The 2026 PAYE bands
PAYE is charged on chargeable income, which is your annual gross pay less your allowable deductions. Each slice is taxed at its own rate, so a raise never lowers your take-home pay.
How PAYE is worked out
- Annual gross payMonthly gross pay times 12, with all taxable allowances.
- Subtract deductionsPension, NHF, health insurance, life insurance, loan interest and rent relief.
- Chargeable incomeWhat is left. It cannot go below zero.
- Apply the bandsTax each slice at its own rate and add the slices.
- Divide by 12That is the PAYE your employer deducts each month.
Worked example: ₦500,000 a month, ₦1,200,000 yearly rent
Standard split of 50% basic, 25% housing and 15% transport, with 8% employee pension.
The effective tax rate is 12.5% of gross pay.
PAYE on common monthly salaries
The most searched salaries, worked out with the standard 50/25/15 split, 8% employee pension on 90% of gross pay, no NHF and no rent or other reliefs. Use the calculator for your own figures.
| Gross pay a month | Pension | PAYE | Take-home | Effective rate |
|---|---|---|---|---|
| ₦70,000 | ₦5,040 | ₦0 | ₦64,960 | 0.0% |
| ₦100,000 | ₦7,200 | ₦3,920 | ₦88,880 | 3.9% |
| ₦150,000 | ₦10,800 | ₦10,880 | ₦128,320 | 7.3% |
| ₦200,000 | ₦14,400 | ₦17,840 | ₦167,760 | 8.9% |
| ₦300,000 | ₦21,600 | ₦32,612 | ₦245,788 | 10.9% |
| ₦400,000 | ₦28,800 | ₦49,316 | ₦321,884 | 12.3% |
| ₦500,000 | ₦36,000 | ₦66,020 | ₦397,980 | 13.2% |
| ₦750,000 | ₦54,000 | ₦107,780 | ₦588,220 | 14.4% |
| ₦1,000,000 | ₦72,000 | ₦149,540 | ₦778,460 | 15.0% |
| ₦2,000,000 | ₦144,000 | ₦342,260 | ₦1,513,740 | 17.1% |
What lowers your PAYE
Of basic, housing and transport. Your employer’s 10% is not added to your taxable pay.
20% of the rent you pay in a year. Keep the tenancy agreement or receipts.
Of basic salary, where it is deducted from your pay.
Your own contribution. The rate depends on your scheme.
Premiums on your own life policy, with evidence.
Interest on a loan for an owner-occupied home, with the lender’s statement.
Keep the paperwork. Every relief needs documents. A claim without evidence can be disallowed if the tax authority asks.
Who pays no PAYE, and what changed
Until 31 December 2025
- Consolidated Relief Allowance of ₦200,000 (or 1% of gross, if higher) plus 20% of gross pay
- Bands from 7% to 24%
- Top rate of 24%
- No rent relief
From 1 January 2026
- First ₦800,000 of chargeable income taxed at 0%
- No CRA. Rent relief of 20% of rent, up to ₦500,000
- Bands from 15% to 25%
- Top rate of 25% above ₦50,000,000
Chargeable income of ₦800,000 or less a year attracts no tax, and employees on the national minimum wage (₦70,000 a month or less) are exempt. Whether you pay more or less than before depends on your income and rent. Tick “Compare with the old rules” in the calculator to see your own difference.
For employers and payroll officers
- Deduct PAYE monthly using the 2026 bands, from January 2026 payroll onwards.
- Remit it to the State Internal Revenue Service of the state where the employee lives.
- File the annual employer return by 31 January for the previous year.
- Pay the employer pension share (at least 10% of monthly emoluments) to each employee’s pension fund administrator.
- Record each employee’s Tax ID. See how to check a Tax ID with a NIN.
State practice differs. Check the remittance portal and deadlines of your State IRS before relying on these dates.
Frequently asked questions
How is PAYE calculated in Nigeria in 2026?
Take your annual gross pay, subtract your allowable deductions (employee pension, National Housing Fund, health insurance, life insurance premium, housing loan interest and rent relief), and apply the progressive bands to what is left. The first ₦800,000 is taxed at 0%, then 15%, 18%, 21%, 23% and 25%. Divide the annual tax by 12 for the monthly deduction.
How much PAYE do I pay on a ₦200,000, ₦500,000 or ₦1,000,000 monthly salary?
With 8% pension on 90% of gross pay, no NHF and no rent relief, PAYE is about ₦17,840 a month on ₦200,000 (take-home about ₦167,760), about ₦66,020 on ₦500,000 (take-home about ₦397,980) and about ₦149,540 on ₦1,000,000 (take-home about ₦778,460). Your own figure changes with your salary structure and reliefs, so use the calculator above.
Is the first ₦800,000 of my income really tax-free?
Yes. Under the Nigeria Tax Act 2025 the first ₦800,000 of chargeable income a year is taxed at 0%. It is applied to chargeable income, which is what is left after your deductions, so your gross pay can be higher than ₦800,000 and still produce no tax.
Do I still get the Consolidated Relief Allowance (CRA)?
No. The CRA (the higher of ₦200,000 or 1% of gross income, plus 20% of gross income) was part of the old Personal Income Tax Act and does not apply to periods from 1 January 2026. Rent relief replaces it for people who pay rent: 20% of annual rent, up to ₦500,000.
Do minimum wage earners pay PAYE?
No. Employees on the national minimum wage (₦70,000 a month) or less are exempt, and anyone whose chargeable income is ₦800,000 or less a year pays no tax.
Which tax office does the PAYE go to, and by when?
Employers remit PAYE to the State Internal Revenue Service of the state where the employee lives, by the 10th of the month after the salary is paid, and file the annual return by 31 January. Confirm the current deadline with your State IRS, because state portals and practices differ.
Why is my payslip different from this calculator?
Payroll systems differ in how they treat pensionable pay, NHF, health insurance and rent relief, and some employers have not yet changed their payroll to the 2026 rules. Compare the lines one by one. If your employer is still using the old Consolidated Relief Allowance for 2026 pay, ask them to review it.
Sources and last verified date (7 November 2026)
Rates, bands and reliefs follow the Nigeria Tax Act 2025 (in force from 1 January 2026). Checked against:
- KPMG Nigeria, Personal Income Tax Reimagined (bands, rent relief, employer duties)
- Comprehensive guide to personal income tax deductions under the Nigeria Tax Act 2025
- Statutory filing obligations guide (PAYE remittance and annual return dates)
- CIPM, Statutory deductions, tax and pensions (pension and NHF rates)
Worked results were also checked against published examples from BusinessDay and other Nigerian advisers. The calculator is tested against them.