Nigeria Tax Act 2025 · Effective January 2026
Tax on a ₦5,000,000 salary in Nigeria
A ₦5,000,000 monthly salary (₦60,000,000 a year) pays about ₦1,077,500 PAYE per month before any deductions — an effective rate of 21.6%. With the typical 8% pension contribution, tax drops to about ₦977,500/month. Rent relief (20% of rent, up to ₦500,000) lowers it further.
No deductions
₦1,077,500/mo tax
Take-home: ₦3,922,500/mo
Effective rate: 21.6%
With 8% pension
₦977,500/mo tax
Take-home after pension & tax: ₦3,622,500/mo
Effective rate: 19.6%
Old law comparison: before 2026 this salary paid about ₦11,168,000/yr. Under the new law it pays ₦12,930,000/yr — ₦1,762,000 more (15.8%).
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% | ₦9,000,000 | ₦1,620,000 |
| Next ₦13M @ 21% | ₦13,000,000 | ₦2,730,000 |
| Next ₦25M @ 23% | ₦25,000,000 | ₦5,750,000 |
| Above ₦50M @ 25% | ₦10,000,000 | ₦2,500,000 |
| Total for the year | ₦60,000,000 | ₦12,930,000 |
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.