Pay As You Earn (PAYE) is the system under which an employer deducts personal income tax from employees’ pay every month and pays it to the tax authority of the state where each employee lives.
From 1 January 2026, PAYE is worked out under the Nigeria Tax Act 2025: annual gross pay, minus allowable deductions such as pension and NHF, minus rent relief, taxed across bands from 0% on the first ₦800,000 to 25% above ₦50 million, then divided by 12. Employees on the national minimum wage or less are exempt.
PAYE for each month is due by the 10th of the following month, and the employer’s annual return is due by 31 January.
See how to calculate PAYE or use the PAYE calculator.
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