Short answer
Yes. Under the tax laws that took effect in Nigeria on 1 January 2026, income from a side hustle counts as part of your personal income and is taxable, together with any salary you earn. However, the first ₦800,000 of annual taxable income is taxed at 0%, and business income is taxed on profit after allowable expenses, so good records directly lower what you owe.
Many people assume side hustle income isn't taxed if the business isn't registered. That isn't how it works.
Side hustle income counts as personal income
If you earn a salary and also sell, freelance, or run a small business on the side, both count toward your personal income. Your side hustle profit is added to your salary to work out your tax.
The first ₦800,000 is taxed at 0%
Under the Nigeria Tax Act 2025, effective 1 January 2026, the first ₦800,000 of annual taxable income is taxed at 0%. Income above that is taxed in bands from 15% up to 25%. See how much tax you'll pay under the new law.
You're taxed on profit, not sales
Business expenses you can show, such as stock, transport, and tools, reduce your taxable income. That's why keeping good records matters so much.
If you're employed
Your employer usually deducts tax from your salary through PAYE. Side hustle income isn't covered by that deduction, so declaring it is your responsibility.
Please note
Tax rules change and every situation is different. This is general information, not tax advice. Confirm your position with your state internal revenue service or a qualified tax professional.
Doing this in Gripd
Gripd's tax estimate applies the 2026 bands to the income and expenses you've logged, giving you a rough idea of your tax so there are no surprises when it's time to file.
Last updated 29 Sept 2026
Related questions
How do I prove my income without a payslip?
Use bank statements showing regular deposits, invoices and receipts you've issued, contracts or letters from clients, and a clear summary of your income over the last six to twelve months. The more consistent and organized your records, the more convincing they are. Keeping records from the start makes this easy when a landlord, embassy, or lender asks.
Read the full answerHow much tax will I pay under Nigeria's new tax law?
From 1 January 2026, Nigerian personal income tax is charged in bands: 0% on the first ₦800,000 of annual taxable income, 15% on the next ₦2.2 million, 18% on the next ₦9 million, 21% on the next ₦13 million, 23% on the next ₦25 million, and 25% on anything above ₦50 million. Each rate applies only to the income within its band.
Read the full answerWhat records should I keep for tax?
Keep a record of all the income you receive, all the business expenses you pay, and the evidence behind them, such as receipts, invoices, and bank statements. Note the date, amount, and purpose of each. Good records let you claim every legitimate expense and prove your income if you're ever asked.
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