50 New Tax Exemptions From 2026 – Who Benefits and How to Prepare

From January 1, 2026, the government plans to start about 50 new tax exemptions and reliefs. The big change is this: people who earn the minimum wage will not pay tax on that wage band. People who earn more than the minimum wage will still receive some relief, which will decrease as income rises, up to ₦20 million per year.

What does this mean for your pocket? Low and middle-earners will feel it most. If you earn ₦100,000 a month, cutting your effective PAYE by 3 percentage points can save about ₦3,000 every month. 

If you earn ₦1,000,000 a month, a 5-point cut could add roughly ₦50,000 to your take-home pay. This extra money can help with food, transport, rent, school fees, and savings.

Employers need to get ready early. Update salary structures and PAYE tables before 2026. Test how net pay will change under the new bands so that HR can answer staff questions. Refresh employment letters to ensure they align with the new net-of-tax reality. 

Finance and IT teams should also prepare payroll and ERP systems. Set up the new tax codes, keep clear audit trails, and make sure calculations work for new hires and backdated changes. 

Small and medium businesses can also gain from easier compliance and possible credits when they register properly (TIN/BVN), enrol staff in pensions, and use e-invoicing.

For this policy to be effective, the rules must be clear and the states must apply them uniformly. The government should share simple tools: worked examples, calculators, and FAQs in plain English. 

Use Q3–Q4 2025 as a test period: run parallel payroll, check the numbers, and brief your board. If done well, this package can lift compliance and confidence. If done poorly, it can lead to confusion and payroll errors.