PAYE tax calculator (Nigeria) with user guide

Usually, the gross salary on an employment contract differs from the monthly salary which an employee receives. Our earlier article on payroll and statutory contributions in Nigeria provides an analysis of the various requirements. One of the payroll obligations that reduce net pay is Pay-As-You-Earn (PAYE) tax. BRC online PAYE tax calculator, Nigeria, will assist taxpayers estimate the annual and monthly payroll tax.

Points to note

  1. The calculator is per person.

  2. Currency: The currency of the taxable income band is in Nigerian Naira. Convert any foreign income to local currency before using this calculator.

  3. Cash and non-cash pay: Annual employment income includes any salary, income, fee, bonus, gain as well as benefits in kind of an employee.

  4. Pension: Gross emolument is a minimum of basic, housing, and transport allowance (BHT). This calculator uses the mandatory pension contribution of BHT * 8% for an employee. Where the gross emoluments include other allowances as well as BHT, you may insert the excess amount in the section for a voluntary contribution.

    For instance, Mr. Ade Osagie has an annual BHT of NGN4million and other allowances of NGN3m. Mr. Osagie contributes only a mandatory pension and ticks the box. BRC online PAYE tax calculator will calculate MPC of NGN320,000, that is, 0.08 * NGN4m. However, Mr. Osagie uses gross emoluments of his entire employment income of NGN7m. The actual contribution is NGN560,000 (NGN7m * 0.08). BRC recognizes the possible alternatives to BHT and recommends that users insert any amount above BHT * 8% as an additional contribution. In the case of Mr. Osagie, the figure is NGN240,000 (NGN560,000 – 320,000).

  5. Life insurance premium: Insert the premium paid on a personal life insurance policy.

  6. The Nigerian tax authority usually requires evidence of remittance to the regulatory body before a taxpayer claim relief on statutory contributions.

The calculator is valid for employment income up till 31 December 2020. Users can determine any outstanding taxes for prior year(s).

Online PAYE tax calculator (Nigeria) with changes in Finance Act 2020 is effective 1 January 2021.

Download a one-page summary of the different payroll deductions in Nigeria here.

Updated: June 2, 2021

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