With reference to Section 16(2) of NHIS Act below and the Sixth Schedule Income Tax Table (2(b)) of PIT (Amendment) Act, 2011 - Tax exempt.

An employer under the Scheme shall cause to be deducted from an employee's
wages the negotiated amount of any contribution payable by the employee and shall not,
by reason of the employer's liability for any contribution (or penalty thereon) made under
this Act, reduce, whether directly or indirectly, the remuneration or allowances of the
employee in respect of whom the contribution is payable under this Act.

Thanks for sharing your professional opinion and best practice.

whitebread do not relent

I blame the youths of this country. No great country is great without passing through revolution. Stop being beggars to politifcians, to legislooters, to executhieves. Enough is Enough. We must be wise, resilient, defiant, hungry, and mad for revolution.
#NoToRestructuring #YesToRevolution

Yembim:
With reference to Section 16(2) of NHIS Act below and the Sixth Schedule Income Tax Table (2(b)) of PIT (Amendment) Act, 2011 - Tax exempt.

An employer under the Scheme shall cause to be deducted from an employee's
wages the negotiated amount of any contribution payable by the employee and shall not,
by reason of the employer's liability for any contribution (or penalty thereon) made under
this Act, reduce, whether directly or indirectly, the remuneration or allowances of the
employee in respect of whom the contribution is payable under this Act.

Thanks for sharing your professional opinion and best practice.

From what you stated and from what I understand, an amount is deducted from the employees wages and still the remuneration or allowances remains same.

Also consider this, the act was put into effect in 2011,when was the other act which allows pension and insurance to be used as tax rebate put into effect? If it is earlier than 2011 and no ammendment has been done on it then it's obvious HMO's will not qualify for tax rebates.

in nigeria?

u are on ur own

Good morning to those that care

I hate it when after wiping my hind and ready to leave the poo house another surge of urge to poo again forces me back to poo and wipe my hind about 3 times especially peppery poo.

Pls tap the like button if you've experienced this let us exchange ideas on it.

Lol.

Did I just read this post without understanding it?...
Oh! na becos I never wake up. Remind me to comment when I wake up OP

hmmm not in Nigeria o

It doesn't qualify as one.

hmmm

G

Hmmm this kind thread, no shouting..


Jez call me to order your VOGUE shades.

BoluGabriel:
whitebread do not relent

I blame the youths of this country. No great country is great without passing through revolution. Stop being beggars to politifcians, to legislooters, to executhieves. Enough is Enough. We must be wise, resilient, defiant, hungry, and mad for revolution.
#NoToRestructuring #YesToRevolution

This is ma**** on display. How does this relate to the topic?

You just described who you are

Yembim:
With reference to Section 16(2) of NHIS Act below and the Sixth Schedule Income Tax Table (2(b)) of PIT (Amendment) Act, 2011 - Tax exempt.

An employer under the Scheme shall cause to be deducted from an employee's
wages the negotiated amount of any contribution payable by the employee and shall not,
by reason of the employer's liability for any contribution (or penalty thereon) made under
this Act, reduce, whether directly or indirectly, the remuneration or allowances of the
employee in respect of whom the contribution is payable under this Act.

Thanks for sharing your professional opinion and best practice.

Employers typically do not even consider the HMO premium paid for their employees in the gross emoluments per payroll, hence there is no deduction to be claimed. Same way meals provided to employees are treated. It will be added to the gross per the employees contract, however, when computing the gross per payroll, it is not included, hence meals provided to employees will not be deducted as a relief even though it is not taxable.

Simply put, you cannot deduct what you never added to your payroll. Should an employer decide to do that, then he may claim the relief.

People are going to avoid this page because they have nothing smart to contribute.LOL

Yembim:
With reference to Section 16(2) of NHIS Act below and the Sixth Schedule Income Tax Table (2(b)) of PIT (Amendment) Act, 2011 - Tax exempt.

An employer under the Scheme shall cause to be deducted from an employee's
wages the negotiated amount of any contribution payable by the employee and shall not,
by reason of the employer's liability for any contribution (or penalty thereon) made under
this Act, reduce, whether directly or indirectly, the remuneration or allowances of the
employee in respect of whom the contribution is payable under this Act.

Thanks for sharing your professional opinion and best practice.

It depends. In my own case, the employer is responsible for HMO and Pension, hence instead of salary increament, they believe the burden is being taken off the employees and carried by the employer

When I was in paid employment , I got tax rebate as long as I can produce evidence of certificate of contribution from my insurance company. It even got sweeter when I has two different plans from two insurance companies .

Atk1nson:


Employers typically do not even consider the HMO premium paid for their employees in the gross emoluments per payroll, hence there is no deduction to be claimed. Same way meals provided to employees are treated. It will be added to the gross per the employees contract, however, when computing the gross per payroll, it is not included, hence meals provided to employees will not be deducted as a relief even though it is not taxable.

Simply put, you cannot deduct what you never added to your payroll. Should an employer decide to do that, then he may claim the relief.

You're right. It is never included in Salary or allowances

ok

Can I confirm in simple terms that the amount the employer is supposed to pay as HON premium for the employee is being deducted from the employees salary.

Yes, HMO Premiums can be claimed for tax rebate. I haven't done it but a staff of FIRS told my ex-boss it can be done some time ago.

It can be done, but this only translates to tax rebate on a very minute portion of your income. you can do much better that. You can send me a private message if you are interested in getting substantial tax rebate on your income

The Sixth Schedule of the Personal Income Tax Act (as amended) is pretty clear on this. Amount paid in respect of a health insurance scheme is tax exempt or tax deductible. Which means in calculating your taxable income, this amount should be deducted from your employment income before applying the tax table.

The issue of getting a rebate is another question all together. Rebate means getting a refund from the government in respect of taxes already paid. While the law supports refund of tax, in practice the government hardly ever refund any tax paid in excess. The best practice in Nigeria is to net off any excess tax paid against future taxes.

You can always contact me for any tax issue both advisory and compliance.

The money deducted is very minute, but over the years it becomes reasonable, but I believe the HMOs will always give a reason in which the fraction has been channelled into, for civil servants I think the government are responsible for the payment, even the services are not being utilized by the staff, a rebate can not be made, instead it will go back to the government purse.

Let me simplify for readers who don't understand the OP's question.

Some employers pay a fixed amount of money on a regular basis (usually monthly) to health insurance companies (HMOs), for the benefit of their employees. These monthly payments (premium) allow the employee to access healthcare at designated hospitals as may be required. The OP is asking if the premium paid by the employer, for the employee's benefit, to the HMO can be used to reduce/recover PAYE taxes paid by the employee on his/her regular monthly salary.

The answer to the above will depend on how the employee's remuneration contract was structured by the employer. If the premium payments are included as part of the employee's gross salary in the employment contract, then the benefit will not be taxed i.e it will be tax exempt and deducted from the gross salary before the remainder is taxed.

Where the employer bears the cost of the payments without inclusion of the benefit in the employee's gross emoluments, then the employee cannot take advantage of the payments for the purpose of reducing his/her PAYE tax payable. Neither can the employee recover the tax benefit that would have been obtained if the premium payments were included as part of his gross salaries.

Hope this helps!

ThierryJay:
Let me simplify for readers who don't understand the OP's question.

Some employers pay a fixed amount of money on a regular basis (usually monthly) to health insurance companies (HMOs), for the benefit of their employees. These monthly payments (premium) allow the employee to access healthcare at designated hospitals as may be required. The OP is asking if the premium paid by the employer, for the employee's benefit, to the HMO can be used to reduce/recover PAYE taxes paid by the employee on his/her regular monthly salary.

The answer to the above will depend on how the employee's remuneration contract was structured by the employer. If the premium payments are included as part of the employee's gross salary in the employment contract, then the benefit will not be taxed i.e it will be tax exempt and deducted from the gross salary before the remainder is taxed.

Where the employer bears the cost of the payments without inclusion of the benefit in the employee's gross emoluments, then the employee cannot take advantage of the payments for the purpose of reducing his/her PAYE tax payable. Neither can the employee recover the tax benefit that would have been obtained if the premium payments were included as part of his gross salaries.

Hope this helps!

You just nailed it. Good job. What you can be done to reduce tax liability is to take up an additional pension or take up a life insurance and then forward it to the hr of your firm. It will be tax exempt. Op hope it further clarifies your question. If what you are looking for is a way to reduce your tax liability

I appreciate y'all opinion and contribution.

Again for clarity, yes, just like pension, the premium to HMO was paid jointly and the employer's portion is an allowable expense.

The employees contribution to the premium paid was deducted via payroll. Thus, this deduction qualify for tax exempt.

Gracias

leksmedia:
When I was in paid employment , I got tax rebate as long as I can produce evidence of certificate of contribution from my insurance company. It even got sweeter when I has two different plans from two insurance companies .

Hhmm! Health insurance scheme?

nmreports:
Can I confirm in simple terms that the amount the employer is supposed to pay as HON premium for the employee is being deducted from the employees salary.

Shared cost