Nigeria PAYE & net-salary calculator
Updated for the Nigeria Tax Act 2025: first ₦800,000 tax-free, 15–25% bands, pension on Basic + Housing + Transport, NHF, NHIS and the new rent relief. Enter a salary to see take-home pay and PAYE instantly.
Estimate under the Nigeria Tax Act 2025 (effective Jan 2026). Not tax advice; confirm with your payroll team.
Employer also contributes ₦50,000/mo (pension 10% of BHT).
How PAYE is calculated in Nigeria (2025)
The Nigeria Tax Act 2025 took effect on 1 January 2026 and changed how PAYE is computed. Here's the method this calculator uses.
1 · Subtract eligible deductions
Pension (8% of Basic+Housing+Transport), NHF (2.5% of gross), NHIS (5% of basic), mortgage interest, rent relief and life-insurance premium come off your income first.
2 · Apply the bands
What's left (your taxable income) is taxed in progressive slices: the first ₦800,000 is tax-free, then 15%, 18%, 21%, 23% and 25% on higher slices.
3 · Take-home
Take-home pay is gross minus the statutory deductions taken from your payslip (pension, NHF, NHIS) and the PAYE due. Reliefs like rent reduce tax but aren't payslip deductions.
NTA-2025 PAYE bands
| Band | Monthly (₦) | Annual (₦) | Rate |
|---|---|---|---|
| 1 | First ₦66,666.67 | First ₦800,000 | 0% |
| 2 | Next ₦183,333.33 | Next ₦2,200,000 | 15% |
| 3 | Next ₦750,000 | Next ₦9,000,000 | 18% |
| 4 | Next ₦1,083,333.33 | Next ₦13,000,000 | 21% |
| 5 | Next ₦2,083,333.33 | Next ₦25,000,000 | 23% |
| 6 | Above ₦4,666,666.67 | Above ₦50,000,000 | 25% |
What's deducted, and on what basis
Each contribution has its own base. This is the part most calculators get wrong.
| Contribution | Employee | Employer | Based on | Condition |
|---|---|---|---|---|
| Pension | 8% | 10% | Basic + Housing + Transport | Contributory Pension Scheme |
| NHF | 2.5% | — | Gross salary | Optional in the private sector |
| NHIS | 5% | 10% | Basic salary | Employers with 10+ employees |
Independent consultants are subject to 5% Withholding Tax (WHT), not PAYE.
The six deductions from taxable income
These reduce the income PAYE is charged on. Relevant documents may be required to claim them.
Based on the Nigeria Tax Act 2025, administered by the Federal Inland Revenue Service (FIRS). This tool is a guide, not tax advice.
One person at a time isn't payroll.
Vintage People applies every one of these rules across your entire payroll: the right base for each contribution, every relief, every exemption, effective-dated and audit-logged.
See Vintage PayrollWhy bases matter
Pension is 8% of Basic + Housing + Transport, NHIS is 5% of basic, and NHF is 2.5% of gross. Getting the base wrong quietly under- or over-deducts on every payslip, every month.
Common questions
Neither exactly. The employee's 8% pension is calculated on Basic + Housing + Transport (BHT), not total gross. The employer adds 10% on the same base. That's why this calculator asks what share of your gross is BHT.
Under the Nigeria Tax Act 2025, the first ₦800,000 of annual taxable income is taxed at 0%. National minimum-wage earners are fully exempt.
Rent relief replaced the Consolidated Relief Allowance (CRA). It's 20% of the annual rent you pay, capped at ₦500,000, deducted from income before PAYE. Documents may be required.
NHF is 2.5% of gross salary (optional in the private sector). NHIS is 5% of basic salary for the employee, where the employer has 10 or more employees (employer adds 10%).
No. It's a free estimate built to the published NTA-2025 rules. For payslips you can file, Vintage People applies the same rules across your whole payroll with a full audit trail.
Terms worth knowing
From a number to a real payroll
Update PAYE when the tax law changes
Edit one effective-dated table. No software update, no waiting.
Set up salary structures & pay elements
Define what people earn once, assign it in bulk, and override per employee where needed.
The payroll run lifecycle, explained
Run → Review → Approve & lock → Disbursement → Remittances → Rollover. The same flow every month.
Payroll for everyone on your team
See these rules applied to your whole company: accurate, compliant and updated the day the law changes.