Payroll home tutorial on advance excel & account software for accountant in ab

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TRAINING GOAL:
 How to calculate Payroll tax based on Nigerian Personal Income Tax (Amendment Act) 2011


TRAINING OBJECTIVE:
 Determine Gross taxable Income.
 Derive Tax exempts.
 Calculate Tax allowance (Relief).
 Derive Net taxable Income.
 Calculate the Nigerian payroll PAYE tax based on PITA 2011.

NOTE:
BASIC + HOUSING + UTILITY:+TRANSPORT +MEAL+ENTERTAINMENT + OTHERS= GROSS INCOME



LESS EXEMPTIONS


PENSION+ GRATUITY:+LIFE ASSURANCE AND NHF= TAX PAYABLE (PAYE)


Tax Exempts
The Nigerian Payroll PITA tax law provides certain payroll deductions as tax exempt. What this means is that tax Exempt amount has to be removed from Gross taxable Income (earnings) before applying the tax rules to determine tax.
The legal Tax Exempts available are as follows;
1. Pension deductions,
2. NHF deductions ( National Housing Funds)
3. Gratuity payment
4. NHIS (National Health Insurance Scheme)
5. Life Assurance

Consolidation Relief Allowance (CRA)
The new Nigerian Payroll tax law came with a set of new tax relief. Every taxable person is entitled to this relief.
They are: Consolidated Relief: This relief is equal to N200,000 or 1% of Gross income whichever is higher Plus 20% of Gross income.
Tax Table
The BELOW tax table rates must be applied to the Net “taxable income” to get tax payable. Net taxable income is derived after deducting the following from Gross Taxable Income;
(a) Tax Exempts
(b) Consolidation Relief Allowance (CRA)

Here is the current tax table:
Annual Rate
First N300,000 7%
Next N300,000 11%
Next N500,000 15%
Next N500,000 19%
Next N1,600,000 21%
Over N3,200,000 24%


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