PAYE is income tax withheld by an employer. The Nigeria Tax Act, 2025 took effect on 1 January 2026. The previous Consolidated Relief Allowance (CRA) no longer forms part of this calculation.
Work out annual chargeable income
Start with annual gross income and subtract eligible deductions. The Joint Revenue Board's 2026 guidance includes qualifying pension and National Housing Fund contributions actually paid, along with other eligible deductions subject to evidence.
Rent relief is 20% of actual annual rent paid, capped at ₦500,000. Use the rent attributable to the assessment year. Rent relief reduces taxable income; it is not an additional amount deducted from your payslip.
Your actual pensionable salary and contribution amounts may differ from a simple percentage of gross salary. Check the deductions on your payslip.
Annual tax bands for 2026
Apply each rate only to the income within that band.
| 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% |
Example: ₦300,000 monthly salary
Assume a constant salary, no allowances, pension contributions of 8% and NHF contributions of 2.5% of that salary, and no rent relief or other deductions. These are the calculator's contribution assumptions, not a statement that every employee contributes on the same basis.
- Annual gross pay: ₦3,600,000.
- Annual pension: ₦288,000.
- Annual NHF: ₦90,000.
- Annual chargeable income: ₦3,222,000.
- Annual tax: ₦0 on the first ₦800,000, plus ₦330,000 on the next ₦2,200,000, plus ₦39,960 on the remaining ₦222,000.
Estimated annual tax is ₦369,960, or ₦30,830 per month. After the assumed pension and NHF contributions, estimated monthly take-home pay is ₦237,670.
If you paid ₦1,000,000 in qualifying annual rent, the ₦200,000 rent relief would reduce annual chargeable income to ₦3,022,000. Estimated monthly tax would then be ₦27,830.
Use the calculator
Estimate your net salary. Enter actual annual rent separately. The estimate assumes constant monthly pay; bonuses, benefits in kind, contribution bases, and payroll adjustments can change the final amount.
Official sources
- Nigeria Tax Act, 2025: commencement date, section 30, and the Fourth Schedule.
- Joint Revenue Board Personal Income Tax Guidelines, 2026: eligible contributions and deductions, and annual rent relief.
By Calc Labo Editorial Team