Personal Income Tax / PAYE Calculator
Computes Nigerian Pay-As-You-Earn (PAYE) income tax under PITA 2026 Sixth Schedule, Consolidated Relief Allowance (CRA), statutory pension, NHF, and minimum tax.
Computational Framework & Statutory Formulas
Gross Income = Basic Salary + Housing + Transport + Other Allowances
Rent Relief = 20% of Annual Rent Paid (Capped at ₦500,000 max deduction)
Chargeable Income = Gross Income - (Statutory Pension + NHF + NHIS + Life Assurance + Rent Relief)
First ₦800k @ 0% · Next ₦2.2m @ 15% · Next ₦9.0m @ 18% · Next ₦13.0m @ 21% · Next ₦25.0m @ 23% · Above ₦50.0m @ 25%
If Gross Income ≤ ₦800,000/year, Annual PAYE Tax = ₦0 (100% Exempt)
Nigerian Economic & Statutory Context
In Nigeria, Personal Income Tax is administered by the State Internal Revenue Service (SIRS) where the employee resides, while residents of the Federal Capital Territory (FCT) and military/police personnel remit to the FIRS. Employers are legally obligated under Section 81 of PITA to deduct PAYE monthly and remit within 10 days of the subsequent month.
Frequently Asked Questions (FAQ)
What are the main changes introduced by the PITA 2026 Act?
The PITA 2026 Act (enacted under the Nigeria Tax Act 2026) replaces the old 7%-24% bands with a new progressive scale: First ₦800,000 is 0% (tax-free), Next ₦2.2m @ 15%, Next ₦9.0m @ 18%, Next ₦13.0m @ 21%, Next ₦25.0m @ 23%, and Above ₦50.0m @ 25%. The old CRA is abolished and replaced with a 20% Rent Relief deduction (up to ₦500,000) and the ₦800,000 tax-free bracket.
How is Rent Relief calculated under PITA 2026?
Under PITA 2026, individual taxpayers can claim 20% of their actual annual rent paid, subject to a statutory maximum cap of ₦500,000 per tax year, deducted directly from chargeable income.
Are employee pension contributions tax-deductible in Nigeria?
Yes. Under the Pension Reform Act 2014 and PITA Section 33, statutory pension contributions (minimum 8% of Basic, Housing, and Transport) paid to a licensed Pension Fund Administrator (PFA) are fully tax-exempt.
Who is exempt from PAYE under PITA 2026?
Under PITA 2026, any individual earning an annual gross income of ₦800,000 or less is completely exempt from personal income tax, paying ₦0 in tax liability.
What is the deadline for filing annual employer tax returns in Nigeria?
Employers must file Form H1 (annual employer declaration) with the relevant State Internal Revenue Service on or before January 31st of each calendar year, detailing all employee compensation and taxes remitted in the preceding year.