6 tax brackets with ₦800,000 tax-free threshold (2026 Tax Reform)
Nigeria's 2026 game-changer: ₦800,000 tax-free threshold (up from ₦300,000). Rates 0-25%. Old CRA replaced by 20% rent relief (up to ₦500,000). FIRS becoming AI-driven NRS. Filing deadline: March 31. ₦100K penalty for late filing. A ₦3M earner pays ~₦330,000 tax (~11%).
Nigeria implemented major tax reform effective January 1, 2026, under the Nigeria Tax Act 2025. The new system introduces a generous ₦800,000 tax-free threshold (up from ₦300,000), meaning anyone earning below this pays no income tax. Rates range from 0% to 25%, with the top rate only applying to income above ₦50 million. The old Consolidated Relief Allowance (CRA) has been replaced by a simpler rent relief of up to ₦500,000. Use our PAYE calculator to estimate your Nigerian tax under the new system.
| Taxable Income | Tax Rate |
|---|---|
| ₦0 - ₦800,000 | 0% (tax-free) |
| ₦800,001 - ₦3,000,000 | 15% |
| ₦3,000,001 - ₦12,000,000 | 18% |
| ₦12,000,001 - ₦25,000,000 | 21% |
| ₦25,000,001 - ₦50,000,000 | 23% |
| Over ₦50,000,000 | 25% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
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Get Paid as a Contractor →Nigeria's 2026 tax brackets are: 0% on income up to ₦800,000 (tax-free), 15% on ₦800,001-₦3 million, 18% on ₦3-₦12 million, 21% on ₦12-₦25 million, 23% on ₦25-₦50 million, and 25% on income above ₦50 million. These rates took effect January 1, 2026.
The new tax-free threshold is ₦800,000 annually (about ₦66,667 monthly). If you earn ₦800,000 or less per year, you pay zero income tax. This is a significant increase from the previous ₦300,000 threshold under the old system.
The CRA was abolished under the Nigeria Tax Act 2025. It has been replaced by a simpler 'rent relief' system where you can deduct 20% of your annual rent paid, up to a maximum of ₦500,000. This relief is applied before calculating your taxable income.
The annual income tax return deadline in Nigeria is March 31 of the following year. For 2025 income, file by March 31, 2026. Late filing attracts a penalty of ₦100,000 in the first month, then ₦50,000 per month thereafter. False declarations can result in fines up to ₦1 million or imprisonment.
The Federal Inland Revenue Service (FIRS) is transitioning to the Nigeria Revenue Service (NRS) as part of the 2026 tax reforms. The new agency will use AI-driven tools to detect underreporting and cross-reference taxpayer data. This is part of Nigeria's broader effort to modernize tax collection.
Last Updated: March 2026