Pay at the minimum wage and the exemption.
Monthly pay
—
Annual pay
—
PAYE on tested gross
—
The wage floor and the tax it switches off
Nigeria did two things in quick succession that this tool ties together. The National Minimum Wage Act of 2024 set a new floor, and as modelled here that figure is NGN 70,000 a month, which works out to NGN 840,000 across a full year. Then the 2025 tax reform added a quiet but generous rule for the lowest earners. A worker whose annual employment income sits at or below the national minimum wage pays no personal income tax at all. So the floor is not just a pay number, it is also the line below which PAYE disappears. This page lets you scale the wage by a multiple, useful for sketching what a band of staff costs, and separately tests any gross figure to see whether it clears that exemption.
These are the figures the calculator applies, not numbers I am certifying as fixed law. The reform is still phasing in, the Federal Inland Revenue Service is being renamed the Nigeria Revenue Service, and wage and threshold reviews happen, so confirm the current minimum wage and the exemption ceiling with the FIRS and your state internal revenue service before you rely on them for payroll.
How the exemption test runs
The monthly and annual pay figures are straightforward multiplication. Enter a multiple of one and you get the bare minimum wage, enter two and you get double, and so on. The PAYE check is the interesting part. The tool feeds your tested gross straight into the personal income tax bands, applying no reliefs in this particular calculation, and then applies the exemption cliff. If the gross is at or below NGN 840,000, the answer is zero, full stop. The moment it goes a naira over, the ordinary bands take over and tax is charged on chargeable income in the usual progressive way. There is no taper here, it is a hard switch, which is exactly why the cliff is worth understanding.
Two staff, one just over the line
Picture two workers. The first earns the minimum wage exactly, NGN 840,000 a year. The second earns double, NGN 1,680,000 a year, which the tool treats as a multiple of two. Using the rates this calculator applies, the first pays nothing because the income lands on the exemption ceiling. The second is over the line, so PAYE applies. The first NGN 800,000 of chargeable income is taxed at 0 percent, and the slice from NGN 800,000 up to NGN 1,680,000, which is NGN 880,000, is taxed at the 15 percent band rate. That gives NGN 132,000 for the year.
| Worker | Annual gross | PAYE for the year |
|---|---|---|
| On the minimum wage (1x) | NGN 840,000 | NGN 0 (exempt) |
| Double the minimum (2x) | NGN 1,680,000 | NGN 132,000 |
| First 800,000 at 0 percent | NGN 800,000 | NGN 0 |
| Next 880,000 at 15 percent | NGN 880,000 | NGN 132,000 |
The chart sets the two workers side by side. The teal portion is take-home, the grey portion on the second bar is the PAYE that the exemption no longer shelters.
A caution on what the exemption covers
The exemption is built around employment income, so a salaried worker on or under the floor is clear. It does not automatically wipe out tax on unrelated income such as rental receipts or business profit, which follow their own rules. There is also a subtle point employers miss. The PAYE figure this tool shows is calculated on the gross with no pension, no National Housing Fund, and no rent relief netted off, so it is a clean illustration of the bands, not a full payslip. Once you layer in the deductions a real employee can claim, the chargeable income, and therefore the tax, usually falls below the figure shown here. For an end-to-end payslip, move to the take-home pay calculator. If your state revenue service publishes its own guidance on low-income exemptions, follow that, because administration sits at state level.
If I get a small raise above the minimum wage, do I lose money?
No, you keep more in your pocket, just not the whole raise. Because the first NGN 800,000 of chargeable income is still taxed at 0 percent under the rates this calculator applies, only the slice above that is taxed, and at 15 percent to start. A worker nudged from NGN 840,000 to, say, NGN 900,000 pays tax on a sliver, not on the whole salary, so net pay still rises. The cliff removes the blanket exemption, it does not claw back your earlier pay.
Is the minimum wage the same in every state?
The national figure the calculator applies is a floor that applies countrywide, and states cannot legally pay below it. Some states and larger employers choose to pay above it. For tax, administration is handled by each state internal revenue service, so while the exemption rule is national, always confirm how your own state applies it.