Nigeria Tax Act 2025 · Effective January 2026
Tax on a ₦500,000 salary in Nigeria
A ₦500,000 monthly salary (₦6,000,000 a year) pays about ₦72,500 PAYE per month before any deductions — an effective rate of 14.5%. With the typical 8% pension contribution, tax drops to about ₦65,300/month. Rent relief (20% of rent, up to ₦500,000) lowers it further.
No deductions
₦72,500/mo tax
Take-home: ₦427,500/mo
Effective rate: 14.5%
With 8% pension
₦65,300/mo tax
Take-home after pension & tax: ₦394,700/mo
Effective rate: 13.1%
Old law comparison: before 2026 this salary paid about ₦896,000/yr. Under the new law it pays ₦870,000/yr — ₦26,000 less (2.9%).
Band-by-band breakdown (no deductions)
| Band | Income in band | Tax |
|---|---|---|
| First ₦800,000 @ 0% | ₦800,000 | ₦0 |
| Next ₦2.2M @ 15% | ₦2,200,000 | ₦330,000 |
| Next ₦9M @ 18% | ₦3,000,000 | ₦540,000 |
| Total for the year | ₦6,000,000 | ₦870,000 |
What can reduce this tax?
- Pension — your 8% contribution comes off before tax.
- Rent relief — 20% of your annual rent, up to ₦500,000, is deductible.
- NHF and NHIS contributions you actually pay.
Make it exact for YOUR rent & pension →
Other salaries
₦70k₦80k₦100k₦120k₦150k₦200k₦250k₦300k₦350k₦400k₦450k₦500k₦600k₦700k₦750k₦800k₦900k₦1M₦1.2M₦1.5M₦2M₦3M₦5M₦10M
Estimate only — not tax advice. Figures assume a full calendar year. © 2026 TaxWahala.com — free, private, unofficial.