Who Needs to Pay Tax in Nigeria?
If you earn income in Nigeria, you're likely required to pay tax. This includes:
- Employees earning a salary (PAYE is deducted automatically)
- Freelancers and contractors earning from services
- Business owners with registered companies
- Landlords earning rental income
- Investors earning dividends or capital gains
The Good News: Minimum Wage Earners Are Exempt
Under the Nigeria Tax Act 2025, if you earn ₦800,000 or less per year (about ₦66,667/month), you pay 0% income tax. This is a major win for minimum wage earners.
Understanding Your Tax Obligations
For Employees (PAYE)
Your employer handles everything:
- Deducts tax from your salary monthly
- Remits it to the tax authority
- Issues you a tax receipt at year end
Your job: Keep your payslips and tax receipts safe.
For Self-Employed / Freelancers
You're responsible for:
- Registering with your State Internal Revenue Service
- Filing annual tax returns
- Paying estimated taxes quarterly
Key Documents You Need
- TIN (Tax Identification Number) - Get this from FIRS or your state tax office
- BVN - Required for tax registration
- Employment letter or business registration
- Bank statements showing income
Common Deductions You Can Claim
These reduce your taxable income:
- Pension contributions (up to 8% of basic salary)
- NHF contributions (2.5% of basic)
- Life insurance premiums
- NHIS contributions
Use our Deduction Finder to see what you're missing.
Next Steps
- Check if you have a TIN - if not, get one here
- Use our PIT Calculator to estimate your tax
- Keep all income and expense records
- File your returns by March 31st each year