Rent relief is a deduction under the Nigeria Tax Act 2025 that lowers taxable income for individuals who pay rent. It is 20% of the annual rent paid, capped at ₦500,000, so the cap is reached at an annual rent of ₦2,500,000.
Rent relief replaced the Consolidated Relief Allowance from 1 January 2026. Employers can only apply it through payroll if they hold the employee’s rent details, so collect evidence such as a tenancy agreement or receipt at the start of each year.
For an employee on ₦500,000 a month who pays ₦1,200,000 a year in rent, rent relief is ₦240,000 and monthly PAYE falls by ₦3,600. See the PAYE calculator.
Employee management made easy
Keep employee records, attendance, leave, payroll and performance in one connected system.
