The Nigeria Take-Home Pay Calculator is designed to give you a realistic picture of what your monthly earnings will look like once the New Tax Act comes into force in January 2026. It follows the structure of a typical payslip and applies the exact deductions that matter under the law, such as pension contributions, the newly introduced Rent Relief, and other pre-tax items like the National Housing Fund. By entering your gross income and a few optional details, the calculator automatically works out your taxable income, applies the progressive PAYE bands, and returns a clear net pay figure.
Inputs you provide
- Gross pay: Monthly gross salary or annual gross salary.
- Pension basis: Enter your monthly emoluments for pension if you split pay into basic, housing and transport, or simply enter your pensionable amount. Employee pension is a minimum of 8 percent of monthly emoluments under the Pension Reform Act 2014.
- Rent Relief: Optional. Enter your verified annual house rent if you are a tenant. The tool applies the lower of 20 percent of rent or ₦500,000 as a deduction, only if rent is paid and evidenced. Homeowners are not eligible.
- NHF: Optional. If your employer operates NHF deductions, enter the NHF basis. NHF is typically 2.5 percent of basic salary and in practice may be voluntary in parts of the private sector.
- Other pre-tax deductions: Voluntary pension top-ups or approved deductions where applicable.
What the Take-Home Pay Calculator does
To begin, you enter your gross salary, either monthly or annually. The calculator can convert between the two so that you can always compare figures on the same basis.
Computes employee pension deduction
Pension is then applied. Under the Pension Reform Act, employees contribute a minimum of 8 percent of their monthly emoluments, which typically include basic salary, housing, and transport. This deduction is taken before PAYE is worked out. If your employer operates NHF deductions, usually calculated at 2.5 percent of basic salary, you can enter this amount as well. Some employers also allow voluntary top-ups or other approved deductions, and the calculator can take these into account.
Pension = Pensionable Emoluments × 8 percent.
Applies Rent Relief
One of the biggest changes in the new system is the replacement of the Consolidated Relief Allowance with a Rent Relief. If you are a tenant and you pay rent, you can claim a deduction of up to 20 percent of your annual rent, but it is capped at ₦500,000. For example, if your yearly rent is ₦600,000, the calculator will allow ₦120,000 as relief. If your rent is ₦3,000,000, the relief will stop at ₦500,000. Homeowners cannot use this deduction. The figure is removed from your gross income before tax is calculated.
Rent Relief = min(20 percent of Annual Rent, ₦500,000).
Determines taxable income
Once these pre-tax deductions are applied, the calculator determines your taxable income. This is the amount left after subtracting pension, NHF, and the rent relief (if eligible) from your gross. The calculator then applies the new PAYE tax bands. Under the New Tax Act, annual income up to ₦800,000 is fully exempt, and higher amounts are taxed progressively up to 25 percent. The calculator goes through each band automatically, adding up the correct amount of tax for your earnings.
Taxable Income = Gross Income − Pension − Rent Relief − NHF − other allowable deductions.
Calculates net pay
The last step is to compute your net pay. This is done by subtracting PAYE, pension contributions, NHF (if applicable), and any other declared deductions from your gross salary. The result is your true take-home pay each month or year, presented in a simple format so you can plan your budget and evaluate job offers with confidence.
Net Pay = Gross Pay − PAYE − Pension − NHF − other post-tax items.
Example 1. Entry-level employee
Assume ₦180,000 monthly gross. Pensionable emoluments equal gross. Annual gross = ₦2,160,000. Pension = 8 percent × ₦180,000 = ₦14,400 monthly. No NHF. Pays rent of ₦600,000 per year, so Rent Relief = min(20 percent × 600,000, 500,000) = ₦120,000 per year. Annual taxable income = 2,160,000 − 172,800 − 120,000 = ₦1,867,200. Apply the new PIT bands to get annual PAYE, then divide by 12 for monthly PAYE. Net monthly pay = 180,000 − monthly PAYE − 14,400. The calculator performs the banding automatically.
Example 2. Minimum-wage earner
Assume annual income ₦780,000 and no rent claim. Under the New Tax Act, income up to ₦800,000 is exempt, so PAYE is ₦0. If pensionable emoluments equal gross, pension at 8 percent is optional only if enrolled, which would be ₦62,400 per year. Net pay reflects only pension and any optional deductions since PAYE is zero.
Notes for accuracy
- The tool targets January 2026 rules and will not use the old Consolidated Relief Allowance, which has been scrapped in favour of Rent Relief.
- VAT proposals and unrelated levies are not part of PAYE but may affect household budgets. Implementation of broader measures was timed for 2026 to ease pressures.
