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How To Calculate Your Income Tax In Nigeria (Ugometrics) - Business - Nairaland

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How To Calculate Your Income Tax In Nigeria (Ugometrics) by Seun(m): 3:50pm On Oct 04, 2011
Frank: I work in a bank and each time I get my payslip I always see tax deducted. Some months its the same whilst sometimes it differs. Please how the hell do they calculate tax

Me: Take it easy Frank, its the same with me and several other employees. How much do you earn?

Frank: My salary package N1.2m (that is N100k per month)

Me: Ok! There isn't any one straight way of calculating your taxes because a lot of how it is calculated depends on the way your Basic Salary and Allowances are broken down. So, to make it simple, I will assume  a breakdown for you;

Step 1 - Get the breakdown of the components of your salary. See example below
Basic Salary                          690,000   
Housing Salary                      150,000 
Meal Allowance                      60,000
Entertainment Allowance         60,000
Utility Allowance                     80,000
Transport Allowance               91,000
Leave Allowance                    69,000
Total                                    1,200,000

Step 2. Deduct reliefs and allowances from your salary. The Inland Revenue usually tax you on your entire salaries after deducting some reliefs and allowances. The reliefs and allowances deducted for tax purposes are:

Housing - Maximum of N150k per annum
Leave Allowance - Not more than 10% of your Basic Salary
Transport Allowance - N20k per annum
Utility Allowances     -  N10k per annum
Meal and Entertainment Allowances - N6k each per annum
Children Allowance -  N2.5k per kid (maximum of 4kids)
Dependent Relative Allowance - N2k per annum (maximum of 2 dependents)

Reliefs are 20% of your Annual Basic Salary plus N5k
NHF (Mandatory National Housing Fund Contribution) - 2.5% of your Basic Salary
Pension Contribution - 7.5% of your Basic plus Transport and Housing Allowances

All of the above get deducted from the N1.2m above.

Step 3 - Calculate the deductions (continued here)

Read the rest of the tutorial: http://www.ugometrics.com/2011/10/how-to-calculate-your-taxes.html
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by igbanbajo(m): 4:11pm On Oct 04, 2011
useful.
thanks.
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by GoldCircle: 4:17pm On Oct 04, 2011
can't we just get the prevailing tax rate in Nigeria? I often hear it when people say Norway & some select countries charge 36% as tax. Can't we thus get a range say between x % and y % for Nigeria?
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by debosky(m): 4:20pm On Oct 04, 2011
^^ You should simply have clicked on the link to find out more.

Taxable Amount - N592,925
5% of 1st 30,000 - 1,500
10% of next 30,000 - 3,000
15% of next 50,000 - 7.500
20% of next 50,000 - 10,000
Total Tax for first N160k is N22k (1.5k+3k+7.5k+10k)

25% of what is left - N432,935 (N592,925-160,000) = N108,231.25

From that calculation, it appears the 'prevailing' tax rate is 25% after deductions for allowances.
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by zibe(m): 5:16pm On Oct 04, 2011
Exactly what I was taught in taxation. Lol. Educating
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by owohblow: 5:47pm On Oct 04, 2011
good one
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by uyakachi(m): 6:02pm On Oct 04, 2011
plz let someone help me to calculate mine of #12000 only per-month, thanks
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by felucci(m): 8:54pm On Oct 04, 2011
You can get to know how to do a self assessment if you get a copy of the personal income tax act. You can also use an online tax calculator here:  Online Tax calculator by the LIRS
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by Pukkah: 9:33pm On Oct 04, 2011
This is a good one.
 
 
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by antonion(m): 7:49am On Oct 05, 2011
iam a South African i earn R16 000 (N280 000) but they Tax me R 2000 (N35 000) , that's a LOT OF MONEY
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by antonion(m): 7:57am On Oct 05, 2011
uyakachi:

plz let someone help me to calculate mine of #12000 only per-month, thanks

In south Africa if you Earn less than N135 000 a year you don't qualify to pay tax but you must be registered with South African Receiver of Revenue(SARS)
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by akunta(f): 9:34am On Oct 05, 2011
Very useful n self explianatory.
 
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by shumno(f): 2:45pm On Oct 05, 2011
@ debosky, 25percent is not the tax rate but anything in excess of 160,000 is charged @ 25 percent after reliefs and allowances.
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by finintell: 12:06pm On Apr 12, 2012
I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
 
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by mandon: 1:01pm On Apr 12, 2012
u need to know that this computation has changed pursuant to personal income amendment act (PITA) 2011.Refer to ur accountant for update.
All these deductions have been replaced with a N200,000 consolidated allowance or 1% gross emolument. Plse confirm. The new tax regime commenced in January 2012
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by Tellmeurmind: 2:47pm On Aug 30, 2012
finintell: I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
pls,can u assist by sending it to my box? tellmeurmind@yahoo.com
 
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by Sattie: 3:46am On Jan 26, 2013
finintell: I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
Pls send me a copy pls: xtollys@yahoo.com
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by johnteddy(m): 5:27am On Jan 26, 2013
finintell: I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
Plz sir I really need it, can u please send to my box tjteddy24@yahoo.com
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by esorison(m): 7:24am On May 21, 2013
finintell: I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
Please i would appreciate you sending me the payroll application. thanks
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by esorison(m): 7:24am On May 21, 2013
finintell: I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
Please i would appreciate you sending me the payroll application. thanks
esorison@yahoo.com
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by joeslick(m): 10:55am On Dec 14, 2013
finintell: I recently developed a Payroll Application that automatically generates payroll schedule monthly for a company based on the personal income tax act 2011.........it also sends payslips to the employees.....it has reports and so on..........if you're intersted i can deploy the same application for you. noibilism@gmail.com
pls i would really appreciate it if u culd send me a copy of d App.
joeeke85@gmail.com
Re: How To Calculate Your Income Tax In Nigeria (Ugometrics) by sirj: 3:16pm On Jan 09
Pls I'd appreciate if u can send a copy to my inbox.
Ponaghise@live.com
Thanks

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