Calculate Nigerian PAYE tax under PITA rules. Computes Consolidated Relief Allowance (CRA), 8% pension, state tax bands, and net take-home salary instantly.
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In Nigeria, individual income taxation is governed federally by the Personal Income Tax Act (PITA 2011, as amended by subsequent annual Finance Acts), but administration and revenue collection are decentralized to the State Internal Revenue Service (SIRS) where the employee is resident as of January 1st of the tax year.
For example, individuals living in Lagos State have their PAYE remitted to the Lagos State Internal Revenue Service (LIRS), while residents of Abuja remit to the Federal Capital Territory Internal Revenue Service (FCT-IRS). The Federal Inland Revenue Service (FIRS) administers personal tax solely for armed forces personnel, foreign affairs officers, and non-resident individuals.
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Open Salary to Hourly CalculatorThe Consolidated Relief Allowance (CRA) is the primary tax shelter for Nigerian employees under Section 33 of PITA. The statutory formula is: CRA = Higher of (₦200,000 OR 1% of Gross Annual Income) + 20% of Gross Annual Income.
For salaries up to ₦20,000,000 annually, the ₦200,000 base is larger than 1% of gross. Once gross annual earnings exceed ₦20,000,000, 1% of gross becomes higher than the ₦200,000 fixed minimum. In both scenarios, the additional 20% of gross is added, ensuring that at least 21% to 30%+ of your income is entirely sheltered from income tax before bracket application.
After deducting your Consolidated Relief Allowance (CRA), statutory 8% pension contributions, National Housing Fund (NHF), and qualifying life assurance premiums from gross earnings, the remaining balance is your Chargeable Income. This is taxed progressively across six statutory tiers:
| Annual Chargeable Band | Band Width | Marginal Rate | Max Tax in Band | Cumulative Max Tax |
|---|---|---|---|---|
| First ₦300,000 | ₦300,000 | 7% | ₦21,000.00 | ₦21,000.00 |
| Next ₦300,000 | ₦300,000 | 11% | ₦33,000.00 | ₦54,000.00 |
| Next ₦500,000 | ₦500,000 | 15% | ₦75,000.00 | ₦129,000.00 |
| Next ₦500,000 | ₦500,000 | 19% | ₦95,000.00 | ₦224,000.00 |
| Next ₦1,600,000 | ₦1,600,000 | 21% | ₦336,000.00 | ₦560,000.00 |
| Above ₦3,200,000 | Unlimited | 24% | Variable (24%) | ₦560k + 24% on excess |
Under Section 4 of the Pension Reform Act (PRA 2014), employees in organizations with 15 or more employees must contribute a minimum of 8% of their monthly emoluments (basic salary, transport allowance, and housing allowance) to an approved Pension Fund Administrator (PFA). Employers contribute a mandatory minimum of 10%.
Under the Fourth Schedule of PITA, employee pension contributions are 100% tax-deductible before calculating chargeable income. Similarly, the 2.5% contribution to the National Housing Fund (NHF) administered by the Federal Mortgage Bank of Nigeria is tax-exempt.
Under PITA Section 37, every taxable individual whose computed progressive tax is lower than 1% of gross income (or where allowable reliefs extinguish taxable income completely) is assessed a Minimum Tax equal to 1.0% of gross annual earnings. However, individuals earning the national minimum wage or less are legally exempt from personal income tax under Finance Act provisions.
Employers in Nigeria must remit all withheld monthly PAYE deductions to the relevant State Internal Revenue Service on or before the 10th day of the following calendar month. Employers are also required to file annual Form H1 returns and Form A declarations by January 31st of each succeeding year.
A mid-level software engineer in Lagos earns ₦450,000.00 monthly with standard 8% pension contributions.
The engineer takes home ₦357,573.33 per month (79.5% of gross earnings), with an effective PAYE tax rate of 12.5%.
A graduate analyst in Abuja earns ₦150,000.00 monthly (₦1,800,000.00 annualized) subject to PITA statutory brackets.
The graduate analyst receives ₦127,300.00 net monthly take-home pay (84.9% of gross salary), with an effective tax rate of only 7.1%.
A corporate director in Victoria Island earns ₦1,250,000.00 per month (₦15,000,000.00 annualized) with top-bracket tax exposure.
The executive receives ₦955,333.33 net take-home salary per month, representing an effective tax rate of 15.6% on their ₦1.25M monthly compensation.
Demonstrating the statutory 1% minimum tax floor under PITA Section 37 when taxable income after relief falls to zero.
Under Finance Act amendments, low-income earners earning at or below the national minimum wage are protected, with maximum tax liability capped at the statutory 1% minimum tax floor.
CRA is calculated as the higher of ₦200,000 or 1% of gross annual income, PLUS 20% of gross annual income. This relief is subtracted from your gross earnings alongside pension contributions before applying the progressive tax brackets.
Under PITA Section 37, every taxable individual is subject to a minimum tax of 1% of gross annual income if their calculated progressive tax is less than 1% or if allowable reliefs reduce taxable income to zero.
Yes. Under the Pension Reform Act (PRA 2014) and PITA, the mandatory 8% employee pension contribution is fully tax-exempt and deducted directly from gross earnings prior to calculating chargeable income.
Under Finance Act amendments, low-income earners whose total annual gross remuneration is at or below the national statutory minimum wage threshold are completely exempt from personal income tax withholding.
Under the residency rule of PITA, PAYE is remitted to the State Internal Revenue Service where you maintain your permanent residence (e.g., LIRS for Lagos residents, OGIRS for Ogun residents), regardless of where your employer is headquartered.
Employers must remit all withheld monthly PAYE deductions on or before the 10th day of the following calendar month to avoid statutory penalties and 10% late payment interest.
The National Housing Fund Act mandates a 2.5% contribution of basic monthly salary for Nigerian workers in the public and organized private sectors earning above the statutory minimum wage threshold. This contribution is tax-deductible.