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Nigeria PAYE Tax Calculator 2026
Calculate your PAYE (Pay As You Earn) tax deductions with accurate Nigeria PAYE tax rates under the Nigeria Tax Act 2025
PAYE Calculator: Get instant PAYE calculation in Nigeria for employees using the current 2026 tax bands under the Nigeria Tax Act 2025.
What is PAYE?
PAYE (Pay As You Earn) is Nigeria's system for collecting income tax from employees. Your employer deducts PAYE tax from your salary based on current Nigeria PAYE tax rates and remits it to tax authorities.
₦Employee Income Details (PAYE)
Additional Income
−PAYE Deductions & Allowances
Basic + Housing + Transport
Required for employers with 15+ employees
Basic salary only
Required for employers with 10+ employees
Basic salary only, capped at ₦200/month
For employees earning >₦3,000/month
Additional Deductions
Ready to Calculate Your PAYE?
Enter your employee income details above to calculate accurate PAYE tax deductions using current Nigeria PAYE rates
Disclaimer
This PAYE calculator provides accurate estimates for Nigerian employees' Pay As You Earn tax planning purposes.
Legal Framework:
- Calculations use the current Nigeria PAYE tax rates under the Nigeria Tax Act 2025 (effective January 1, 2026)
- Previous rates under PITA 2011 (as amended) are shown below for historical reference
Key Features:
- Handles monthly/annual pay periods with automatic conversion
- Optional statutory deductions with checkboxes (not all employers participate)
- Pension (8% of Basic + Housing + Transport) - Required for employers with 15+ employees
- NHIS (5% of basic salary) - Required for employers with 10+ employees
- NHF: 2.5% of basic salary, capped at ₦200/month for salaries >₦3,000/month
- Gratuity is treated as tax-exempt (per 2019 Tax Appeal Tribunal ruling)
- Benefits-in-kind (e.g., car benefit at 5% of cost) are taxable
- Reimbursements with receipts are not taxable
- Rent relief: 20% of rent paid, maximum ₦500,000
- First ₦800,000 of annual income is completely tax-free
- No minimum tax under the Nigeria Tax Act 2025
- Only specific eligible deductions per Section 30 - no generic "other deductions"
Results may vary based on individual circumstances, residency status, and other factors. Consult a qualified tax professional for personalized advice.
Current PAYE Tax Rates 2026
Tax Act 2025| Annual Income Range | PAYE Rate |
|---|---|
| First ₦800,000 | 0% (Tax Free) |
| 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% |
Previous PAYE Tax Rates (2025)
| Annual Income Range | PAYE Rate |
|---|---|
| First ₦300,000 | 7% |
| Next ₦300,000 | 11% |
| Next ₦500,000 | 15% |
| Next ₦500,000 | 19% |
| Next ₦1,600,000 | 21% |
| Above ₦3,200,000 | 24% |
These rates applied under PITA 2011 (as amended) and were replaced by the Nigeria Tax Act 2025 effective January 1, 2026.
Frequently Asked Questions About PAYE in Nigeria
What are the current PAYE tax rates in Nigeria for 2026?
Under the Nigeria Tax Act 2025 (effective January 2026), PAYE tax rates are:
- First ₦800,000: 0% (Tax Free)
- 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%
What were the PAYE tax rates in Nigeria for 2025?
Prior to 2026, Nigeria PAYE tax rates under PITA 2011 ranged from 7% to 24% based on progressive income bands:
- First ₦300,000: 7%
- Next ₦300,000: 11%
- Next ₦500,000: 15%
- Next ₦500,000: 19%
- Next ₦1,600,000: 21%
- Above ₦3,200,000: 24%
How is PAYE calculation done in Nigeria?
PAYE is calculated using progressive tax bands on your chargeable income after deducting allowable reliefs and statutory deductions (pension, NHIS, NHF). Under the current 2026 rules, the first ₦800,000 of chargeable income is tax-free, and eligible deductions include rent relief (20% of rent, max ₦500,000), life insurance premiums, and housing loan interest. Your employer automatically deducts PAYE from your salary monthly.
What changed in Nigeria PAYE tax from 2025 to 2026?
The Nigeria Tax Act 2025 introduced significant changes effective January 2026: The first ₦800,000 of annual income is completely tax-free, new progressive rates apply to higher income brackets, the Consolidated Relief Allowance (CRA) was replaced with specific deductions including rent relief of up to ₦500,000, and the 1% minimum tax rule was removed.
Who is exempt from PAYE tax in Nigeria?
Under the current 2026 tax rules, employees earning less than ₦800,000 annually (approximately ₦66,667 monthly) are completely exempt from PAYE tax, as the first ₦800,000 of chargeable income falls within the 0% tax band. Previously under the 2025 rules, employees earning the national minimum wage (₦70,000 monthly) or less were exempt.
Is there still a minimum PAYE tax in Nigeria?
No. The 1% minimum tax rule that applied under the previous PITA 2011 (used through 2025) has been removed under the Nigeria Tax Act 2025. From 2026, only progressive tax applies based on the new tax bands.
What statutory deductions reduce PAYE tax?
Under the current 2026 rules, eligible deductions include: Pension contribution (8% of basic + housing + transport allowances), NHIS contribution (5% of basic salary), NHF contribution (2.5% of basic salary, capped at ₦200/month), rent relief (20% of annual rent paid, max ₦500,000), life insurance premiums, and housing loan interest. The previous Consolidated Relief Allowance (CRA) no longer applies.
What is the PAYE percentage in Nigeria by income level?
PAYE percentage varies by income level due to Nigeria's progressive tax system. Under the 2026 rates, income up to ₦800,000 is tax-free, income between ₦800,001 and ₦3,000,000 is taxed at 15%, income from ₦3,000,001 to ₦12,000,000 at 18%, and higher brackets at 21%, 23%, or 25%. The effective PAYE rate depends on your total annual income and applicable deductions.
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Important Disclaimer:
This tax calculator provides only an estimate based on the information you provide and current tax rates as per the Nigeria Tax Act, 2025. Actual tax liabilities may differ. This tool should not be considered as professional tax or financial advice. Please consult with a qualified tax professional for advice specific to your situation.