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Last updated: May 2026 • 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.
The 2026 personal income tax bands start with ₦800,000 taxed at 0%. In practical terms, this can reduce PAYE for low-income earners where taxable income falls below the threshold.
Rent relief is calculated as 20% of annual rent, but it is capped at ₦500,000. The calculator applies this cap before estimating PAYE.
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 |
|---|---|---|
| First 800,000 | 0% | No tax on this portion |
| Next 2,200,000 | 15% | Tax starts after the first 800,000 |
| Next 9,000,000 | 18% | Higher rate applies to this slice only |
| Next 13,000,000 | 21% | Higher rate applies to this slice only |
| Next 25,000,000 | 23% | Higher rate applies to this slice only |
| Above 50,000,000 | 25% | Top band rate applies above 50,000,000 |