Are Nigeria's tax bands progressive?

Yes. Nigeria uses a progressive tax system. Each band rate only applies to the income within that band — not your entire salary. So earning more does not mean your whole salary is taxed at the higher rate.

Nigeria Income Tax Bands 2026 — Full PAYE Rate Table

Q: What is the tax-free threshold in Nigeria for 2026?

Under the Nigeria Tax Act 2026, the first ₦800,000 of annual income is taxed at 0%. This means any Nigerian earning ₦800,000 or less per year pays no income tax.

Q: What is the highest income tax rate in Nigeria in 2026?

The highest marginal income tax rate in Nigeria for 2026 is 26%, which applies to annual taxable income above ₦13,800,000.

The 2026 PAYE Tax Bands

Nigeria uses a progressive tax system — meaning the rate only applies to the income within each band, not your entire salary. The bands below are based on your taxable income (gross salary minus legal reliefs like pension, NHF, and rent relief).

Band	Annual Taxable Income	Tax Rate	Max Tax in Band
1st	₦0 — ₦800,000	0%	₦0 (Tax-Free)
2nd	₦800,001 — ₦2,800,000	15%	₦300,000
3rd	₦2,800,001 — ₦5,800,000	18%	₦540,000
4th	₦5,800,001 — ₦8,800,000	21%	₦630,000
5th	₦8,800,001 — ₦13,800,000	24%	₦1,200,000
6th	Above ₦13,800,000	26%	No limit

Worked Example: ₦6,000,000 Annual Salary

Here is how the tax bands work for a Nigerian earning ₦6,000,000 gross per year, before any reliefs are applied:

₦6,000,000 Gross — Tax Calculation (No Reliefs)

Band 1: ₦800,000 × 0%₦0

Band 2: ₦2,000,000 × 15%₦300,000

Band 3: ₦3,000,000 × 18%₦540,000

Band 4: ₦200,000 × 21% (remainder)₦42,000

Total Annual PAYE Tax₦882,000

Monthly PAYE₦73,500

⚠️ The example above applies no reliefs. In reality, Nigerian employees qualify for pension (8%), NHF (2.5%), rent relief (20%), and NHIS deductions that significantly reduce the taxable income — and therefore the actual tax owed. WAKATAX applies all these reliefs automatically.

Apply Your Reliefs. See Your Real Tax.

The bands above are just the starting point. WAKATAX does the full calculation — pension, NHF, rent relief, NHIS — and gives you your exact, reduced PAYE liability.

Get WAKATAX — From ₦5,000 How to File PAYE →

Frequently Asked Questions

What is the tax-free threshold in Nigeria for 2026?

The first ₦800,000 of annual taxable income is taxed at 0%. Any Nigerian earning ₦800,000 or less per year after reliefs pays no PAYE income tax.

What is the highest income tax rate in Nigeria in 2026?

The highest marginal rate is 26%, which applies to annual taxable income above ₦13,800,000. Only the income above this threshold is taxed at 26% — not the entire salary.

Are the bands based on gross salary or taxable income?

The bands apply to your taxable income — which is your gross salary after subtracting legal reliefs like pension, NHF, rent relief, and NHIS. This is why your actual tax is usually much lower than a simple band calculation would suggest.

Did the Nigeria Tax Act 2026 change the bands significantly?

Yes. The 2026 Tax Act introduced a higher tax-free threshold (₦800,000, up from previous levels) and restructured the progressive bands. The result for most mid-income earners is a lower effective tax rate compared to the previous system.

Does this table apply to freelancers and self-employed Nigerians?

Yes, the same progressive tax bands apply to self-employed individuals and freelancers. However, the allowable reliefs and the filing process differ. See our Freelancer Tax Guide for details.