Nigerian tax, worked out properly
Payroll under the Nigeria Tax Act 2025
Six employees, February 2026. Every figure below is from a real pay run in the demo business.
These are real figures from a demo business, not a mock-up of something that does not exist.
The run
Pay run PR-2026-00002
February 2026 · 6 people · paid
Gross
₦2,356,000.00
PAYE
₦286,626.25
Pension
₦177,280.00
NHF
₦1,625.00
Net pay
₦1,890,468.75
Cost to the business
₦2,624,720.00
The true cost is 11% above the gross once employer pension, NSITF and ITF are counted. Most businesses do not know that number.
The payslip
Payslip — Adebayo Ogunlesi
Managing Director · February 2026
Gross
₦1,200,000
PAYE
₦177,270
Pension
₦88,000
Net pay
₦934,730
| The workings | |
|---|---|
| Gross for the year | 14,400,000 |
| Rent relief | 500,000 |
| Taxable | 12,844,000 |
| PAYE for the year | 2,127,240 |
He declared ₦4.8m of rent. Twenty per cent would be ₦960,000, but the Act caps relief at ₦500,000 — so that is what he gets. FreshExe applies the cap without being told.
The thing that stops a mistake
Pay the staff — PR-2026-00002
Bank file for February 2026
| Employee | Account | Net pay |
|---|---|---|
| Adebayo Ogunlesi | ····4821 | ₦934,730.00 |
| Funmi Alabi | ····9903 | ₦412,608.75 |
| Chidi Eze | — | ₦— |
The payment is not refused, because people are genuinely paid in cash. But nobody finds out on payday.