Nigeria Tax Act 2025: What It Means for Your Business (2026 Guide)
Quick Answer: The Nigeria Tax Act 2025 (NTA 2025) replaced the Personal Income Tax Act (PITA) effective 1 January 2026. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] For your business, that means new PAYE bands, a scrapped Consolidated Relief Allowance, and fresh remittance rules — starting now. If you ran payroll in January without updating your numbers, you may already be off.
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What You’ll Need Before You Start
- Employee salary breakdown (Basic, Housing, Transport, other allowances)
- Pension contribution records
- NHF opt-in status per employee
- Rent receipts (if employees are claiming rent relief)
- Your payroll software or spreadsheet — ready to update
Estimated time to update: 1–3 hours for a small team
Estimated compliance cost: ₦0 if you do it yourself; ₦500 per employee per payroll run on Lint Payroll [SOURCE: Lint Pricing]
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Why This Post Exists
Most businesses found out about the NTA 2025 the same way — an accountant called, or a payroll question came up that didn’t match any old formula. Many pre-2026 sources, including some FIRS pages and most blog content from 2024–2025, still describe the old PITA regime. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] So if your payroll setup hasn’t changed since last year, it’s almost certainly wrong.
This guide gives you exactly what changed, with the real numbers.
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Step 1: Understand the Nigeria Tax Act 2025 — What Actually Changed
The headline shift: the Nigeria Tax Act 2025 replaced PITA effective 1 January 2026. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] But the detail matters more than the headline.
The new PAYE bands under NTA 2025
The tax-free threshold is now ₦800,000 annually — approximately ₦66,667 per month. [SOURCE: NTA 2025 Sixth Schedule] [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
Here are the full bands:
| Annual Chargeable Income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 (up to ₦3M) | 15% |
| Next ₦9,000,000 (up to ₦12M) | 18% |
| Next ₦13,000,000 (up to ₦25M) | 21% |
| Next ₦25,000,000 (up to ₦50M) | 23% |
| Above ₦50,000,000 | 25% |
[SOURCE: NTA 2025 Sixth Schedule]
The old PITA rates — 7%, 11%, 15%, 19%, 21%, 24% — are gone. If you’re reaching for a 7%/11%/15%/19%/21%/24% band structure, stop — that is the old PITA regime and is no longer in effect. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
The tweetable take: The first ₦800,000 of your employee’s annual income is now taxed at zero. That’s a genuine win for lower earners.
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Step 2: Remove the CRA From Your Payroll Calculations — Permanently
This one catches a lot of businesses off guard.
The Consolidated Relief Allowance (CRA) has been eliminated. The CRA — formerly ₦200,000 + 20% of gross income — does NOT apply from 2026 onward. Payroll calculations for 2026 must not include CRA. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: NTA 2025]
What replaced it?
A rent relief of 20% of annual rent paid by the employee, capped at ₦500,000 per year. This replaces the Consolidated Relief Allowance, which was eliminated under NTA 2025. The employee files for the relief; the employer applies it to the PAYE computation. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: NTA 2025]
Pro tip: Rent relief is not automatic. Your employee needs to provide rent receipts. If they haven’t filed for it, don’t apply it — and don’t skip it for those who have.
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Step 3: Recalculate Chargeable Income Correctly
The computation steps are:
1. Compute annual gross emoluments (Basic + Housing + Transport + Other Allowances)
2. Subtract statutory deductions — employee pension, NHF, NHIS where applicable — and reliefs (rent relief)
3. Apply the NTA 2025 bands to the chargeable income annually
4. Divide annual PAYE by 12 for monthly deduction [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
[SOURCE: NTA 2025 Sixth Schedule]
Common slip: Some payroll setups still use gross salary as the base for everything. That’s wrong for pension — more on that below.
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Step 4: Get Pension Right — Base, Rate, Deadline
Pension hasn’t changed under NTA 2025, but a lot of businesses still compute it incorrectly.
Under the Pension Reform Act 2014, the employee contribution rate is 8% and the employer rate is 10% — a total of 18%. Crucially, pensionable emoluments are Basic + Housing + Transport, NOT gross salary. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: PRA 2014]
Contributions must be remitted within 7 working days of salary payment. Late remittance attracts a penalty of 2% of unpaid contributions per month. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: PRA 2014]
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Step 5: Handle NHF and Health Insurance Correctly
NHF
The NHF rate is 2.5% of gross monthly salary. However, under BFA 2022, private-sector employees can opt out of NHF. Treat it as opt-in per employee, not a default deduction. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: National Housing Fund Act]
Don’t deduct NHF for every employee by default. Get written opt-in confirmation first.
Health Insurance
Health insurance premiums are paid to HMOs — Hygeia, Avon, AXA Mansard, Reliance Health, Leadway Health, and others — on plan-based pricing. There is no longer a single statutory formula. Premiums vary by chosen plan. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: NHIA Act 2022]
If someone quotes you “5% employee + 10% employer of basic salary” — that’s the old NHIS Act 2004 formula. It is no longer the universal rule. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
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Step 6: Know Your Remittance Deadlines
Missing these dates is where penalties come from.
Key deadlines:
- PAYE: 10th day of the month following the month of deduction
- Pension: Within 7 working days of salary payment
- NHF: Monthly, alongside PAYE remittance
- Annual employer return (Form H1): 31 January for the prior tax year
- Annual personal tax return: 31 March for the prior tax year [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
[SOURCE: NTA 2025 / PRA 2014]
Pro tip: PAYE on the 10th and pension within 7 working days of pay day are two different clocks. Run them separately.
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The Full Cost Table
| Item | Cost | Notes |
|---|---|---|
| PAYE computation (DIY) | ₦0 | You own the error risk |
| Pension remittance (DIY) | ₦0 + bank transfer fees | 2% penalty per month if late |
| NHF remittance (DIY) | ₦0 | Only for opted-in employees |
| Lint Payroll | ₦500/employee per run | PAYE computation, pension, NHF, payslips, remittance, salary advances |
[SOURCE: Lint Pricing]
Lint Payroll is ₦500 per employee per payroll run and covers PAYE computation, pension, NHF, payslips, remittance, and salary advances. Salary disbursement is free to a Lint account and ₦40 to any other Nigerian bank. [SOURCE: Lint pricing (source of truth)]
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Common Mistakes Nigerian Business Owners Make Under NTA 2025
1. Still using PITA bands
The 7%/11%/15%/19%/21%/24% bands are gone. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] If your payroll software hasn’t been updated, your PAYE figures are wrong.
2. Including CRA in 2026 calculations
The CRA — formerly ₦200,000 + 20% of gross income — does not apply from 2026 onward. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] Remove it entirely.
3. Computing pension on gross salary
Pensionable emoluments are Basic + Housing + Transport — not gross salary. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] Overpaying or underpaying pension both create problems.
4. Applying NHF as a default deduction
Private-sector employees can opt out of NHF under BFA 2022. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] Deducting without opt-in is a liability.
5. Treating gratuity as tax-exempt
Under NTA 2025, gratuity is now taxable. [SOURCE: NTA 2025] This was a PITA exemption that no longer exists.
6. Quoting the wrong health insurance formula
The old NHIS Act 2004 framing of “5% employee + 10% employer of basic salary” is no longer the universal rule. Do not state it as a current statutory rate. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
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How Lint Handles This For You
Here’s the honest truth: running PAYE under NTA 2025 manually means tracking six bands, rent relief claims, pension on the right base, NHF opt-ins, and three separate remittance deadlines. That’s a lot of moving parts for a small team.
Lint Payroll covers PAYE computation, pension, NHF, payslips, remittance, and salary advances for ₦500 per employee per payroll run. [SOURCE: Lint pricing (source of truth)] The tax computation follows the NTA 2025 bands — updated for 2026. You don’t chase the NRS deadline on the 10th. Lint does.
Lint also handles withholding tax (WHT) auto-deduction and remittance on contractor payments — so if you pay consultants or contractors, that’s covered too.
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FAQs — Nigeria Tax Act 2025
What is the Nigeria Tax Act 2025?
The Nigeria Tax Act 2025 replaced the Personal Income Tax Act (PITA) effective 1 January 2026. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] It introduced new PAYE bands, eliminated the Consolidated Relief Allowance, and brought in a rent relief deduction.
What are the new PAYE tax bands under NTA 2025?
The first ₦800,000 of annual chargeable income is taxed at 0%. The bands then run from 15% up to 25% for income above ₦50,000,000. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: NTA 2025 Sixth Schedule]
How much tax is deducted from a ₦300,000 monthly salary in Nigeria?
A ₦300,000 monthly salary equals ₦3,600,000 annually. After subtracting statutory deductions (pension on Basic + Housing + Transport) and any applicable rent relief, chargeable income falls within the 15%–18% bands. [SOURCE: NTA 2025 Sixth Schedule] The exact figure depends on your salary split and reliefs — use a payroll tool or run the band calculation step by step.
Is the Consolidated Relief Allowance still in effect?
No. The CRA has been eliminated. The former ₦200,000 + 20% of gross income allowance does not apply from 2026 onward. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
What replaced the Consolidated Relief Allowance?
A rent relief of 20% of annual rent paid by the employee, capped at ₦500,000, replaced the CRA. The employee files for the relief and the employer applies it to the PAYE computation. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)]
What are the 4 new tax laws in Nigeria?
The main reform package includes the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board Act 2025. The Federal Inland Revenue Service has also transitioned to The Nigeria Revenue Service. [SOURCE: Authoritative source — FIRS — Federal Inland Revenue Service] All four were signed on 26 June 2025 and took effect on 1 January 2026. [SOURCE: NTA 2025; Nigeria Tax Administration Act 2025; Nigeria Revenue Service (Establishment) Act 2025; Joint Revenue Board Act 2025]
When is PAYE due each month?
PAYE must be remitted by the 10th day of the month following the month of deduction. [SOURCE: Locked regulatory facts — Nigerian Tax & Statutory Deductions (NTA 2025-aligned)] [SOURCE: NTA 2025]
Is gratuity still tax-exempt under NTA 2025?
No. Gratuity is now taxable under NTA 2025. This is a direct change from PITA, where gratuity was exempt. [SOURCE: NTA 2025]
Where can I download the Nigeria Tax Act 2025 PDF?
The official text is available on the Nigeria Revenue Service portal at nrs.gov.ng. [SOURCE: NRS]
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Related Tools
- Lint Payroll — PAYE computation, pension, NHF, payslips, and remittance for ₦500 per employee per run. Try it on lint.finance
- Lint WHT Auto-Remittance — Withholding tax on contractor payments, handled automatically.
- Lint Business Registration — Register your business with CAC and get your TIN in the same flow.
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Bottom Line
The Nigeria Tax Act 2025 is the biggest personal income tax overhaul Nigeria has seen in years. The CRA is gone. The PITA bands are gone. The tax-free threshold is now ₦800,000. And the penalty for getting it wrong lands on your business.
The good news: once your payroll is updated to the NTA 2025 numbers, the system actually makes more sense than the old one. Fewer bands, cleaner thresholds, and a real zero-rate floor for lower earners.
Get the numbers right now — before the 10th of next month.
Sort your payroll on lint.finance — ₦500 per employee per run, taxes included.
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Last updated: May 2026
Regulatory sources: Nigeria Tax Act 2025 (Sixth Schedule); Pension Reform Act 2014; National Housing Fund Act; NHIA Act 2022; Nigeria Revenue Service (nrs.gov.ng)
Lint pricing: lint.finance (as at April 2026)
This post is for information only and does not constitute legal or tax advice. Consult a qualified tax professional for your specific situation.
Related on Lint
- Free PAYE Calculator (2026) — see take-home pay, tax and pension in seconds.
- Lint Payroll — run salary, PAYE, pension and salary advances in one funded run.
