PITA 2011: How to calculate your PAYE tax in Nigeria
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Posted by Felix Okoli on Thursday December 12, 2013 at 14:58:14:
If you employed by a company in Nigeria and earning a salary, you would have to pay a tax based on the salary you earn per month and in Nigeria, this is normally referred to as the Pay As You Earn(P.A.Y.E) tax.The P.A.Y.E. tax is normally calculated by the company accountant and deducted from the final pay that you'd receive in your pay slip as an employer and this is normally approved of by your employer who has to obey the tax laws regarding P.A.Y.E. tax.Personal income taxes have to be paid in accordance with the law using the correct rates and remitted at the exact time.The PAYE tax in Nigeria is governed by the Personal Income Tax act and the law was passed by the the legislative arm of government with the executive arm being in charge of enforcing it.When companies don't deduct and remit tax, it is the executive govt that can charge them to court for tax evasion. As an employee, you may have noticed some tax deductions on your pay slip and hence may be wondering if it's actually correct. Anyway, this write up is to provide a sort of guide or how you can independently get an estimate of your PAYE tax according to the Personal Income Tax Act as amended as at 2011.The Personal Income Tax Act 2011 amended introduced some recent changes such as:- Minimum tax of 1% on gross income
- A Consolidated Free Allowance(CFA) of N200k or 1% of gross income(whichever is higher), plus 20% of that gross income
- Deduct any allowable deductions such as NSITF, NHF, Pension, Expenses, Life assurance, Professional duesHow to calculate your PAYE tax as at PITA 2011
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1. Add all your annual income including allowances and basic salary2. Add up all your allowable deductions such as NSITF, NHF, Pension, Expenses, Life assurance and Professional dues3. Make use of the online tool here to estimate your PAYE tax.I hope it helped?
Comments:
If you employed by a company in Nigeria and earning a salary, you would have to pay a tax based on the salary you earn per month and in Nigeria, this is normally referred to as the Pay As You Earn(P.A.Y.E) tax.The P.A.Y.E. tax is normally calculated by the company accountant and deducted from the final pay that you'd receive in your pay slip as an employer and this is normally approved of by your employer who has to obey the tax laws regarding P.A.Y.E. tax.Personal income taxes have to be paid in accordance with the law using the correct rates and remitted at the exact time.The PAYE tax in Nigeria is governed by the Personal Income Tax act and the law was passed by the the legislative arm of government with the executive arm being in charge of enforcing it.When companies don't deduct and remit tax, it is the executive govt that can charge them to court for tax evasion. As an employee, you may have noticed some tax deductions on your pay slip and hence may be wondering if it's actually correct. Anyway, this write up is to provide a sort of guide or how you can independently get an estimate of your PAYE tax according to the Personal Income Tax Act as amended as at 2011.The Personal Income Tax Act 2011 amended introduced some recent changes such as:- Minimum tax of 1% on gross income
- A Consolidated Free Allowance(CFA) of N200k or 1% of gross income(whichever is higher), plus 20% of that gross income
- Deduct any allowable deductions such as NSITF, NHF, Pension, Expenses, Life assurance, Professional duesHow to calculate your PAYE tax as at PITA 2011
===========================
1. Add all your annual income including allowances and basic salary2. Add up all your allowable deductions such as NSITF, NHF, Pension, Expenses, Life assurance and Professional dues3. Make use of the online tool here to estimate your PAYE tax.I hope it helped?
Comments: