How personal income tax works in Nigeria
Nigeria taxes personal income on a progressive scale: each slice of income is taxed at its own rate, so earning more never makes your existing income taxed at a higher rate. Under the Nigeria Tax Act 2025, which applies from 2026, the first ₦800,000 of annual taxable income is taxed at 0%.
Employees usually pay through PAYE, deducted by their employer. Self-employed people and business owners file and pay through the tax authority of their state of residence.
The bands this calculator uses
- First ₦800,000: 0%
- Next ₦2,200,000: 15%
- Next ₦9,000,000: 18%
- Next ₦13,000,000: 21%
- Next ₦25,000,000: 23%
- Above ₦50,000,000: 25%
In the calculator, the tax-free ₦800,000 appears as a standard deduction and the remaining bands are applied to the rest. You can edit any band if the rates change or you want to test a scenario.
How to use the calculator
Enter your gross annual income. Add reliefs and deductions you are entitled to, such as pension contributions or rent relief, one line at a time. The results show taxable income, total tax, effective and marginal rates and your income after tax, with a breakdown for each band.
Select Export to Excel to keep a copy. If you run a business, your taxable income starts with profit, so build an income statement first.