# PAYE calculator Nigeria 2026 — take-home pay, new tax law

Source page: https://valem.run/calculators/nigeria/net-salary

Your take-home pay in Nigeria in 2026 is your pay minus income tax under the Nigeria Tax Act 2025 — nothing on the first ₦800,000 of chargeable income, then 15% rising to 25% above ₦50 million — and your 8% pension contribution, which is deducted before the tax, as is a 2.5% National Housing Fund contribution if you make one (compulsory in the public sector, voluntary in the private sector).

**Tax year:** 2026

## How it is calculated

The **Nigeria Tax Act 2025** took effect on **1 January 2026**, replacing the Personal Income Tax Act. Chargeable income is your pay less the eligible deductions of section 30: your **pension** contribution under the Pension Reform Act, any **National Housing Fund** contribution, contributions under the national health insurance scheme and a **rent relief** of 20% of the rent you pay, at most **₦500,000**. The old consolidated relief allowance is gone. The Fourth Schedule then charges **0%** on the first ₦800,000, **15%** on the next ₦2.2 million, **18%** on the next ₦9 million, **21%** on the next ₦13 million, **23%** on the next ₦25 million and **25%** above ₦50 million.

On **₦500,000 a month** — ₦300,000 basic and ₦150,000 housing and transport — with ₦1.2 million of rent, the year’s pay is ₦6 million. Pension is 8% of ₦5.4 million (₦432,000) and rent relief ₦240,000, leaving ₦5,328,000 chargeable. Tax is ₦330,000 + 18% of ₦2,328,000 = **₦749,040**, so take-home is **₦401,580** a month. Contributing 2.5% of basic to the NHF (₦90,000) brings the tax to ₦732,840 and take-home to ₦395,430.

Employment income of the national minimum wage or less is exempt (sections 58 and 162(1)(t)). The page uses ₦70,000 a month, the figure of the 2024 amendment to the National Minimum Wage Act, as an input because that Act’s text was not found on an official site. Pension (8% of at least basic, housing and transport) is compulsory where an employer has 15 or more staff. Since the Business Facilitation Act 2022 replaced section 4 of the NHF Act, the 2.5% NHF contribution is reported to be compulsory only for public-sector workers at or above the minimum wage and voluntary in the private sector, so it is off by default. Life-assurance premiums and mortgage interest are also deductible but not modelled. Estimate, not tax advice.

## Worked example

With Gross monthly pay, all taxable allowances of 500,000, this model computes Net / month of 401,580 NGN.

## Inputs

| Name | Label | Type |
| --- | --- | --- |
| `grossMonthly` | Gross monthly pay, all taxable allowances (₦) | number |
| `basicMonthly` | of which basic salary (₦ / month) | number |
| `housingTransportMonthly` | of which housing and transport allowances (₦ / month) | number |
| `annualRent` | Rent you pay for your home (₦ / year) | number |
| `pensionMember` | In the contributory pension scheme (8% of basic, housing and transport) | boolean |
| `nhfMember` | Public-sector employee, or a private-sector employee who opted in to the NHF (2.5% of basic) | boolean |
| `healthInsuranceMonthly` | Your contribution under the national health insurance scheme (NHIA) (₦ / month) | number |
| `minimumWageMonthly` | National minimum wage (₦ / month) | number |

## Sources

- [Nigeria Tax Act 2025 (Act No. 7, in force 1 Jan 2026), s.58 and Fourth Schedule](https://nass.gov.ng/documents/download/11249) (checked 2026-11-01)
- [Nigeria Tax Act 2025 s.30(2)(a): eligible deductions, rent relief 20% up to ₦500,000](https://nass.gov.ng/documents/download/11249) (checked 2026-11-01)
- [Pension Reform Act 2014 (PenCom) s.4(1): employee at least 8% of monthly emoluments](https://www.pencom.gov.ng/wp-content/uploads/2018/01/PRA_2014.pdf) (checked 2026-11-01)
- [National Housing Fund Act Cap N45 (FMBN, 2004 text) s.4: 2.5% of basic; s.4 replaced by the Business Facilitation Act 2022 s.45](https://fmbn.gov.ng/backend/storage/uploads/37UNgpzsyASabzhQCnHuyzFtIpnsfmW2ODvAmQSG.pdf) (checked 2026-11-01)

## What this page claims

The Valem engine reproduces this model's formula through 9 self-test cases. That shows internal consistency, not that the formula matches current law; the cited sources are the evidence for that. Estimate, not tax advice.

## For agents

- Model manifest (formula, constants, test vectors): https://valem.run/calculators/nigeria/net-salary.json
- Compute by URL: https://valem.run/calculators/nigeria/net-salary.json?grossMonthly=500000
- MCP: https://valem.run/mcp/calculators (call `calculate` with calculator `nigeria/net-salary`)