Tax guide
2026 Nigeria Tax Changes: What Employees Should Know
How the Nigeria Tax Act 2026 affects PAYE bands, rent relief, and monthly take-home compared with the older framework.
Short answer: From 1 January 2026, the Nigeria Tax Act framework shifts how many employees' PAYE is estimated — notably progressive annual bands with a higher zero-rate slice, rent relief in place of the older consolidated relief allowance approach for many payroll estimates, and clearer treatment of recurring emoluments. Figures here are illustrative; use the calculator for your own salary.
What changed at a glance
| Topic | Older framework (illustrative) | 2026 framework (illustrative) |
|---|---|---|
| Relief style | Consolidated relief allowance (CRA) commonly featured in legacy payroll math | Rent relief projected from rent paid (subject to evidence) |
| Zero-rate band | Lower threshold in legacy PITA-style estimates | First ₦800,000 of annual taxable income at 0% in 2026 bands |
| Planning | Harder to compare without side-by-side tools | Staff Pay Tax Calculator Compare mode shows 2025 vs 2026 on the same salary |
Always treat payroll estimates as estimates. Employers may use certified payroll software with different rounding or policy choices.
2026 PAYE bands (annual, progressive)
Tax applies slice by slice, not as a flat rate on all income:
| Band | Annual taxable income | Rate |
|---|---|---|
| 1 | First ₦800,000 | 0% |
| 2 | Next ₦2,200,000 (up to ₦3.0M) | 15% |
| 3 | Next ₦9,000,000 (up to ₦12.0M) | 18% |
| 4 | Next ₦13,000,000 (up to ₦25.0M) | 21% |
| 5 | Next ₦25,000,000 (up to ₦50.0M) | 23% |
| 6 | Above ₦50,000,000 | 25% |
Staff Pay Tax Calculator applies these bands after pension, projected rent relief, and NHF (when enabled) in the employee estimate path.
Rent relief replaces CRA in many estimates
Under the 2026 framework used in Tax Lab, rent relief is projected as the lower of:
- 20% of annual rent paid, or
- ₦500,000
No documents are uploaded in the free calculator. The label "Projected rent relief (subject to evidence)" reflects that employers and tax offices may require proof.
Minimum wage and PAYE
Employees at or below the national minimum wage monthly threshold used in the engine may see ₦0 PAYE in an estimate, with explanatory copy on the result. A salary one naira above the threshold can produce a different picture because bands apply to taxable income above the zero-rate slice. See our minimum wage and PAYE guide.
Compare 2025 and 2026 on your salary
Staff Pay Tax Calculator includes a Compare 2025 & 2026 mode on the same gross salary and assumptions. It is for education only — not a historical refund claim or filing position.
Open the Tax Calculator and switch to Compare to see estimated PAYE and net pay under both frameworks.
What this guide does not cover
- Company income tax (CIT) on business profits
- Self-employed annual filing and expense categories
- VAT, WHT, or state development levies
Those are separate obligations with separate planning tools in the Tax Calculator.
Sources reviewed
- Nigeria Tax Act 2025 (effective 1 January 2026)
- Staff Pay Tax Calculator engine rule pack and public copy (August 2026)
- Staff Pay counsel review record for public Tax Lab assumptions
Educational content only. Not tax, legal, or financial advice.
Related guides
Nigeria PAYE Tax Explained for Employees
What PAYE is, who deducts it, how monthly withholding relates to annual tax bands, and how to estimate take-home pay in Nigeria.
ReadRent Relief in Nigeria: How It Affects Your Tax Estimate
How projected rent relief is calculated, what evidence employers may need, and how it fits into PAYE estimates.
Read
National Minimum Wage and PAYE in Nigeria
How the monthly minimum wage threshold can affect PAYE estimates, and why a small salary change can change your tax picture.
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