Nigeria 2026: rent relief, pension and NHF, and what replaced the CRA
Under the Nigeria Tax Act 2025 the tax on pay is worked out after a short list of deductions. The old Consolidated Relief Allowance (CRA) is gone and rent relief now stands in its place for people who pay rent. This guide sets out each deduction the calculators use, with the rate and the cap, and one worked example. It sets out the calculation and its sources.
What replaced the CRA
Until 2025 every employee got a relief of the higher of ₦200,000 or 1% of gross pay, plus 20% of gross pay, whether or not they paid rent. From 2026 that relief no longer exists. In its place the first ₦800,000 of chargeable income is tax-free, and the only relief based on spending is rent relief. For ₦500,000 a month and the 8% pension, the old relief was ₦1,400,000.00 a year.
Rent relief
An individual may deduct 20% of the annual rent actually paid, up to ₦500,000 a year, whichever is lower. The cap is reached at annual rent of ₦2,500,000, that is ₦208,333 a month. The rent must be declared accurately and the tax authority may ask for proof. With no rent, the relief is nil, which is what the salary pages assume.
| Annual rent paid | Rent relief (20%, at most ₦500,000) | Chargeable income | PAYE a month | Net pay a month |
|---|---|---|---|---|
| ₦0 | ₦0.00 | ₦5,520,000.00 | ₦65,300.00 | ₦394,700.00 |
| ₦1,200,000 | ₦240,000.00 | ₦5,280,000.00 | ₦61,700.00 | ₦398,300.00 |
| ₦3,000,000 | ₦500,000.00 | ₦5,020,000.00 | ₦57,800.00 | ₦402,200.00 |
At ₦1,200,000 of rent a year the relief is ₦240,000.00 and PAYE falls from ₦65,300.00 to ₦61,700.00 a month. At ₦3,000,000 of rent the relief stops at the ₦500,000 cap and PAYE is ₦57,800.00 a month. Because the relief is taken off income taxed at 18% here, its value is 18% of the relief.
Pension
Under the Pension Reform Act 2014 the employee pays at least 8% of monthly emoluments and the employer at least 10%. Emoluments mean basic salary, housing and transport. The employee's contribution is deducted before tax. The calculators take the whole salary you enter as emoluments, so if part of your pay is outside those three items the real deduction is smaller. At ₦500,000 a month the employee contribution is ₦40,000.00.
NHF and NHIS
The National Housing Fund contribution is 2.5% of monthly basic salary. NHIS contributions are also listed among the deductions. The rate used here for the NHIS employee share, 5% of basic salary, is the one usually quoted for the formal sector programme and is not confirmed on an official page. Whether either one is taken from your pay depends on the employer, so both are switched off unless you tick them. Both lower chargeable income when they apply.
All of it together
Here is the salary of ₦500,000 a month with the 8% pension, NHF at 2.5% of a ₦250,000 basic salary, and ₦1,200,000 of annual rent:
| Step for a salary of ₦500,000 a month | Amount |
|---|---|
| Gross pay for the year | ₦6,000,000.00 |
| Less pension (8% of ₦500,000 x 12) | ₦480,000.00 |
| Less NHF (2.5% of a ₦250,000 basic x 12) | ₦75,000.00 |
| Less rent relief on ₦1,200,000 of rent | ₦240,000.00 |
| Chargeable income | ₦5,205,000.00 |
| Tax for the year | ₦726,900.00 |
| PAYE a month | ₦60,575.00 |
| Net pay a month (after pension, NHF and PAYE) | ₦393,175.00 |
Compared with the pension-only case, PAYE is ₦4,725.00 a month lower, while NHF takes ₦6,250.00 a month out of pay. Net pay is ₦393,175.00.
Not included
Life insurance and annuity premiums and interest on a home loan for an owner-occupied house are deductions under the Act as described by the articles read, but they are not modelled. Overtime, allowances, bonuses and benefits in kind are not included either. The Act and agency pages could not be opened from this machine, so the figures here come from secondary guides; the Sources and rates page lists each one.
Work out your own net paySources
- Legal500 article: personal income tax under the Nigeria Tax Act 2025 (section 30(2)(a) deductions)
- Forvis Mazars Nigeria: rent relief under the 2025 Nigeria Tax Act
- PwC Worldwide Tax Summaries: Nigeria individual deductions (the consolidated relief allowance before 2026)
- National Pension Commission (PenCom): Pension Reform Act 2014 rates, page not opened
- Payroll guide: Nigeria PAYE 2026 (pension 8%, NHF 2.5%)
- Every rate used, with its source and check date: Sources and rates
This calculator is general information only. It uses the pages listed on the Sources page, and your payslip and personal situation may differ. Rates as at 2 November 2026.