Methodology
How we calculate, and where each number comes from
Every rate on this site is a named constant in one file with its source beside it. This page shows the formulas in plain words so an accountant can check them and a business owner can see there is nothing hidden.
- Updated September 2026
Review policy
Figures were last reviewed on 2026-09-03 against the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Deduction of Tax at Source (Withholding) Regulations 2024 and Nigeria Revenue Service notices. We re-check quarterly and whenever a law, regulation or NRS notice changes a rate, and we record each change in the changelog. If you find an error, write to hello@ereqa.net; we fix it and say so.
PAYE
Source: Nigeria Tax Act 2025, personal income tax schedule, in force 1 January 2026.
- Gross annual income = monthly gross × 12 (or the annual figure you enter).
- Pension = 8% of basic, housing and transport. You set what share of gross those three make up; the default is 80%.
- Rent relief = the lower of 20% of annual rent paid and ₦500,000.
- Chargeable income = gross − pension − rent relief. NHF, NHIS and life assurance are also deductible with evidence; the calculator leaves them out unless you fold them into the pension share.
- Tax = the bands below applied cumulatively to chargeable income. Monthly PAYE = annual tax ÷ 12.
- If monthly gross is at or below ₦70,000, the national minimum wage, PAYE is zero.
| Band of annual chargeable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 | 15% |
| Next ₦9,000,000 | 18% |
| Next ₦13,000,000 | 21% |
| Next ₦25,000,000 | 23% |
| Above the previous bands | 25% |
VAT
Source: Nigeria Tax Act 2025, which kept the standard rate at 7.5%.
- Add: VAT = net × 0.075; gross = net × 1.075.
- Remove: net = gross ÷ 1.075; VAT = gross − net.
- Businesses with turnover at or below ₦50,000,000 are small companies under the Tax Act and do not register for or charge VAT. The Administration Act uses ₦100 million; we show the lower figure and say the gap is unresolved.
Withholding tax
Source: Deduction of Tax at Source (Withholding) Regulations 2024, in force 1 January 2025, as summarised in the published schedules.
- WHT = gross payment (before VAT) × rate for the payment type and recipient type.
- No TIN: rate × 2.
- Net to vendor = gross − WHT. Remittance due on the 21st of the month after payment.
- A small company paying a vendor with a TIN may skip deduction on payments under ₦2,000,000; the calculator flags that case.
| Payment | Company | Individual |
|---|---|---|
| Professional, consultancy or management fees | 5% | 5% |
| Commission or brokerage | 5% | 5% |
| Supply of goods or materials | 2% | 2% |
| General services (non-professional) | 2% | 2% |
| Construction (roads, bridges, buildings) | 2% | 2% |
| Other construction and installation | 5% | 5% |
| Rent, hire or lease | 10% | 10% |
| Dividend or interest | 10% | 10% |
| Royalty | 10% | 5% |
| Directors' fees | 0% | 15% |
Company income tax and development levy
Source: Nigeria Tax Act 2025. Small companies, turnover ₦50 million or less and fixed assets ₦250 million or less, pay 0% and no development levy; professional services firms are excluded from small-company treatment. Other companies pay 30% plus a 4% development levy on assessable profits. We publish these as a table and do not calculate company tax, because assessable profit depends on adjustments and capital allowances that need the accounts.
Documents
Invoice, proforma, quotation, purchase order and credit note totals are subtotal + VAT (if switched on) with deposit and balance shown where they apply. Withholding is never deducted on the document, because the payer deducts it at payment; the invoice shows the gross amount and the TIN that lets the payer remit correctly.
Bank statement converter
Text is extracted from the PDF in your browser with positions. Lines that start with a date become transactions; the last amount on the line is the running balance; debit and credit are assigned by column position when a header is found and by balance movement otherwise. Every row is checked: previous balance + credit − debit must equal the new balance, and the percentage that reconciles is shown before you download. Nothing is uploaded.
What we do not do
We do not give advice on your circumstances, we do not model reliefs that need evidence we cannot see, and we do not calculate company income tax from a turnover figure. Confirm your position with a qualified adviser or the NRS before filing.