From gross to take-home, under the new law
Your gross salary is never what you take home. First, your 8% pension (and optional 2.5% NHF) come out — and pension is deductible before tax. You can also claim rent relief (20% of annual rent, capped at ₦500,000).
Then PAYE applies under the 2026 bands, where the first ₦800,000 of taxable income is tax-free and rates rise from 15% to 25%.
Good to know
Pension is taken on gross here as a simplification — strictly it's on basic + housing + transport.
Common questions
PAYE income tax, your 8% pension contribution, and optionally 2.5% NHF. Pension and rent relief are deducted before tax, lowering your PAYE.
The Nigeria Tax Act 2025 took effect on 1 January 2026. The first ₦800,000 of taxable income is now tax-free, the old consolidated relief allowance is replaced by a rent relief, and the bands changed.
You can deduct 20% of your annual rent, up to a maximum of ₦500,000, from your taxable income. Enter your monthly rent to include it.