How it's calculated
- Gross pay = basic + housing + transport + other allowances. Annual gross = monthly gross × 12.
- Eligible deductions (Nigeria Tax Act 2025, section 30(2)): employee pension under the Pension Reform Act (default 8% of basic + housing + transport), NHF (default 2.5% of basic), NHIS contributions, owner-occupied mortgage interest, life insurance premiums, and rent relief of 20% of annual rent paid, capped at ₦500,000. The old Consolidated Relief Allowance no longer applies.
- Chargeable income = annual gross − eligible deductions.
- Annual tax (Fourth Schedule): first ₦800,000 at 0%; next ₦2,200,000 at 15%; next ₦9,000,000 at 18%; next ₦13,000,000 at 21%; next ₦25,000,000 at 23%; above ₦50,000,000 at 25%.
- Monthly PAYE = annual tax ÷ 12. Remit by the 10th of the following month to the tax authority of the employee's state of residence.
- Employer pension (default 10%) is a cost to the employer and is not deducted from the employee.
Sources: Nigeria Tax Act 2025 (Act No. 7, Official Gazette No. 117, 26 June 2025), section 30 and Fourth Schedule; PwC Worldwide Tax Summaries, "Nigeria – Individual – Sample personal income tax calculation" (reviewed 29 May 2026), which our test suite reproduces exactly (₦25m gross, ₦2m rent → PAYE ₦4,176,000); Joint Tax Board 2026 Personal Income Tax Guidelines for remittance and filing dates.
Not tax advice. PayslipNG is an informational tool. Check figures with your tax adviser or state tax authority before you remit or file. Tax authorities may require documents for every relief claimed.
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