Important Notes about Payroll in Nigeria

Personal Income Tax Rates
Chargeable Income (NGN) Rates Tax on Band (NGN) Cumulative Chargeable Profit Cumulative Tax (NGN)
First 300,000 7% 21,000 300,000 21,000
Next 300,000 11% 33,000 600,000 54,000
Next 500,000 15% 75,000 1,100,000 129,000
Next 500,000 19% 95,000 1,600,000 224,000
Next 1,600,000 21% 336,000 3,200,000 560,000
Over 3,200,000 24%
RECOMMENDED LINKS:  Tax Calculator |  Payroll Guide
Consolidated Relief Allowance (CRA)

20% of gross income + (200,000 Naira or 1% of Gross Income, whichever is higher)

Finance Act 2020 impacts on CRA reducing the resulting value where statutory deductions are involved.

Pension Contribution

Every employer with 15 or more employees.

Employer to contribute minimum of 10% of the sum of Basic Salary, Housing Allowance, and Transport Allowance, while employee to contribute minimum of 8%.

RECOMMENDED LINKS:  Pension Calculator
National Housing Fund (NHF)

Any employee earning basic salary of Three thousand Naira (NGN 3,000) or more is expected to contribute to the National Housing Fund.

This requirement is no longer mandatory for private sector organizations as amended by the Business Facilitation Act, 2023

Employee contributes 2.5% of basic salary.

(Reference: See section 4 subsection 1 of the National Housing Fund Act, 2004 )

RECOMMENDED LINKS:  Salary Calculator
National Health Insurance Scheme (NHIS)

Every employer with 10 or more staff is expected to deduct National Health Insurance Scheme from staff emolument.

Employer contributes 10% of basic salary while employee contributes 5% of basic salary.

RECOMMENDED LINKS:  Salary Calculator
PAYE & Pension Remittance Due Dates

10th of every month is the due date for remitting PAYE tax deducted from staff salary to the relavant tax authority (RTA)

Pension is to be remitted to pension fund administrator not later than 7 working days after salary payment.

NHF is required to be remitted to Federal Mortgage Bank of Nigeria (FMBN) within one month after salary payment.

Personal Income Tax Filing Due Dates

January 31st of every year is the due date for filing employee tax returns by corporate organization with relavant tax authority (RTA)

Individual persons have to March 31st of each year to file income tax returns.