Financial Templates for Nigeria

Nigeria operates a Pay As You Earn (PAYE) system for employees, and the tax year follows the calendar year. The Nigeria Tax Act 2025 took effect on 1 January 2026 and reset the bands. For the 2026 tax year the first NGN 800,000 of annual taxable income is taxed at 0%, the next NGN 2.2 million at 15%, the next NGN 9 million at 18%, the next NGN 13 million at 21%, the next NGN 25 million at 23%, and anything above NGN 50 million at 25%. Anyone earning at or below the national minimum wage of NGN 70,000 a month is outside PAYE entirely.

The same Act removed the Consolidated Relief Allowance that had shaped Nigerian payslips for years. In its place sits a rent relief worth the lower of NGN 500,000 or 20% of annual rent actually paid, claimable only where the rent is properly declared. Pension, National Housing Fund and health insurance contributions remain deductible before tax is worked out. In practice compliance and enforcement still vary, and many workers in the informal sector may not interact with the formal tax system at all.

The Contributory Pension Scheme (CPS) applies to employers with 15 or more employees, who must enrol staff in a Retirement Savings Account (RSA) held with a Pension Fund Administrator (PFA). The statutory minimums are 8% of monthly emoluments from the employee and 10% from the employer, a combined 18%. National Housing Fund deductions of 2.5% of monthly income remain compulsory for public sector employees, while private sector employees are no longer required to comply. These deductions reduce take-home pay and are the main formal retirement saving route for salaried workers.

Healthcare is a mix of public facilities, private hospitals and out-of-pocket spending. The National Health Insurance Authority (NHIA) runs schemes covering formal sector employees, organised private sector workers, the self-employed and vulnerable groups, but a large share of Nigerians still pay directly for medical care. Health costs can be unpredictable, which is one reason some households carry a standing medical line in their budget rather than treating it as an occasional surprise.

The naira has seen sharp exchange rate movement and heavy inflationary pressure since the Central Bank of Nigeria shifted to a more market-determined rate in 2023. Price growth has cooled from its peak, running at roughly 15% year on year through mid-2026 with the CBN's monetary policy rate at 26.50%, though food inflation has stayed higher than the headline figure. Imported goods still reprice quickly, so budgets written in naira tend to be revisited more often than in stable-currency economies. Fuel, generator running costs from inconsistent power supply, and transport are common household categories that reflect daily life in the country.