Personal Income Tax / PAYE Calculator
Computes Nigerian Pay-As-You-Earn (PAYE) income tax under PITA 2011 Sixth Schedule, Consolidated Relief Allowance (CRA), statutory pension, NHF, and minimum tax.
Computational Framework & Statutory Formulas
Gross Income = Basic Salary + Housing + Transport + Other Allowances
CRA = Higher of [₦200,000 or 1% of Gross Income] + 20% of Gross Income
Taxable Income = Gross Income - (CRA + Statutory Pension + NHF + NHIS + Life Assurance)
First ₦300k @ 7% · Next ₦300k @ 11% · Next ₦500k @ 15% · Next ₦500k @ 19% · Next ₦1.6m @ 21% · Above ₦3.2m @ 24%
If Tax Due < 1% of Gross Income (for Gross > ₦360k/yr), Minimum Tax = 1% of Gross
Nigerian Economic & Statutory Context
In Nigeria, Personal Income Tax is administered by the State Internal Revenue Service (SIRS) where the employee resides, while residents of the Federal Capital Territory (FCT) and military/police personnel remit to the FIRS. Employers are legally obligated under Section 81 of PITA to deduct PAYE monthly and remit within 10 days of the subsequent month.
Frequently Asked Questions (FAQ)
How is the Consolidated Relief Allowance (CRA) computed under PITA 2011?
The Consolidated Relief Allowance (CRA) is calculated as the higher of ₦200,000 or 1% of gross income, plus 20% of gross income. This relief is deducted from gross income before applying tax bands.
Are employee pension contributions tax-deductible in Nigeria?
Yes. Under the Pension Reform Act 2014 and PITA Section 33, statutory pension contributions (minimum 8% of Basic, Housing, and Transport) paid to a licensed Pension Fund Administrator (PFA) are fully tax-exempt.
When is minimum tax applied under Nigerian PAYE?
Under Section 37 of PITA, if an individual earning more than ₦360,000 per annum has no taxable income after reliefs or the calculated tax is lower than 1% of gross income, a minimum tax of 1% of gross income applies.
What is the deadline for filing annual employer tax returns in Nigeria?
Employers must file Form H1 (annual employer declaration) with the relevant State Internal Revenue Service on or before January 31st of each calendar year, detailing all employee compensation and taxes remitted in the preceding year.