How the 2026 computation works
From 1 January 2026, the Nigeria Tax Act 2025 governs personal income tax. The computation order used by this calculator:
- Start with gross annual income (salary, allowances, bonuses).
- Subtract statutory deductions: pension (Pension Reform Act), NHF, NHIS, qualifying life assurance premiums.
- Subtract rent relief: the lower of ₦500,000 or 20% of annual rent actually paid.
- Apply the progressive bands to what remains (taxable income).
2026 annual tax bands
| Taxable income band (₦, annual) | Rate |
|---|---|
| First 800,000 | 0% |
| Next 2,200,000 (800,001 – 3,000,000) | 15% |
| Next 9,000,000 (3,000,001 – 12,000,000) | 18% |
| Next 13,000,000 (12,000,001 – 25,000,000) | 21% |
| Next 25,000,000 (25,000,001 – 50,000,000) | 23% |
| Above 50,000,000 | 25% |
Worked example
Gross annual income ₦6,000,000; rent paid ₦1,200,000; pension ₦480,000; no NHF/NHIS. Rent relief = min(₦500,000, 20% × 1,200,000 = ₦240,000) = ₦240,000. Taxable income = 6,000,000 − 480,000 − 240,000 = ₦5,280,000. Tax = 800,000 × 0% + 2,200,000 × 15% + 2,280,000 × 18% = 0 + 330,000 + 410,400 = ₦740,400(about ₦61,700/month, effective rate 12.3% of gross).
What replaced the Consolidated Relief Allowance
The old CRA (₦200,000 + 20% of gross income) is abolished. Low earners are instead protected by the ₦800,000 zero band and the minimum-wage PAYE exemption; renters get the new rent relief. Depending on your income mix, your 2026 tax may be higher or lower than 2025 — middle earners who own their homes (no rent relief) see the biggest differences.
Rates verified against PwC Tax Summaries (Nigeria, Individual taxes) reflecting the Nigeria Tax Act 2025. State tax authorities administer PAYE; employer computations may include rounding differences.
Frequently Asked Questions
What changed in Nigeria's personal income tax from January 2026?
The Nigeria Tax Act 2025 replaced the old Personal Income Tax Act bands from 1 January 2026. The first ₦800,000 of annual taxable income is now taxed at 0%, the old Consolidated Relief Allowance (CRA) was abolished, and a new rent relief (20% of annual rent paid, capped at ₦500,000) was introduced. The old 1% minimum tax rule was also scrapped.
What are the 2026 tax bands and rates?
Annual taxable income is taxed progressively: first ₦800,000 at 0%; next ₦2,200,000 (to ₦3M) at 15%; next ₦9,000,000 (to ₦12M) at 18%; next ₦13,000,000 (to ₦25M) at 21%; next ₦25,000,000 (to ₦50M) at 23%; and everything above ₦50,000,000 at 25%.
How does the new rent relief work?
You can deduct the lower of ₦500,000 or 20% of the annual rent you actually paid from your income before tax is computed. You must declare the rent paid; homeowners who pay no rent do not receive this relief. It replaces the old CRA (which was 20% of gross income + ₦200,000 for everyone).
Are pension and NHF contributions still deductible?
Yes. Contributions to a registered pension scheme (under the Pension Reform Act), National Housing Fund (NHF), and National Health Insurance Scheme (NHIS) remain deductible before computing taxable income, along with qualifying life assurance premiums.
Who pays no tax at all under the new law?
Anyone whose annual taxable income falls entirely within the ₦800,000 zero band. In addition, workers earning the national minimum wage (about ₦70,000/month) or less are exempt from PAYE entirely.
Does this calculator apply to my salary before or after January 2026?
This calculator implements the Nigeria Tax Act 2025 rules that apply to income from 1 January 2026. Income earned in 2025 or earlier is assessed under the old PITA bands (7%–24% with CRA), which this calculator does not compute.
Is 13th month salary or bonus taxed differently?
No special exemption — bonuses form part of gross employment income and are taxed within the same progressive bands.