Which of the six bands your income falls in.
Income tax
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Marginal rate
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Effective rate
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Tax by band
Why your "tax bracket" is not the rate you pay
People talk about being "in the 18 percent bracket" as though every naira they earn is taxed at 18 percent. It is not. Nigeria runs a progressive system, which means your income is sliced into bands and each slice is taxed at its own rate. Only the top slice sits in your highest band. Everything below it is taxed more gently, and the very first chunk is not taxed at all. This calculator takes one number, your chargeable annual income, and shows you both rates that matter: the marginal rate on your last naira and the effective rate across the whole amount. Knowing the gap between them is what stops you from overestimating the tax on a raise.
The six bands this tool applies
Under the structure modelled here, chargeable income climbs through six steps. The first NGN 800,000 is taxed at 0 percent, a genuine tax-free floor. The next NGN 2.2 million, taking you to NGN 3 million, is taxed at 15 percent. From NGN 3 million to NGN 12 million the rate is 18 percent, then 21 percent up to NGN 25 million, 23 percent up to NGN 50 million, and 25 percent on anything above NGN 50 million. These are the bands and rates the calculator applies, drawn from the 2025 reform that replaced the older scale. Because that reform is still settling, treat each figure as the one this tool uses and confirm the current bands with the FIRS (Federal Inland Revenue Service) and your state internal revenue service, which assesses personal income tax for most individuals.
An income of NGN 6 million, band by band
Run NGN 6 million of chargeable income through the bands and the slicing becomes concrete. The first NGN 800,000 is free. The next NGN 2.2 million is taxed at 15 percent, giving NGN 330,000. The remaining NGN 3 million, which falls into the 18 percent band, adds NGN 540,000. Total tax is NGN 870,000. Notice the headline: your marginal rate is 18 percent because your top naira sits in that band, but your effective rate, the tax divided by the full NGN 6 million, is only 14.50 percent. The gap is the whole point of a progressive scale.
| Band | Income in band | Tax |
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The chart stacks the three slices of this NGN 6 million income, sized to the tax each one carries. The tall block is the 18 percent slice, the middle block is the 15 percent slice, and the flat base is the tax-free floor that contributes nothing.
Reading your raise the right way
The most useful thing this tool kills is the fear that crossing into a higher band somehow taxes all your income at the new rate. It does not. If a raise pushes you from NGN 11.9 million to NGN 12.1 million, only the NGN 100,000 above the NGN 12 million line is taxed at the higher 21 percent step; everything beneath stays where it was. So a raise always leaves you with more take-home, never less. The figure to watch is your marginal rate, because that is what each extra naira of bonus or overtime is taxed at, and it is also the rate at which any deductible relief saves you tax.
Should I enter gross pay or chargeable income?
Chargeable income, which is your gross income after the deductions the law allows, such as pension, the National Housing Fund and rent relief. If you type your full gross salary you will overstate the tax, because the bands apply to the figure left after those reliefs are stripped out. Work out your reliefs first, subtract them, and feed the result here. The dedicated relief and chargeable-income tools on this site do that subtraction for you.
Why is my effective rate so much lower than my band?
Because the tax-free floor and the lower bands drag the average down. Every taxpayer gets the first NGN 800,000 free and the next slices at 15 and 18 percent before any higher rate applies. The more of your income that sits in those early bands, the wider the gap between your top band and your effective rate. Only someone earning far into the NGN 50 million-plus band sees their effective rate creep close to the marginal one. Confirm the live band thresholds with your state revenue service, since the reform may shift them.