Before you start

A taxpayer registration with LIRS and a tax identification number
A determination of whether you are Nigerian tax-resident
Employment records or business accounts
Evidence of rent paid, if claiming rent relief

Step-by-step

1
Work out your residence position under the 2025 Act, not the old one
You are resident if you spend 183 days or more in Nigeria in any 12-month period — but also if you maintain a permanent home here, or have significant economic or family ties. The Act deliberately widened the test. Residents are taxed on worldwide income; non-residents only on Nigerian-source income.
OnlineWho: You
2
Register with LIRS as a Lagos resident
Personal income tax follows your state of residence, not your employer's address. Living in Lagos means registering with the Lagos State Internal Revenue Service, which runs the country's most developed e-filing system.
OnlineWho: YouFirst month
3
Check your payslip against the 2026 bands
From 1 January 2026 the bands are 0% on the first NGN 800,000, then 15%, 18%, 21%, 23% and a top rate of 25% above NGN 50 million, applied progressively. Employees on the national minimum wage are outside PAYE altogether. Payroll systems were rewritten for this and errors in the first year are common.
Via employerWho: You
4
Claim the rent relief with documentation
The Act introduces a relief of 20% of annual rent paid on residential accommodation, capped at NGN 500,000. In a city where rent is paid a year or two at a time, keeping the tenancy agreement and receipts is what turns this into money. It is claimed in writing with documentation, not applied automatically.
OnlineWho: You
5
File an annual return even as a PAYE employee
The Nigeria Tax Administration Act 2025 requires individuals to file an annual return with the state revenue service of their residence. PAYE deduction by your employer does not remove your own filing obligation, and the tax clearance certificate that follows is asked for constantly.
OnlineWho: YouAnnually
6
Get the tax clearance certificate and keep it current
A LIRS tax clearance certificate is requested by landlords, schools, immigration for permit renewals and licensing bodies. It is issued on the strength of your filings, so a gap in filing becomes a blocked transaction months later.
OnlineWho: You

Documents you’ll need

Taxpayer identification and LIRS registration
Annual payslips and the employer's PAYE records
Tenancy agreement and rent receipts, for rent relief
Records of foreign income if you are resident
Pension, NHF and health insurance deduction evidence

Things most newcomers don’t know

The Consolidated Relief Allowance is gone, and guidance that still mentions it is describing a system that ended in 2025.

For years Nigerian personal tax computation started with the Consolidated Relief Allowance — a fixed amount plus 20% of gross income — before applying rates from 7% to 24%. The Nigeria Tax Act 2025 replaced that structure entirely from 1 January 2026 with a zero band on the first NGN 800,000, six progressive bands to a 25% top rate, and a targeted rent relief. Any calculator, payroll template or article built on CRA now produces the wrong number.

Source: Nigeria Tax Act 2025

The rent relief is worth having and it requires paperwork you would otherwise throw away.

The Act allows 20% of annual rent paid for residential accommodation as a relief, capped at NGN 500,000 a year, for both PAYE employees and self-employed people. Because Lagos rent is paid a year or two in advance in a single transaction, the tenancy agreement and the receipt are the entire evidence base and there is no monthly trail to fall back on. Get a receipt at the moment of payment and keep the agreement.

Source: Nigeria Tax Act 2025

Staying under 183 days no longer keeps you non-resident.

The 2025 reform widened individual residence beyond the day count: maintaining a permanent home in Nigeria, or having significant economic or family ties here, can establish residence independently. Anyone splitting time between Lagos and elsewhere — and particularly anyone whose family lives in Lagos while they travel — should get advice rather than counting days. Residents are taxed on worldwide income, so the consequence of getting it wrong is not marginal.

Source: Nigeria Tax Act 2025

Your tax goes to a state, and which state depends on where you sleep.

Nigeria's personal income tax is collected by state revenue services on a residence basis, and the Nigeria Tax Administration Act 2025 preserves that. An employee living in Lagos has PAYE remitted to LIRS; one living across the boundary in Ogun State has it remitted to Ogun, even if both sit in the same office on Victoria Island. It changes which portal you file on, which authority issues your tax clearance certificate, and who you argue with when something is wrong.

Source: Nigeria Tax Administration Act 2025; Lagos State Internal Revenue Service

Common mistakes to avoid

Using a pre-2026 calculator built on the Consolidated Relief Allowance.
Paying a year's rent with no receipt and losing the rent relief.
Assuming fewer than 183 days means non-resident under the new rules.
Filing with the wrong state revenue service because you moved across a boundary.
Letting the tax clearance certificate lapse and finding a permit renewal blocked.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.