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Calculation methodology

How Nigerian PAYE is calculated in 2026

This calculator follows a transparent annual calculation. It does not guess hidden deductions or apply one tax rate to your entire salary.

✓Rules last verified 29 July 2026

The calculation in four steps

  1. 01

    Determine total annual emolument

    Monthly employment income is multiplied by 12. Annual mode uses the total annual emolument entered directly.

  2. 02

    Subtract eligible deductions

    We subtract only the actual annual amounts provided for pension, NHF, NHIS, qualifying mortgage interest and life assurance, plus calculated rent relief.

  3. 03

    Apply the graduated tax bands

    Each rate applies only to the portion of chargeable income inside that band. The first ₦800,000 is taxed at 0%.

  4. 04

    Divide annual PAYE by 12

    Monthly PAYE is the resulting annual tax divided by 12. The engine preserves fractional values and the interface rounds displayed naira amounts for readability.

Rent relief

Rent relief = lower of 20% × annual rent paid or ₦500,000

The calculator asks for annual rent paid and calculates the relief. The official JRB calculator instead asks users to enter the already calculated relief amount.

Sources and verification

The calculation engine is based on the Nigeria Tax Act 2025 and the Joint Revenue Board Personal Income Tax Guidelines 2026. It includes a regression fixture matching the official JRB example of ₦2.4 million annual emolument, which produces ₦240,000 annual PAYE and ₦20,000 monthly PAYE.

Review the complete 2026 tax bands or learn which amounts belong under eligible deductions.