How to Calculate Your PAYE Tax in Nigeria: Step-by-Step Guide

Introduction

Chioma just received her first payslip from her new job at a marketing agency in Lagos. Her gross salary was ₦150,000, but she only received ₦137,033 in her bank account. When she asked her HR manager about the difference, she was told it was "PAYE tax deduction." But Chioma had no idea how that amount was calculated or whether it was correct.

If you're like Chioma, you've probably wondered: How exactly does my employer calculate the tax deducted from my salary each month? This question keeps many Nigerian employees up at night, worried they might be paying too much—or worse, that errors could lead to tax problems later.