In Nigeria your take-home pay changed with the Nigeria Tax Act 2025, in force from January 2026. Your net pay now depends on the new PAYE bands, your pension contribution and rent relief. These calculators use the 2026 rules so you can see what you actually keep.

From gross to net

Under the new law, the first ₦800,000 of taxable income is tax-free; above that, PAYE runs from 15% to 25%. Before the bands apply, pension (8% of qualifying pay) and rent relief (20% of rent, capped at ₦500,000) are deducted, so your taxable income is lower than your gross.

VAT, the naira and inflation

VAT is 7.5% on most goods and services. As a reference, the US dollar is around ₦1,375. And inflation has been steep: since 2010 prices are up nearly 8× (NBS CPI), which is why older salaries lose value fast.

At a glance

Key 2026 numbers

Item	2026 value (reference)
Income tax (Tax Act 2025)	0% up to ₦800,000, then 15% – 25%
Pension (employee)	8%
NHF	2.5% (often optional)
Rent relief	20% of rent (cap ₦500,000)
VAT	7.5%
USD / NGN	~₦1,375
Inflation since 2010 (CPI)	prices ~7.9× (100 → 790)

Heads up

These figures reflect the Nigeria Tax Act 2025 (in force from 1 January 2026) and are estimates. This is not tax advice — use it as a quick estimate.

FAQ

Common questions

Under the Nigeria Tax Act 2025, the first ₦800,000 of taxable income is tax-free, then rates run at 15%, 18%, 21%, 23% and 25% on higher slices. Only the income within each band is taxed at that rate.

Once your taxable income — after pension and rent relief — passes ₦800,000 a year. Below that, no PAYE is due.

A new deduction that replaced the old consolidated relief allowance: 20% of your annual rent, capped at ₦500,000, reduces your taxable income.

Under the Pension Reform Act, employees contribute 8% of basic, housing and transport allowances, and employers add 10%.

By NBS CPI (base 100 in 2010), prices are around 790 — nearly eight times higher, so ₦100 in 2010 buys about ₦13 worth today.