PULSE EXPLAINER: How to use Nigeria’s new personal income tax calculator—with practical examples

Filing taxes in Nigeria has always been a headache for many people, from unclear deductions on payslips to complex forms that most citizens don’t fully understand. Under the old tax structure, workers often relied on HR departments or accountants to figure out their Pay-As-You-Earn (PAYE) obligations, while small business owners struggled to keep up with filing requirements.

Now, with President Bola Tinubu’s ongoing tax reforms, the Federal Government has promised a simpler, more transparent process that will widen the tax net without overburdening honest taxpayers. These reforms aim to cut leakages, increase government revenue, and ensure that taxation is fairer across income levels.

But for everyday Nigerians, the big question remains the same: “How much tax am I really paying?”

EXPLORE: What the new tax laws mean for you if you earn ₦1M+ monthly

That’s where the newly launched Tax Calculator comes in. Designed to demystify the process, the tool allows workers, freelancers, and business owners to input their income details and instantly see their exact tax obligations, no guesswork, no hidden charges.

In this guide, we’ll show you step by step how to use the calculator, with practical examples and screenshots to walk you through the process.

Let's get started…

The Personal Income Tax Calculator is designed to help you see exactly how Nigeria’s current tax rates compare with the proposed reforms. It shows you, side by side, the amount you’d pay under the old structure and what the new tax bill could mean for your take-home pay.

👉🏽 You can try it here: Nigeria Tax Calculator

Keep in mind that this is only a simulation. Your actual tax liability may be lower once statutory deductions, such as pension contributions and the National Housing Fund (NHF), are factored in.

In the income box, type your annual gross income (payment before deductions). For our illustration, we’re using a N200,000 monthly income earner, which comes to N2,400,000 annually.

At this stage, you can include additional deductions, such as pension contributions, life insurance, annual rent, National Housing Fund (NHF) contributions, and National Health Insurance Scheme (NHIS) contributions.

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These deductions are important because the tax office considers them when calculating your final tax liability. The more eligible deductions you declare, the lower your taxable income, which could mean paying less tax overall.

Having done that, you click the ‘Calculate PAYE tax comparison’ button.

After the calculations. The results will instantly show:

Old Law: What was applicable under Nigeria’s previous tax structure.

New Law: What You’d Pay Under the Reformed Tax Structure

For a ₦200,000 monthly salary, you’ll see the difference in total tax due and how much take-home pay remains.

Conclusion: Under the reformed tax law, an individual earning ₦200,000 monthly will pay ₦766.67 less in tax and take home an extra ₦766.67 each month compared to the old tax system.

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