PAYE
This page explains how PAYE (Pay As You Earn) is calculated. The short version: you don’t calculate it — Zinye recomputes it automatically every time a payslip is saved, using the Nigeria Tax Act 2025 bands.
The tax bands (2025, annual)
Section titled “The tax bands (2025, annual)”| Annual taxable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 | 15% |
| Next ₦9,000,000 | 18% |
| Next ₦13,000,000 | 21% |
| Next ₦25,000,000 | 23% |
| Above ₦50,000,000 | 25% |
What’s deducted before tax (s.30)
Section titled “What’s deducted before tax (s.30)”These reduce taxable income before the bands are applied:
- Pension (employee contribution)
- NHF contributions
- NHIS contributions
- Home-loan interest (if entered on the payslip)
- Life-assurance premiums (if entered)
- Rent relief — 20% of annual rent paid, capped at ₦500,000
Minimum-wage exemption
Section titled “Minimum-wage exemption”Employees earning ₦70,000/month or less pay zero PAYE (Nigeria Tax Act 2025, s.162). When this applies, Zinye shows a notice on the payslip.
Worked example
Section titled “Worked example”For an employee on ₦230,000/month gross (Basic ₦150k + Housing ₦50k + Transport ₦30k):
| Annual | |
|---|---|
| Gross pay | ₦2,760,000 |
| Less pension (8%) | −₦220,800 |
| Less NHF (2.5% of basic) | −₦45,000 |
| Taxable income | ₦2,494,200 |
| First ₦800,000 @ 0% | ₦0 |
| Next ₦1,694,200 @ 15% | ₦254,130 |
| Annual PAYE | ₦254,130 |
| Monthly PAYE | ₦21,177.50 |
Seeing it on a payslip
Section titled “Seeing it on a payslip”- Open a salary slip.
- In Deductions, the NG - PAYE Tax row shows the computed amount.
- Run the Nigeria PAYE Schedule report for your monthly remittance file — see Compliance reports.