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How to Declare Multiple Income Streams for Proper Taxation in 2026
Many Nigerian professionals juggle full-time jobs and side hustles. With the new Nigeria Tax Act (NTA) 2025 now in effect, understanding how to declare multiple income streams has become crucial to avoid double taxation and ensure compliance.
Here’s a step-by-step guide to managing multiple sources of income under the 2026 tax system.
Income Consolidation Is Key
Under the law, every taxpayer is treated as one taxable entity, no matter how many jobs or side hustles they have.
“By March, employees must account for their 9-to-5 earnings plus side gig profits,” says Ajibola Sogunro, Partner at Forvis Mazars.
This means aggregating all annual income into a single total before applying progressive tax bands.
Employers deduct PAYE monthly for formal employment. For other income, taxpayers must file a personal return with their State Internal Revenue Service (SIRS) and pay any additional tax owed.
Will Consolidation Increase Your Tax?
Consolidating income does not necessarily mean paying more. Nigeria uses progressive tax bands, and the first ₦800,000 of annual income is tax-free.
Current 2026 tax bands:
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₦0 – ₦800,000: 0%
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₦800,001 – ₦3,000,000: 15%
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₦3,000,001 – ₦12,000,000: 18%
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₦12,000,001 – ₦25,000,000: 21%
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₦25,000,001 – ₦50,000,000: 23%
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₦50,000,001 and above: 25%
Claim Deductions to Reduce Tax
Not all income is taxed the same. Unlike PAYE from employment, business income allows deductions.
Eligible deductions include:
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Data, internet, and software subscriptions
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Electricity, fuel, and home office expenses
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Work-related travel and tools
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Payments to assistants or specialised services
The 20% Rent Relief, capped at ₦500,000, is also deductible from taxable income.
“Tax is calculated on profit, not total inflow,” says Olufemi Olarinde of the Nigeria Revenue Service.
Example: If you earn ₦1,000,000 but spend ₦700,000 on business expenses, you are taxed only on ₦300,000 profit.
Risks to Watch
Professionals with multiple income streams face key risks:
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Filing deadlines: Annual returns must be submitted by March 31.
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Mixing personal and business funds: Income paid into personal accounts can be misclassified, especially for cumulative bank inflows exceeding ₦25 million.
Experts advise maintaining separate accounts for business funds and keeping digital receipts to substantiate deductions.
2026 Compliance Action Plan
To ensure proper taxation and avoid penalties:
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Maintain separate bank accounts for all side ventures.
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Keep digital receipts for all business-related expenses.
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Aggregate PAYE slips from formal employment with side income records.
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Submit a consolidated self-assessment via your State Revenue portal before March 31.
