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Last updated: January 2026 planning • Educational guide (not official advice)
The Nigeria Tax Act 2025 is part of a broad effort to modernize and consolidate Nigeria’s tax framework. Most workers won’t read the Act cover-to-cover, but you should understand how taxable income is determined and how payroll deductions can change in 2026.
Many summaries describe a more progressive structure, so low-income earners benefit most and higher earners pay more on the higher portions of income.
Many reputable summaries reference an annual threshold around ₦800,000. In practical terms, this can reduce PAYE for low-income earners where taxable income falls below the threshold.
Employers typically handle PAYE. In 2026, payroll accuracy and timely remittance matter even more. If your PAYE changes suddenly, request a breakdown from HR/payroll.
Always confirm official computation with payroll/HR and relevant authorities.
| Annual taxable income band (₦) | Rate | Simple meaning |
|---|---|---|
| Up to 800,000 | 0% | No tax on this portion |
| 800,001 – 3,000,000 | 15% | Tax starts above 800,000 |
| 3,000,001 – 12,000,000 | 18% | Higher rate applies above 3,000,000 |
| 12,000,001 – 25,000,000 | 21% | Higher rate applies above 12,000,000 |
| 25,000,001 – 50,000,000 | 23% | Higher rate applies above 25,000,000 |
| Above 50,000,000 | 25% | Top band rate applies above 50,000,000 |