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PaidHR now supports the new tax law changes effective 1 January 2026. 🚀
PaidHR now supports the new tax law changes effective 1 January 2026. 🚀
Not everyone earns the same way. This calculator supports both salaried and non-salaried income
Best for self-employed and independent earners
Helps you understand your expected tax based on your income.
Best for salaried employees
This reflects how compliant Nigerian payroll calculates PAYE.
Understanding the calculation process behind your tax computation
PAYE and personal taxes in Nigeria are calculated on annual income first.
PAYE and personal taxes in Nigeria are calculated on annual income first.
Nigeria uses progressive tax rates, meaning different portions of income are taxed at different rates.
Your annual tax is converted into clear monthly figures so you can easily understand your take-home pay.
If this calculator helps you understand one salary, imagine automating payroll for your entire team.
Understanding a few payroll terms can make it easier to read and generate payslips.
PAYE (Pay As You Earn) is the tax deducted from employee salaries by employers and remitted to the government.
Net pay is what you actually receive after deductions like tax, pension, and NHF. It’s your real take-home pay.
Gross pay is your total salary before any deductions. It includes your base salary and allowances.
Pension is a statutory retirement contribution shared between employer and employee. Employee contributions reduce taxable income.
NHF (National Housing Fund) is a housing scheme contribution for eligible employees, calculated as a percentage of basic salary.
Rent Relief reduces taxable income based on annual rent paid, within approved limits.
Nigeria uses a progressive tax system, where different portions of your annual taxable income are taxed at different rates.
The first ₦800,000 is tax-free.
Higher portions are taxed progressively from 15%, 18%, 21%, 23% up to 25%
The new tax law changed how taxable income and reliefs are calculated:
Consolidated Relief Allowance (CRA) was removed
Rent Relief introduced (20% of rent, capped at ₦500,000)
Updated tax bands with a tax-free threshold