Minimum wage tax exemption
Employees in Nigeria earning at or below the national minimum wage of ₦70,000 a month (₦840,000 a year) are exempt from PAYE. The exemption removes the tax burden from the lowest earners entirely.
Worked example
An employee on exactly ₦70,000 a month pays no PAYE and takes home the full ₦70,000. An employee on ₦100,000 a month is above the threshold and pays ₦5,000 a month, an effective rate of 5%.
How it interacts with the 0% band
Separately from the exemption, the first ₦800,000 of taxable income is taxed at 0% under the 2026 bands. This is why tax rises gently rather than jumping at the threshold: someone just above minimum wage still pays very little.
More Nigerian tax terms
- Company Income Tax (CIT)
- Consolidated Relief Allowance (CRA)
- Development Levy
- Direct assessment
- FIRS (Federal Inland Revenue Service)
- Input VAT
- Output VAT
- PAYE (Pay-As-You-Earn)
- Personal Income Tax (PIT)
- Rent relief
- Tax Clearance Certificate (TCC)
- Tax Identification Number (TIN)
- Value Added Tax (VAT)
- Withholding Tax (WHT)
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