Tax And Pensions - Career - Nairaland
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| Tax And Pensions by nezer16: 6:37pm On May 30, 2013 |
please can somebody tell me how tax and pension are applied on salary. my salary was increased by a little figure but my deductions increased by more than 100%. Thanks |
| Re: Tax And Pensions by nitrogen(m): 10:51pm On May 30, 2013 |
Pension deduction is equal to 7.5 percent of your gross emoluments/income (for private organisations), perhaps, your income increased by a hundred percent too  If so, then pension deduction will increase at the same rate (100 percent), but wait, maybe some other deductions came with the increase    |
| Re: Tax And Pensions by dahmie2013: 9:20am On May 31, 2013 |
Interesting, concerning pension, I know u are aware of the contributory pension which is between employers and employees. Ur pension is 7.5% of ur basic salary, housing and transport allowances and ur employer is also to add 7.5% minimum, which some companies even add more and all these will be managed by your Pension Fund Administrator (PFA) and they also have Custodians that manage them. So an increase in your salary, will also increase the amount you now contribute to your pension fund. As regards tax, which is PAYE (Pay As You Earn), maybe you aren't aware of the new Personal Income Tax (PIT) law. The new PIT Law is progressive in nature i.e, the more you earn, the higher you pay. So if there is an increase in ur salary, obviously you will pay more tax. Most top mgt staff are not finding the new law funny as its requiring them to pay more. The advantage of this law, favours low income earners. But I think wat wud have affected ur net pay more is ur tax,check ur payslip and analyse again. Hope my comments are useful. |
| Re: Tax And Pensions by olabode89(m): 6:34pm On Jun 01, 2013 |
Hmmmmmm...... For pension it's 7.5% of ur basic emoluments(basic salary + housing allowance + transport allowance). Income Tax (PAYE) Provided it's calculated in accordance with the most recent PITA (PITA 2012) 1. First the Taxable income is calculated by deducting pension and consolidated relief and allowances (CRA) from the gross pay. CRA = higher of N200,000 or 1% of gross income plus 20% of gross income. 2. The Tax income is claculated using the bands below Band 1 first N300,000 taxed @ 7% Band 2 next N300,000 taxed @ 11% Band 3 next N500,000 taxed @ 15% BAnd 4 next N500,000 taxed @ 19% Band 5 next N1,600,000 taxed @ 21% Band 6 above N3,200,000 taxed @ 24% PS-from ur question ur pension and tax will increase if ur gross pay is increased. |
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