Enter your pay the way your payslip splits it to see what reaches your bank account, and where the rest went. It opens on the example worked through further down the page.
Lagos salary and PAYE calculator
Work out your take-home pay in Lagos after PAYE, pension and the National Housing Fund, with rent relief and a band-by-band breakdown of the tax.
How the calculation works
The order matters, and it is the part payroll gets wrong:
- Pension comes off first — 8% of your basic, housing and transport, not of your total pay.
- The National Housing Fund takes 2.5% of basic alone.
- Rent relief comes off what is left: 20% of the rent you paid for the year, capped at ₦500,000. It is never paid to you. It shrinks the figure the tax is worked out on.
- PAYE is charged on what remains, band by band, over the whole year, and divided by twelve for each payslip.
Pension and the NHF are not taxed. If your payroll works out PAYE on the gross before taking them off, you are paying too much.
The bands are annual because the Nigeria Tax Act 2025 states them annually. Working a monthly salary against them without multiplying by twelve first is the commonest way to get a payslip wrong.
Worked examples
Four monthly salaries at the rates in force now. Each assumes basic is 50% of the gross, housing 30% and transport 20%, with the NHF deducted and no rent relief claimed. That split is an assumption for the examples, not a rule. The calculator gives the same answers for the same inputs, because both read the same figures.
| Gross a month | Pension and NHF | PAYE | Take-home | PAYE as share of gross |
|---|---|---|---|---|
| ₦150,000 | ₦13,875 | ₦10,418.75 | ₦125,706.25 | 6.9% |
| ₦400,000 | ₦37,000 | ₦47,840 | ₦315,160 | 12% |
| ₦1,000,000 | ₦92,500 | ₦145,850 | ₦761,650 | 14.6% |
| ₦3,000,000 | ₦277,500 | ₦537,008.33 | ₦2,185,491.67 | 17.9% |
The share taken by PAYE climbs as pay rises. That is what graduated bands do: nobody’s first naira is taxed at the top rate, and a raise never leaves you with less than before.
One salary, line by line
Take a gross of ₦400,000 a month — ₦200,000 basic, ₦120,000 housing and ₦80,000 transport — earned by a tenant paying ₦1,800,000 a year for a mid-range one-bedroom. Work over the year, because the Act does.
- Gross for the year is ₦4,800,000.
- Pension, 8% of basic, housing and transport, is ₦384,000.
- The NHF, 2.5% of basic, is ₦60,000.
- Rent relief, 20% of the rent, is ₦360,000, under the ₦500,000 cap.
- Chargeable income is what is left: ₦3,996,000.
- PAYE is charged on that, band by band:
| Slice of chargeable income | Rate | Tax on it |
|---|---|---|
| ₦800,000 | 0% | ₦0 |
| ₦2,200,000 | 15% | ₦330,000 |
| ₦996,000 | 18% | ₦179,280 |
| PAYE for the year | ₦509,280 | |
That is ₦42,440 a month. Take-home is ₦400,000 less ₦32,000 pension, ₦5,000 NHF and ₦42,440 PAYE: ₦320,560.
Without the rent relief, the same salary pays ₦47,840 a month in PAYE. The relief is worth ₦5,400 a month, and claiming it takes evidence that the rent was paid — which is the best reason there is to insist on a receipt naming the period.
— The rent advance, and the receipt
What your employer pays on top
Your employer pays a further 10% of basic, housing and transport into your RSA — ₦40,000 a month on the example above. It never appears in your pay, but it is your money, in your account.
A larger employer also pays 1% of its payroll to the Employee Compensation Scheme and 1% to the Industrial Training Fund. Neither comes out of your salary.
Why the split on your payslip matters
The Pension Reform Act 2014 sets the minimum base for pension at basic, housing and transport. A contract can make it wider, and seldom does, so anything paid under another name — a utility allowance, a meal allowance, a lump called “other” — usually carries no pension at all. The NHF is narrower still: basic and nothing else.
That puts more in your hand today and less in your RSA. Two offers with the same gross are not the same offer. Read the split before you sign.
The bands
Annual, on chargeable income, under the Fourth Schedule of the Nigeria Tax Act 2025:
| Chargeable income a year | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 | 15% |
| Next ₦9,000,000 | 18% |
| Next ₦13,000,000 | 21% |
| Next ₦25,000,000 | 23% |
| Above ₦50,000,000 | 25% |
The calculator reads these same figures, so the table and the tool cannot disagree.
What it does not include
- The other deductions the Act allows — health insurance contributions, life insurance premiums and the interest on a loan for the home you live in. Each lowers your tax further.
- A bonus or arrears paid in a lump, which payroll may tax in the month they land.
- Benefits in kind, such as a company car or a house.
- A second job or a side business. Both go on the same annual return, so the bands bite harder than either payroll suggests on its own.
Who you pay
If you live in Lagos, your PAYE goes to the LIRS, whichever state your employer is in. Residence decides it, not the head office.
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