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.

RECOMMENDED LINKS:  Tax Calculator
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.

Employee contributes 5% of basic salary.

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