Short answer
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.
The bands
Annual taxable income is taxed as follows:
- First ₦800,000: 0%
- ₦800,001 to ₦3,000,000: 15%
- ₦3,000,001 to ₦12,000,000: 18%
- ₦12,000,001 to ₦25,000,000: 21%
- ₦25,000,001 to ₦50,000,000: 23%
- Above ₦50,000,000: 25%
How the bands work
Each rate applies only to the part of your income inside its band. Earning more never means all of your income is taxed at the higher rate.
A worked example
For taxable income of ₦4,000,000 a year:
- First ₦800,000 at 0%: ₦0
- Next ₦2,200,000 at 15%: ₦330,000
- Remaining ₦1,000,000 at 18%: ₦180,000
Total tax: ₦510,000, which is about 12.75% of taxable income.
What "taxable income" means
Taxable income is your income after allowable deductions and reliefs. For business income, that means profit after legitimate expenses. Reliefs include rent relief of 20% of the annual rent you pay, up to ₦500,000.
Salary plus side hustle
If you have a salary and a side hustle, both count. See whether you pay tax on side hustle income.
Please note
This summarizes the Nigeria Tax Act 2025 as it applies from 1 January 2026. It's general information, not tax advice. Confirm your situation with your state internal revenue service or a qualified tax professional.
Doing this in Gripd
Gripd's tax estimate applies these bands to the profit you've logged, giving you a running idea of what you might owe through the year.
Last updated 29 Sept 2026
Related questions
Do I pay tax on side hustle income in Nigeria?
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.
Read the full answerHow 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 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.
Read the full answerTrack it all in one place
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