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Nairaland Forum / Nairaland / General / Career / How Is Paye Calculated For Someone Working Overtime (12748 Views)
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Re: How Is Paye Calculated For Someone Working Overtime by Coolcash1: 4:42pm On Mar 12, 2022 |
Since the overtime income is an additional income, Just subtract a fixed sum of N200k from it and multiply the balance by the tax bracket your main income fall into. The bracket can be either 7%,14%,17% 19%, 21% or 24%. |
Re: How Is Paye Calculated For Someone Working Overtime by Osyxcel(m): 4:43pm On Mar 12, 2022 |
makkosky: Well, when is time for review by tax authorities, all income will be added as gross income and the tax table will be applied after considering reliefs. After arriving at the tax payable, all payment will be taken into account and the balance will be paid (with interest and penalty where applicable). |
Re: How Is Paye Calculated For Someone Working Overtime by Bbbw: 4:53pm On Mar 12, 2022 |
Let accountant do their job |
Re: How Is Paye Calculated For Someone Working Overtime by makkosky(m): 4:58pm On Mar 12, 2022 |
Osyxcel: The company can decide to separate payroll schedule for other bonus schedules ( performance bonus, over time bonus, Ex gratia bonus, compassionate allowance, out of station allowance etc)... Their is no section of the 2011 PIT act (As amended) that stipulate that all income of employee with be added back to payroll and tax will be calculated on it. What if the payroll circle is different from the over time circle.... Moreover, on tax Audit, either LIRS or other SBIRS, these people focus more on 1. Directors Paye or DA 2. Paye payment Date 3. Paye computation 4. Business premises 5. Withholding tax schedules (invoices or petty cash) Most don't even ask if there are OVT or related. Allowances. |
Re: How Is Paye Calculated For Someone Working Overtime by Osyxcel(m): 5:06pm On Mar 12, 2022 |
makkosky: Well, according to 2011 PITA (as amendmend), all salaries, bonuses and BIKs are treated as gross emolument. You're right that the SBIRs don't focus much on some things. It just because our tax systems are not fully effective. 3 Likes |
Re: How Is Paye Calculated For Someone Working Overtime by Odetokun3(m): 5:09pm On Mar 12, 2022 |
Rubyjade: I read your analysis and I accessed the sheet but I think according to the finance act. Gross income now includes bonuses, bik, any benefits.so they are not allowable deductions. Pension is deductible tho but others like allowances bonuses are not. Thanks 2 Likes |
Re: How Is Paye Calculated For Someone Working Overtime by makkosky(m): 5:10pm On Mar 12, 2022 |
Osyxcel: If state tax audit should go by your first paragraph, a higher percentage of companies might not survive the tax liability. Esp banks. Good one � 2 Likes |
Re: How Is Paye Calculated For Someone Working Overtime by Jalaw: 5:14pm On Mar 12, 2022 |
I'm surprised a lot persons are asking what "PAYE" is. |
Re: How Is Paye Calculated For Someone Working Overtime by TheDemola: 5:15pm On Mar 12, 2022 |
engrzico: Good question |
Re: How Is Paye Calculated For Someone Working Overtime by TheDemola: 5:18pm On Mar 12, 2022 |
phemmyfour: Please explain more. How do you know total tax payable and total rebates? |
Re: How Is Paye Calculated For Someone Working Overtime by kerry57: 5:20pm On Mar 12, 2022 |
U calculate the daily pay by dividing the monthly salary by the number of ur working day in the month. For most jobs we do 8 hours daily. Overtime of 1 to 3 hours is considers a half day payment and from 4 hours to 8 hours is considered a full day pay for the number of days of overtime worked. |
Re: How Is Paye Calculated For Someone Working Overtime by TheDemola: 5:26pm On Mar 12, 2022 |
makkosky: This is done on the gross and per year, but in the case of you working overtime and it's monthly thing and the overtime rate/payment differ, how is the tax arrived at? |
Re: How Is Paye Calculated For Someone Working Overtime by mamawa123: 5:31pm On Mar 12, 2022 |
Zihatu: PAYE - Pay As You Earn Is a form of taxation by withholding taxes on income payments to employees. |
Re: How Is Paye Calculated For Someone Working Overtime by 22o62021: 5:38pm On Mar 12, 2022 |
Simple something to run with excel Pay me make I do am for you |
Re: How Is Paye Calculated For Someone Working Overtime by Osyxcel(m): 5:41pm On Mar 12, 2022 |
TheDemola: In my opinion, the best way to approach this is to add a percentage (not too high or low) of the overtime earned monthly to the monthly tax payments. Then towards the end of the year, say Nov/Dec, the gross emolument received till date should then be recalculated and adjustments made. The adjustment could be to increase or reduce the tax to be paid in Nov/Dec. |
Re: How Is Paye Calculated For Someone Working Overtime by dahmie2013: 6:05pm On Mar 12, 2022 |
It is very simple, overtime allowance is part of your gross income and it will be taxed after deducting all allowable deductions. |
Re: How Is Paye Calculated For Someone Working Overtime by makkosky(m): 6:15pm On Mar 12, 2022 |
TheDemola: It can be calculated monthly. On your second line, it can be 1% if it's not more than minimum wage, it can be 5% on amount earned ( WHT scenario) or be added back to staff monthly gross pay and be subjected to PAYE computation. |
Re: How Is Paye Calculated For Someone Working Overtime by Sulybayus: 6:37pm On Mar 12, 2022 |
I need to know more about this tax issues I want to know what percent they're charged on 100k as gross . |
Re: How Is Paye Calculated For Someone Working Overtime by engrzico(m): 6:53pm On Mar 12, 2022 |
I work in a manufacturing company in Ogun state. Anuall income before tax of 2.5m spydera: |
Re: How Is Paye Calculated For Someone Working Overtime by Coronavirus84: 6:58pm On Mar 12, 2022 |
laughitall:PAYE means Pay As You Earn 1 Like |
Re: How Is Paye Calculated For Someone Working Overtime by coffeeblue(f): 7:13pm On Mar 12, 2022 |
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Re: How Is Paye Calculated For Someone Working Overtime by mrphysics(m): 8:23pm On Mar 12, 2022 |
makkosky:There is no need of making it a percentage. Its best added to the gross income. Over time is not withholdable. Except if you want to call it services and specify which. And in this case if it's added to the PAYE calculation, it doesn't affect it because it has been taxed as WHT. From the regulatory point of view, overtime should be added as an earned income. |
Re: How Is Paye Calculated For Someone Working Overtime by mrphysics(m): 8:24pm On Mar 12, 2022 |
makkosky:There is no need of making it a percentage. Its best added to the gross income. Over time is not withholdable. Except if you want to call it services and specify which. And in this case if it's added to the PAYE calculation, it doesn't affect it because it has been taxed as WHT. From the regulatory point of view, overtime should be added as an earned income |
Re: How Is Paye Calculated For Someone Working Overtime by mrphysics(m): 8:25pm On Mar 12, 2022 |
Sulybayus:Its simple to calculate but depends on some other factors. Do you pay NHIS, Pension, NHF? These are deductibles 1 Like |
Re: How Is Paye Calculated For Someone Working Overtime by mrphysics(m): 8:25pm On Mar 12, 2022 |
engrzico:Is NHF, pension, NHIS paid for you? |
Re: How Is Paye Calculated For Someone Working Overtime by mrphysics(m): 8:29pm On Mar 12, 2022 |
engrzico:I helped a HR with PAYE computation. However there's been a little change from 2020 financial act. The old method of computation is as below:
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Re: How Is Paye Calculated For Someone Working Overtime by Olowokere(m): 9:57pm On Mar 12, 2022 |
laughitall:that's pay as you earn.... paye |
Re: How Is Paye Calculated For Someone Working Overtime by TheDemola: 11:16am On Mar 13, 2022 |
makkosky: This PAYE computation Taxable income calculation on tax Table (7, 11, 15, 19, 21 & 24% on First 300k, next 300k, next 500k, next 500k, next 1,600m and 3,200m; base on taxable income)to me, needs to be reworked and to me, I feel one can be overtaxed. With this table and knowing your gross pay, you can easily know how much is your monthly tax, but overtime pay monthly differ and then there are other payments, like leave bonus, child allowance and all (which are paid once/year), it is difficult to actually know how you are being taxed. Except this graduated tax pay has a way of it being done monthly too |
Re: How Is Paye Calculated For Someone Working Overtime by TheDemola: 11:18am On Mar 13, 2022 |
mrphysics: What's now the new method please? |
Re: How Is Paye Calculated For Someone Working Overtime by makkosky(m): 11:28am On Mar 13, 2022 |
TheDemola: To calculate the graduated tax table monthly, divide the GTT stages amount by 12.... That's 1st 300k/12 * 7%... 2 Likes |
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