SabiCalc
NTA 2025 · live Jan 2026

Take-home pay under Nigeria's new tax law.

Gross salary
₦
Annual rent you pay20% deductible, max ₦500k
₦
Deductions
Monthly take-home · 2026
₦360,580/mo
Gross (monthly)₦450,000
Pension (8%)− ₦36,000
PAYE tax− ₦53,420
Rent relief applied₦240,000/yr
Effective tax rate11.9%
+₦3,007/mo
vs the old tax law. That's ₦36,080 more in your account per year.
How your income fills the tax bands
0% · ₦800k15% · ₦2.2M18% · ₦1.7M

How this calculator works

This tool applies the Nigeria Tax Act 2025, which replaces the Personal Income Tax Act for salaries paid from 1 January 2026. It starts from your gross pay, removes the deductions the law allows, and runs what is left through the new tax bands.

Three deductions are applied before tax. Employee pension is 8% of pay under the Pension Reform Act. National Housing Fund is 2.5% where you contribute. Rent relief is new for 2026: 20% of the annual rent you pay, capped at N500,000. The old Consolidated Relief Allowance is gone, so rent relief and the 0% band are doing the work the CRA used to do.

What remains is your chargeable income, taxed in slices: 0% on the first N800,000, then 15% up to N3 million, 18% up to N10 million, 21% up to N25 million, 23% up to N50 million, and 25% above that. If your gross pay is at or below the national minimum wage of N70,000 a month, you are exempt from income tax entirely.

The comparison card recalculates the same salary under the old law, with CRA and the old 7% to 24% bands plus the 1% minimum tax, so you can see exactly what the change is worth to you per month. One simplification to know about: pension here is computed on gross pay, while the statute applies it to basic, housing and transport. If your allowance split is unusual, your payroll figure can differ slightly. Estimates only, not tax advice.

Frequently asked questions

When does Nigeria's new tax law take effect on salaries?
The Nigeria Tax Act 2025 applies from 1 January 2026. From that date employers must run PAYE using the new bands: the first N800,000 of chargeable income is tax-free, then 15%, 18%, 21%, 23% and 25% as income rises.
Who pays zero income tax under the new law?
Anyone earning the national minimum wage or below, which is N70,000 per month or N840,000 per year, is fully exempt. Separately, the first N800,000 of chargeable income is taxed at 0% for everyone, so many low earners above minimum wage also pay little or nothing.
How does the rent relief work?
You can deduct 20% of the annual rent you actually pay, capped at N500,000 per year, before tax is calculated. To claim it through payroll you will need to declare your rent, and you should keep evidence such as a tenancy agreement or receipts.
What happened to the Consolidated Relief Allowance (CRA)?
The CRA from the old Personal Income Tax Act is abolished from 2026. The new structure replaces it with the 0% band on the first N800,000 of chargeable income plus the rent relief.
Are pension and NHF contributions still deductible?
Yes. Employee pension contributions (8%) and National Housing Fund contributions (2.5%, where applicable) remain deductible before PAYE is applied, under both the old and new rules.

Method: Nigeria Tax Act 2025, effective 1 Jan 2026. Chargeable income = gross − pension (8%) − NHF (2.5%, optional) − rent relief (20% of rent, capped at ₦500,000). CRA is abolished. Earners at or below the national minimum wage (₦70,000/mo) are fully exempt. Estimates only, not tax advice.