For a man who knows beside nothing about economy, assess count may appear to be unimaginably confounding. Believe us, even some expert financial specialists fall down in fear when they see the assessment framework they need to manage.
Yet, in the event that you need to make sense of this, you should put forth a valiant effort and attempt to comprehend it. So this is the manner by which it works: Before you make sense of the amount of your pay you should provide for FIRS, you have to compute the measure of assessable salary.
This implies you have to deduct reliefs and exclusions. These incorporate the united help recompense (CRA), cash to spend on kids (up to 4) as well as needy relatives (up to 2) and an installment to the benefits finance. A few people additionally incorporate their installments to the National Housing Fund, Life Assurance and National Health Insurance.
Up until 2012, combined alleviation remittance did not exist. Rather, there were a few separate individual reliefs, which included lodging, dinners, utilities and different things. Since 2012, they were consolidated into a certain something. Presently it remains at 20% of gross wage (GI) with the additional ₦200,000 or 1% of GI, if the yearly pay is under ₦200,000.
In this manner, to ascertain the assessable pay, you have to deduct: CRA (20% of GI + ₦200,000 OR 1% of GI); reliefs on youngsters (₦2,500 per kid) or potentially subordinate relatives (₦2,000 per relative); annuity help (no less than 8%); and different installments, if pertinent.
After you have computed your assessable salary, you can at last proceed onward to ascertaining PAYE. For that, you will require an adding machine, a pen and a bit of paper, as there is a considerable amount to take in. Then again, on the off chance that you are convenient with Microsoft Excel, you can program it to do the figurings for you. For example ₦300,000 of your yearly salary, the PIT rate is 7%.
For the following ₦300,000, the rate is 11%. For the following ₦500,000, it is 15%; for ₦500,000 from that point onward, it is 19%.
The following ₦1,600,000 are burdened at 21%, and everything else over ₦3,200,000 is saddled at 24%. You have to take your assessable salary, ascertain the measure of expense payable for every one of the sections, include them up, and you will get the measure of duty you have to pay through PAYE.
Excessively befuddling? Keep perusing for a more itemized breakdown of the count. Well ordered guide on the best way to compute PAYE in Nigeria