Nigerian PAYE Tax Calculator
Calculate your income tax under NTA 2025 — including CRA, pension, NHF deductions, and take-home pay.
| Band | Rate | Taxable | Tax |
|---|---|---|---|
| First ₦800,000 | 0% | ₦800,000 | ₦0 |
| Next ₦2,200,000 | 15% | ₦2,200,000 | ₦330,000 |
| Next ₦9,000,000 | 18% | ₦1,045,000 | ₦188,100 |
How Nigerian PAYE Tax Works
PAYE (Pay As You Earn) is Nigeria's system for collecting income tax from employed persons. Your employer deducts tax from your salary each month and remits it to the relevant State Internal Revenue Service (SIRS). The Nigeria Tax Act 2025 (NTA 2025) introduced new tax bands effective from the 2026 tax year.
Step 1 — Gross Income
Your gross income includes your basic salary plus all allowances: housing, transport, medical, and any other emoluments.
Step 2 — Deductions Before Tax
Before calculating taxable income, the following are deducted:
- Consolidated Relief Allowance (CRA) — The higher of ₦200,000 or 1% of gross income, plus 20% of gross income
- Pension (CPS) — 8% of your Basic + Housing + Transport allowances (employee contribution)
- NHF — 2.5% of basic salary (National Housing Fund contribution)
- Life insurance premiums, NHIS contributions (where applicable)
Step 3 — Apply Tax Bands
The NTA 2025 progressive tax bands are applied to your taxable income:
| Annual Taxable Income | Rate | Tax on Band |
|---|---|---|
| First ₦800,000 | 0% | ₦0 |
| Next ₦2,200,000 (up to ₦3M) | 15% | Up to ₦330,000 |
| Next ₦9,000,000 (up to ₦12M) | 18% | Up to ₦1,620,000 |
| Next ₦13,000,000 (up to ₦25M) | 21% | Up to ₦2,730,000 |
| Next ₦25,000,000 (up to ₦50M) | 23% | Up to ₦5,750,000 |
| Above ₦50,000,000 | 25% | 25% on excess |
Worked Example
Chioma earns ₦500,000/month gross
Salary structure: 50% Basic (₦250K), 25% Housing (₦125K), 25% Transport (₦125K)
Tax Calculation:
NTA 2025 vs Old Tax Act — Key Changes
The Nigeria Tax Act 2025 made significant changes to individual taxation:
- Zero-rate band doubled — First ₦800K (up from ₦300K) is now tax-free
- New top rate of 25% — Applies only above ₦50M annual taxable income
- Middle bands restructured — More income taxed at lower rates
- CRA retained — The 20% gross + higher of ₦200K or 1% of gross formula unchanged
- Low income earners benefit most — Those earning ₦100K–₦500K/month see significant tax reductions
Use the Old vs New tab to see exactly how much you save under NTA 2025 compared to the Finance Act 2020.