Understanding personal income tax (PIT) in Nigeria can feel confusing, especially if you’re a freelancer or small business owner. But once you break it down, it’s actually straightforward.

What is Personal Income Tax?

Personal Income Tax is the tax you pay on your earnings — whether from salary, freelance work, or business income.

How Tax is Calculated in Nigeria

Nigeria uses a progressive tax system, meaning:

The more you earn, the higher your tax rate

But before tax is calculated, you get something called Consolidated Relief Allowance (CRA).

Step-by-Step Example

Let’s say you earn ₦500,000 monthly (₦6,000,000 yearly):

• Deduct CRA
• Apply tax bands
• Sum up the tax

After calculation, your actual tax is much lower than you think.

Common Mistake

Many Nigerians:

• overestimate their tax
• or don’t calculate it at all

Final Tip

Instead of doing all this manually:

👉 Use Taxeazi to calculate your tax instantly and accurately