How income tax works in Nigeria
Nigeria taxes residents on worldwide income under the 2026 Tax Act. Domicile, a permanent home, family and economic ties, or 183 days in any twelve months each trigger residence.
Bands on chargeable income run 0% to NGN 800,000, 15% to NGN 3 million, 18% to NGN 12 million, 21% to NGN 25 million, 23% to NGN 50 million and 25% above. Pension, housing-fund, insurance and owner-occupied mortgage relief come off first.
Renters deduct 20% of declared rent to NGN 500,000. Employers withhold PAYE monthly on emoluments minus reliefs and remit to the state or federal service.
Income tax brackets in Nigeria
| Bracket | Rate | Notes |
|---|---|---|
| Up to NGN 800,000 | 0% | Tax-free band, new 2026 law |
| NGN 800,001 to NGN 3,000,000 | 15% | After eligible deductions |
| NGN 3,000,001 to NGN 12,000,000 | 18% | After eligible deductions |
| NGN 12,000,001 to NGN 25,000,000 | 21% | After eligible deductions |
| NGN 25,000,001 to NGN 50,000,000 | 23% | After eligible deductions |
| NGN 50,000,001 and above | 25% | Top personal rate |
Tax rates at a glance
- Zero band
- NGN 800,000New law
- Second band
- 15%
- Middle band
- 18% / 21%
- Upper band
- 23%
- Top band
- 25%
- Rent relief cap
- NGN 500,000
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsContractorsHigh earnersCross-border workers
Watch out for
- Old PITA bands are repealed. Any guide quoting 7% to 24% describes history, not 2026 law.
- Rent relief needs declared, provable rent. Informal tenancies without receipts cannot claim the 20%.
- Reliefs must be claimed in writing with documents. Pension, insurance and mortgage deductions do not apply automatically.
- There is no 0.5% minimum personal tax. Old company minimum rules never applied to individuals — do not budget for one.
Frequently asked questions
Do expats pay income tax in Nigeria?
Yes, if resident or earning Nigerian income. Residents pay on worldwide income with treaty credits, while non-residents pay on Nigerian sources only.
What is the top income tax rate in Nigeria?
25% above NGN 50 million of chargeable income under the 2026 Tax Act.
How much is tax-free in Nigeria?
NGN 800,000 of chargeable income, plus pension, housing-fund and insurance relief and 20% of rent to NGN 500,000.
Is salary taxed differently from gains?
Gains join the same bands: individuals pay personal rates on aggregated gains, while companies pay 30% on folded-in profits.