Free tool
What changed in 2026.
The Nigeria Tax Act 2025 came into force on 1 January 2026 and it changed the arithmetic on every Nigerian payslip. Here is what is different, in words a business owner can use.
The four things that matter
The first ₦800,000 is exempt
Annual income up to ₦800,000 is taxed at nil. On the minimum wage, after pension relief, a worker now owes nothing.
The bands moved
Six bands now, running from nil to 25 per cent, and the thresholds are higher than they were.
Rent relief arrived
Twenty per cent of annual rent, capped at ₦500,000, comes off taxable income. It has to be claimed.
The old relief is gone
The Consolidated Relief Allowance, 20 per cent of gross plus ₦200,000, no longer exists. Any payslip still applying it is wrong.
The bands, in full
| Annual chargeable income | Rate |
|---|---|
| First ₦800,000 | Nil |
| Next ₦2,200,000, to ₦3,000,000 | 15 per cent |
| Next ₦9,000,000, to ₦12,000,000 | 18 per cent |
| Next ₦13,000,000, to ₦25,000,000 | 21 per cent |
| Next ₦25,000,000, to ₦50,000,000 | 23 per cent |
| Above ₦50,000,000 | 25 per cent |
Chargeable income is what is left after pension, the National Housing Fund, the National Health Insurance contribution, life assurance premiums, housing loan interest and rent relief.
What it means for you, depending on who you are
If you employ people
Your payroll arithmetic changed on 1 January 2026, and if it is still applying the old relief every payslip you have issued this year is wrong. You also now have to handle rent relief claims, which means collecting tenancy documents and applying them per person.
If you are paid a salary
You are probably paying more than you owe, because rent relief is not applied unless you hand over a document. Lower earners may owe nothing at all now. Check, do not assume.
If you work for yourself
The nil band applies to you too, so a lot of small independent earners now have no liability. You still have a filing obligation, and proof of income is still the document you actually need.
Coming next
Electronic invoicing, 2027.
The electronic invoicing requirement reaches businesses under ₦1bn turnover on 1 July 2027, with enforcement from 2028. If you invoice other businesses, that is the next thing on your calendar after this year’s filings, and it is worth knowing about now rather than in June 2027.
Sources and verification
Rates and reliefs on this page are taken from the Nigeria Tax Act 2025 as reported by Nigerian tax practice commentary in 2026. Ovie, before this page goes live it needs a last verified date, a named source list, and sign off from the tax lead. Nothing on this page is tax advice and it should say so in the footer.