PAYE on a ₦500,000 monthly salary, worked through

On a monthly salary of ₦500,000 (₦6,000,000 a year), your PAYE under the 2026 bands is ₦65,000 a month, if you claim the full ₦500,000 rent relief. Without rent relief, it is ₦72,500 a month. This working assumes the ₦500,000 rent relief case unless stated otherwise. If your payslip shows a much bigger deduction than either figure, the payroll is probably still running the old Consolidated Relief Allowance, which is gone.

The Working, Band by Band

Start with annual gross pay: ₦500,000 x 12 = ₦6,000,000.

The only relief still standing for most salary earners is rent relief: 20% of annual rent, capped at ₦500,000. To show how the cap works, this article assumes rent of ₦2,500,000 a year. That figure is not a typical rent for someone on this salary. It is an illustrative number, chosen only because it is the exact annual rent that produces a 20% relief of ₦500,000, which is the cap. 20% of ₦2,500,000 is ₦500,000, so rent relief = ₦500,000.

Taxable income = ₦6,000,000 - ₦500,000 = ₦5,500,000.

Now apply the 2026 bands to that ₦5,500,000:

Total annual tax = ₦0 + ₦330,000 + ₦450,000 = ₦780,000.

Monthly PAYE = ₦780,000 / 12 = ₦65,000.

That is the reliable monthly PAYE figure for a ₦500,000 salary with ₦500,000 in rent relief. The safest way to see your own exact number, using your actual rent relief and any other structured allowances, is to run it through the /calculator, since small changes in declared rent change which band your last naira falls into.

Why Payroll Often Gets This Wrong

The Consolidated Relief Allowance is gone. It no longer applies to anyone's pay from the point the new bands took effect. If your payslip still shows a CRA line item, or your tax is calculated on a taxable income figure that has had CRA subtracted before the bands are applied, you are being over-deducted, sometimes by a wide margin, because CRA used to shrink your taxable income by a lot more than rent relief now does.

The fix is simple to describe and slightly annoying to execute: ask your HR or payroll provider to confirm the reliefs they are applying and get them to run your slip against the 2026 bands directly, with only rent relief (and any other relief still in force) deducted. If they cannot explain what they are deducting and why, that is your signal to check the numbers yourself.

What Rent Relief Actually Needs

Rent relief is 20% of your annual rent, capped at ₦500,000. Two things follow from this cap:

If you pay ₦2,500,000 or more in annual rent, your relief is capped at ₦500,000 regardless of how much more you pay.

If you pay less than ₦2,500,000 a year, your relief is 20% of whatever you actually pay, and it will be less than ₦500,000.

This matters because your PAYE is not a flat percentage of ₦500,000 a month. It depends on your actual documented rent, and payroll needs proof to apply it correctly. HR will accept a tenancy agreement together with a rent receipt, both dated within the tax year, as proof of rent. If you have never submitted these documents, you may be paying tax on a taxable income figure that is higher than it should be.

What a ₦500,000 Salary Owes At Different Rent Levels

Since rent relief changes your taxable income, here is how the annual tax bill shifts depending on what you declare, still working from ₦6,000,000 gross:

(For the ₦0 and ₦1,000,000 rows, the last portion of income falls in the 18% band up to ₦12,000,000, since ₦5,800,000 and ₦6,000,000 both sit below that threshold, so the working is: 15% on the ₦2,200,000 between ₦800,000 and ₦3,000,000, then 18% on the remainder above ₦3,000,000 up to the taxable income figure.)

The pattern is clear: the more rent relief you can document, up to the ₦500,000 cap, the lower your monthly PAYE. It is worth getting your tenancy agreement in order, along with a matching rent receipt, and handing both to payroll, since HR needs these two documents, dated within the tax year, before it will apply the relief. The difference between declaring nothing and hitting the cap is ₦7,500 a month in this example, which adds up over a year.

Filing Dates That Matter Here

As an employee, you do not usually file anything yourself since your employer deducts and remits PAYE monthly. But a few dates still matter if you have other income, run a side business, or want to confirm your employer is compliant:

Monthly PAYE remittance by employers is due by the 10th of the following month.

The employer's annual PAYE return is due by 31 January.

If you file personal income tax returns yourself (for other income sources), the deadline is 31 March.

What To Do Next

If your payslip does not match this working, the first step is to check exactly what your payroll is deducting and why, particularly whether CRA has quietly survived somewhere in their system. Confirm your tax identity is correctly set up using /find-tax-id, then run your own numbers, with your actual rent figure, through the /calculator to see what you should be paying. If the gap between what you are paying and what you should be paying is large, it is worth raising it with HR directly, with the working and your tenancy agreement and rent receipt in hand.

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