Nigeria PAYE & Net Pay Calculator

How this calculator works

The calculator follows the personal income tax rules of the Nigeria Tax Act 2025, which replaced the Personal Income Tax Act from 1 January 2026. It annualises your monthly figures, removes the allowable deductions, applies the progressive bands, and divides the result by twelve.

1. Gross pay is basic salary plus housing, transport and any other taxable allowances.
2. Employee pension is 8% of basic, housing and transport, as required by the Pension Reform Act 2014.
3. NHF (optional) is 2.5% of basic salary for employees covered by the National Housing Fund scheme.
4. Rent relief replaces the old Consolidated Relief Allowance. It is 20% of annual rent paid, capped at ₦500,000.
5. Bands apply to what is left: first ₦800,000 at 0%, next ₦2.2m at 15%, next ₦9m at 18%, next ₦13m at 21%, next ₦25m at 23%, and anything above ₦50m at 25%.

The 2026 PAYE bands

Worked example

An employee earns ₦250,000 a month with no rent relief claimed and the whole amount treated as pensionable. Annual gross is ₦3,000,000 and pension is ₦240,000, leaving ₦2,760,000 chargeable. The first ₦800,000 is tax-free and the remaining ₦1,960,000 is taxed at 15%, giving ₦294,000 a year, or ₦24,500 a month. Take-home pay is ₦205,500.

Limits of this estimate

Other deductions such as NHIS contributions, life assurance premiums or approved pension additions can reduce chargeable income further, and PAYE is remitted to the relevant State Internal Revenue Service, whose assessment is final. Treat the result as an estimate and confirm important figures with a qualified tax professional. See our disclaimer.

Sources

Nigeria Tax Act 2025 (Fourth Schedule for the rate bands), Nigeria Tax Administration Act 2025, and the Pension Reform Act 2014. If you spot a discrepancy, tell us and we will check it against the Act.