Nigerian PAYE Calculator
Calculate your net salary after tax under the Nigeria Tax Act 2025
How It Works
Enter your basic salary and allowances
Add any annual rent expenses
Choose pension and NHF options
View your calculated net salary instantly
New Tax Rules Effective 2026
This calculator uses the Nigeria Tax Act 2025 rates. Income up to ₦800,000 is now tax-exempt. Consolidated Relief Allowance (CRA) has been replaced with Rent Relief.
Enter Your Details
Rent Relief: min(₦500,000, 20% of rent paid)
National Housing Fund (2.5%)
Your Salary Breakdown
Gross Monthly
₦0
₦0 /year
Net Monthly (Take Home)
₦0
₦0 /year
Tax Bands (2026)
Your chargeable income is below ₦800,000. You are exempt from PAYE tax.
Employer Remittance Deadline
Employers must remit PAYE by the 10th of the following month. This calculator provides estimates. Consult a tax professional or the FIRS for exact calculations.
Nigerian PAYE Tax Calculator
Calculate your net salary with the new 2026 Nigeria Tax Act rates. Includes pension, NHF, and rent relief calculations.
2026 Tax Rates
New progressive tax bands from 0% to 25%.
Rent Relief
New tax relief up to ₦500,000 for renters.
₦800k Exemption
Income up to ₦800,000 is now tax-free.
1Nigeria's New Tax System (2025 Act)
The Nigeria Tax Act 2025, signed in June 2025 and effective from January 2026, introduced significant changes to personal income tax. The new progressive system provides complete tax exemption for low earners.
Employees earning up to ₦800,000 annually now pay zero tax. This is a major improvement for minimum wage workers in Nigeria.
22026 Tax Bands
| Income Bracket | Tax Rate |
|---|---|
| ₦0 - ₦800,000 | 0% |
| ₦800,001 - ₦3,000,000 | 15% |
| ₦3,000,001 - ₦12,000,000 | 18% |
| ₦12,000,001 - ₦25,000,000 | 21% |
| ₦25,000,001 - ₦50,000,000 | 23% |
| Above ₦50,000,000 | 25% |
3Rent Relief Explained
The old Consolidated Relief Allowance (CRA) has been replaced with Rent Relief. If you pay rent, you can claim:
Lesser of ₦500,000 OR 20% of annual rent paid
You will need proof of tenancy agreement or rent receipts to claim this relief.
4Deductions
Pension
8% of qualifying emoluments
NHF (Optional)
2.5% of basic salary
Nigerian PAYE Calculator 2026: Complete Guide
Everything you need to know about calculating your monthly PAYE tax under the new Nigeria Tax Act 2025 — including LIRS rules, rent relief, deductions, and worked examples.
What is PAYE in Nigeria?
PAYE — Pay As You Earn — is the system by which employers deduct personal income tax directly from employees' salaries each month and remit the amounts to state revenue authorities such as the Lagos Internal Revenue Service (LIRS). Updated for 2026 under the Nigeria Tax Act 2025, the system now features a ₦800,000 annual tax-free threshold, progressive rates up to 25%, and a new rent relief deduction replacing the old Consolidated Relief Allowance (CRA).
The new law simplifies tax deductions significantly. Low earners — those with annual income below ₦800,000 after deductions — pay zero PAYE. Employers must remit deducted taxes to the relevant state IRS by the 10th of the following month.
How Our Nigeria PAYE Calculator Works
Our free monthly PAYE tax calculator for Nigeria automates the entire computation process in line with FIRS (now Nigeria Revenue Service) and LIRS guidelines. Enter your salary components and it instantly outputs your PAYE tax, net take-home pay, and a full deduction breakdown.
Gross Income
Basic salary + housing + transport + other allowances
Pension Deduction
8–18% of qualifying emoluments (basic + housing + transport)
NHF (Optional)
2.5% of basic salary for National Housing Fund contributors
Rent Relief
Lesser of ₦500,000 or 20% of annual rent paid
The tool annualises your income, subtracts the ₦800,000 threshold plus eligible reliefs, applies the progressive tax bands, then divides by 12 to give your monthly PAYE figure.
Step-by-Step PAYE Calculation Nigeria 2026
Here is how to manually calculate your PAYE — exactly what the calculator does under the hood:
Calculate Gross Annual Income
Add all monthly salary components and multiply by 12. Include any annual bonuses. Example: ₦250,000/month × 12 + ₦500,000 bonus = ₦3,500,000.
Subtract Statutory Deductions
Deduct pension (8% of qualifying emoluments), NHF if applicable (2.5% of basic), and rent relief (lesser of ₦500,000 or 20% of annual rent).
Subtract the ₦800,000 Threshold
The first ₦800,000 of chargeable income is completely tax-free under the new law. If your chargeable income is below this, you pay zero PAYE.
Apply Progressive Tax Bands
Tax only the portion of income falling within each band. E.g., ₦2,200,000 at 15% = ₦330,000. Add up tax across all applicable bands.
Divide by 12 for Monthly PAYE
Annual tax ÷ 12 = monthly PAYE deduction. E.g., ₦376,800 annual tax = ₦31,400/month deducted by your employer.
Worked Examples: Nigeria PAYE 2026
Low Income
Mid Income
High Income
Key Changes: New Tax Law in Nigeria 2026
The Nigeria Tax Act 2025, signed mid-2025 and effective from 1 January 2026, is the most significant overhaul of Nigeria's personal income tax system in years. Here is what changed:
Higher Tax-Free Threshold
₦800,000 annual exemption, up from ~₦300,000 under the old CRA system.
New Rent Relief
Claim 20% of annual rent (capped at ₦500,000) — submit Form A to your employer by 31 January.
CRA Abolished
The old Consolidated Relief Allowance is gone. The system is now simpler and fairer for middle earners.
Progressive Bands Lowered
Mid-income earners face reduced marginal rates compared to the previous regime.
Digitised Filings
FIRS/NRS is pushing digital remittance, with penalties for late submission after the 10th of each month.
Minimum Wage Exempt
Workers earning up to ~₦70,000/month are effectively fully exempt under the new threshold.
Frequently Asked Questions
What is the PAYE tax rate in Nigeria in 2026?
Nigeria uses a progressive system: 0% on the first ₦800,000, then 15%, 18%, 21%, 23%, and 25% on higher brackets. Most employees fall in the 0–18% range.
Who pays zero PAYE under the new law?
Any employee whose annual chargeable income (after pension, NHF, and rent relief deductions) is ₦800,000 or below pays zero PAYE. This covers most minimum wage earners.
What is LIRS and how does it differ from FIRS?
LIRS (Lagos Internal Revenue Service) handles PAYE remittances for Lagos-based employees. FIRS (now Nigeria Revenue Service) oversees federal taxes. PAYE is a state-level tax, so Lagos employers remit to LIRS.
How do I claim rent relief under the 2026 rules?
Submit Form A to your employer before 31 January each year with proof of your tenancy agreement or rent receipts. Your employer will then apply the relief in your monthly PAYE calculation.
Is this calculator accurate for LIRS PAYE?
Yes. Our tool applies the same progressive bands and relief rules used by LIRS and mirrors the FIRS/NRS framework. For complex situations (multiple income streams, foreign income), consult a tax professional.
When must employers remit PAYE?
Employers must remit deducted PAYE to the relevant state IRS by the 10th of the following month. Late remittance attracts penalties.
Disclaimer
This PAYE calculator is for informational purposes only and provides estimates based on publicly available 2026 Nigeria Tax Act rates. It does not constitute tax advice. For exact calculations, consult a qualified tax professional or your state Internal Revenue Service.
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