Tax Guide for First-Time Filers

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