Legal employment for your global team
Your global team, locally employed
Set up and manage entities
Manage all admin tasks from one place
Premium benefits for your global team
Relocate your team anywhere
Localised employment contracts
This guide explains how the Nigeria Tax Act (NTA) 2026 affects individuals earning income remotely from Nigeria. It is intended to help freelancers and remote workers understand their tax obligations and avoid common compliance mistakes. The Nigeria Tax Act (NTA) 2026 is effective from 1 January 2026.
The Nigeria Tax Act (NTA) 2026 introduces a revised tax framework that clarifies how freelancers, independent contractors, and remote workers must calculate, file, and pay personal income tax in Nigeria.
Under this Act, self-assessment is mandatory, meaning individuals are personally responsible for:
The Act applies to:
If you earn income while being a Nigerian tax resident, these rules apply to you.
Previously, many freelancers treated taxes as something to address at the end of the year. Under the NTA 2026, this approach carries increased risk.
Tax assessments are now based on:
Waiting until year-end to calculate taxes may lead to errors, penalties, or overpayment.
Filing obligations
If your annual income is below ₦800,000, no personal income tax is payable. However, filing a tax return is still relevant, even when no tax is due.
Types of taxable income
Taxable income may include:
For Nigerian tax residents, both local and foreign income may be taxable.
Nigeria uses a progressive tax system, meaning income is taxed in portions (“slices”), with higher portions taxed at higher rates.
Example: Sepe is a freelance software developer earning ₦5,000,000 annually.
Tax calculation before deductions
| | | | | -------------------- | ---- | -------- | | Income slice | Rate | Tax | | First ₦800,000 | 0% | ₦0 | | Next ₦2,200,000 | 15% | ₦330,000 | | Remaining ₦2,000,000 | 18% | ₦360,000 |
Total tax before deductions: ₦690,000
Tax is calculated on taxable income, not gross income. Legitimate and documented business expenses may be deducted.
Example deductions
Total deductions: ₦810,000 Taxable income: ₦4,190,000 Recalculated tax: ₦544,200
By maintaining proper records, Sepe legally reduces his tax liability by ₦145,800.
Allowable deductions and tax reliefs
Common allowable deductions include:
All deductions must be supported by proper documentation.
Foreign income must be converted using the official CBN exchange rate applicable on the date the income is received. Year-end average exchange rates should not be used.
Benefits in kind refer to non-cash benefits received as part of work arrangements.
Examples include:
Housing benefits (up to 20% of gross income)
Employer-provided assets (up to 5% of asset cost)
These benefits may be taxable depending on how they are provided.
Where records are incomplete or inconsistent, tax authorities may apply presumptive tax, estimating income instead of calculating it from records.
To reduce this risk:
Note: A Tax Identification Number (TIN) is mandatory for all freelancers and independent workers.
Common mistakes
Best practices
