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

useful.
thanks.

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?

^^ 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.

Exactly what I was taught in taxation. Lol. Educating

good one

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

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

This is a good one.

iam a South African i earn R16 000 (N280 000) but they Tax me R 2000 (N35 000) , that's a LOT OF MONEY

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)

Very useful n self explianatory.

@ debosky, 25percent is not the tax rate but anything in excess of 160,000 is charged @ 25 percent after reliefs and allowances.

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

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

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

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

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

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

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

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

Pls I'd appreciate if u can send a copy to my inbox.
Ponaghise@live.com
Thanks

Pls someone should help me out with my tax(PAYE) on a monthly basis:
Basic Salary: 80,000
Housing Allowance: 10,100
Medical Allowance: 12,100
Transportation Allowance: 14,000
Overtime: 5,000
Total: 121,200
Pls what will be my Tax(PAYE) per month. Thanks u for ur assistance

perryokuns36:
Pls someone should help me out with my tax(PAYE) on a monthly basis:
Basic Salary: 80,000
Housing Allowance: 10,100
Medical Allowance: 12,100
Transportation Allowance: 14,000
Overtime: 5,000
Total: 121,200
Pls what will be my Tax(PAYE) per month. Thanks u for ur assistance

Monthly paye- N7,544

seritech:


Monthly paye- N7,544

Baba, maybe you forgot to factor in the new 8% of Basic, Housing and transport as the employee pension contribution which will affect the consolidated relief. Putting that into consideration, you should have a PAYE of N7,495.


N:B Even at 7.5%, the PAYE is N7,573


don't mind me, love details...

Try out this cool Nigerian income tax calculator: http://calculator.com.ng/firs-salary-income-tax-paye-calculator Should help clear things up when it comes to PAYE, NHF and pensions deductions..

mandon:
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

Good morning sir, can i ask you a question on this PAYE taxation as it relates to 2015