National Housing Fund contributions.
Step 1: deductions. Section 30 takes these off total income: your pension contribution (8% of basic, housing and transport pay), NHF (2.5% of basic salary), NHIS, life insurance premiums, mortgage interest on your own home, and rent relief.
Rent relief. The old consolidated relief allowance is gone. In its place, 20% of the rent you pay in a year comes off, up to ₦500,000. Rent of ₦1,200,000 gives ₦240,000.
Step 2: the bands. What is left, the chargeable income, is taxed in six bands:
| Chargeable income a year | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 (to ₦3m) | 15% |
| Next ₦9,000,000 (to ₦12m) | 18% |
| Next ₦13,000,000 (to ₦25m) | 21% |
| Next ₦25,000,000 (to ₦50m) | 23% |
| Above ₦50,000,000 | 25% |
A worked example. On ₦500,000 a month, ₦6,000,000 a year: pension is ₦480,000, so chargeable income is ₦5,520,000. Tax is ₦330,000 on the 15% band plus ₦453,600 on the 18% band, ₦783,600 a year or ₦65,300 a month. Take-home pay is ₦394,700 a month.
Minimum wage. A person earning the national minimum wage or less from an employment is exempt.
Not included. Benefits in kind, voluntary pension above 8%, and the yearly return.
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Take your yearly gross pay, subtract pension, NHF, NHIS and rent relief, then tax the rest: 0% on the first ₦800,000, 15% on the next ₦2.2 million, 18% on the next ₦9 million and so on. ₦500,000 a month with pension only pays ₦65,300 a month.
The Fourth Schedule of the Nigeria Tax Act 2025 taxes the first ₦800,000 at 0%, the next ₦2.2 million at 15%, the next ₦9 million at 18%, the next ₦13 million at 21%, the next ₦25 million at 23% and everything above ₦50 million at 25%.
Section 30 lets you deduct 20% of the rent you pay in a year, up to ₦500,000, as long as you declare the actual rent paid. Rent of ₦1.2 million gives ₦240,000 of relief; any rent of ₦2.5 million or more gives the full ₦500,000.
Yes. From 1 January 2026, the first ₦800,000 of chargeable income each year is taxed at 0%. Chargeable income is what remains after pension, NHF, NHIS, rent relief and other allowed deductions, so gross pay can be well above ₦800,000 before any tax is due.
Under the Pension Reform Act 2014 the employee pays at least 8% of basic, housing and transport pay and the employer at least 10%. The National Housing Fund Act takes 2.5% of basic monthly salary. Both are deducted before PAYE is worked out.
The deductions listed in section 30 of the Nigeria Tax Act 2025 no longer include a consolidated relief allowance. Instead, the first ₦800,000 of chargeable income is taxed at 0%, and people who rent get a separate relief of 20% of rent paid, capped at ₦500,000 a year.
Rates and rules change; check the source before you rely on a figure.
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