Gratuity / terminal-benefit calculator
What tax you owe on a gratuity and on compensation for loss of office — and what the same money would have cost you under the 2025 rules.
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What you are being paid
Taxable in full from 2026. It was exempt in 2025.
Exempt up to ₦50,000,000 in 2026. Anything above that is chargeable.
Leave at 0 if these payments are your only chargeable income for the year.
Enter your gratuity or your compensation for loss of office on the left. The tax, the exempt portion and the difference between the 2025 and 2026 rules appear here.
What changed on 1 January 2026
Two things, in opposite directions. A gratuity used to be exempt in full; from 2026 it is taxed in full as employment income. If you are retiring on a gratuity, that is a real and substantial loss — a payment that reached you whole now arrives with tax taken out of it. Compensation for loss of office moved the other way: the exempt slice went from ₦10,000,000 to ₦50,000,000, so most redundancy payments that were partly taxable in 2025 are entirely exempt in 2026. Which of those you get depends on why you are leaving, and the two are treated very differently. Both facts are above, with your own figures in them.
Common questions
- Is gratuity taxable in Nigeria in 2026?
- Yes. From 2026 gratuity loses its exemption and is taxable as part of your income — a change worth planning for if you are approaching retirement or a payout.
- Is compensation for loss of office taxable?
- Compensation for loss of office is exempt up to ₦50,000,000. Anything above that ceiling is taxable at your personal income tax rates.
- How is tax on a terminal benefit worked out?
- The exempt portion is removed first, and the taxable remainder is added to your income for the year and taxed at the ordinary band rates. Because it stacks on top of your other income, a large payout can be taxed at a higher band than your salary alone.