Nigeria salary calculator 2026
Free Nigeria salary calculator 2026: net take-home (PAYE) under the new Nigeria Tax Act 2025, effective 1 January 2026. Tax-free first NGN 800,000, bands to 25%, 20% rent relief capped at NGN 500,000 (replacing the CRA), 8% pension and 2.5% NHF. Educational, not tax advice.
by Simon Bodych
Methodology & sources
Methodology - Nigeria (2026)
Educational annual model for tax year 2026 (annual = month x 12), currency NGN - not a payroll system, not a tax return, not tax advice. This engine models the NEW regime under the Nigeria Tax Act 2025 (NTA), signed 26 June 2025 and effective 1 January 2026. The NTA replaces the old Personal Income Tax Act (PITA): the Consolidated Relief Allowance (CRA) and the old 1% minimum-tax rule are abolished. The progressive bands (0% on the first NGN 800,000, then 15% / 18% / 21% / 23% / 25%) and the rent relief are confirmed by the NTA, KPMG and PwC. Pension 8%, NHF 2.5% and the NGN 70,000/month minimum-wage exemption are confirmed statutory values; the employer-side NSITF / ITF levies and the default treatment of the whole gross as the pension base are flagged provisional. Out of scope: taxable benefits in kind, life-assurance / annuity deductions, the package decomposition for pension / NHF, and whole-Naira payroll rounding.
Employment (PAYE)
- Statutory deductions reduce chargeable income before the bands: employee pension 8% (Pension Reform Act 2014), National Housing Fund 2.5% of basic (NHF Act), plus the employee NHIS where it applies. The contribution base is normally pensionable emoluments (basic + housing + transport); with a single gross input this model uses a configurable fraction of gross (default the whole gross), a flagged simplification.
- Rent relief replaces the abolished CRA: 20% of annual rent paid, capped at NGN 500,000 (NTA), deducted from chargeable income. Taxpayers who pay no rent get no rent relief, only the tax-free first band.
- Progressive PIT on chargeable income (NTA Fourth Schedule): first NGN 800,000 at 0%, then 15% to 3,000,000, 18% to 12,000,000, 21% to 25,000,000, 23% to 50,000,000 and 25% above.
- Minimum-wage exemption: employees earning not more than the national minimum wage (NGN 70,000/month, National Minimum Wage Act 2024) are not liable to PAYE.
- Employer cost view adds employer pension 10% plus the NSITF Employee Compensation Scheme 1% and the ITF training levy 1% (employer-only levies, thresholds not modelled, flagged provisional).
Sources: FIRS - Nigeria Tax Act 2025, Fourth Schedule (individual income tax bands and rent relief); signed 26 June 2025, effective 1 January 2026, National Pension Commission (PenCom) - Pension Reform Act 2014, employee 8% + employer 10%, Federal Mortgage Bank of Nigeria (FMBN) - National Housing Fund, 2.5% of basic salary.
Self-employed (business / professional / freelancer)
- A self-employed individual is taxed on net business income (revenue minus deductible expenses) at the SAME individual bands as employment income, under the Nigeria Tax Act 2025 (effective 1 January 2026). The CRA and the old 1% minimum-tax rule are abolished.
- Rent relief (20% of annual rent, capped NGN 500,000) is available the same way as for employees and is deducted from taxable income.
- An optional voluntary Micro Pension Plan contribution (Pension Reform Act 2014, PenCom) is deductible from taxable income and is modelled only when a contribution amount is provided.
- Progressive PIT on taxable income: first NGN 800,000 at 0%, then 15% / 18% / 21% / 23% / 25%, the same NTA Fourth Schedule bands as employment.
- Out of scope: VAT registration thresholds, presumptive / small-company exemptions, withholding tax credits and capital allowances. The minimum-wage PAYE exemption is an employment concept and does not apply to business profit.
Sources: FIRS - Nigeria Tax Act 2025, Fourth Schedule (individual income tax bands, applied to net business income); effective 1 January 2026, National Pension Commission (PenCom) - Pension Reform Act 2014, Micro Pension Plan (voluntary self-employed pension).