PAY-AS-YOU-EARN AND PAYSLIP

PAY-AS-YOU-EARN AND PAYSLIP

PAY-AS-YOU-EARN Pay-as-you-earn is a tax deducted from employee salary account and remitted on or before the 10th day of the month following the month in which salaries were paid. See relevant sections of the Personal Income Tax Act (PITA). (S.81 of Personal Income Tax Act Cap P8 LFN 2011). S. for details WHAT IS TAXABLE ENTITLEMENT (GROSS) OR GROSS EMOLUMENTS This is the total amount your employer pay to you as salary including all benefits arising from employment. It can be a inform of wages, salaries, allowances including benefits in kind, gratuities, superannuation and any other incomes derived solely by reason of employment. All manner of allowance you earn, provided it’s not a re-imbursement of expense to you, is taxable.  Finance Act 2020, defined “gross income” as income from all sources less non-taxable income, tax-exempt items listed in Paragraph (2) of the Sixth Schedule and all allowable business expenses and capital allowance (finance-act-2020). This is addition to the Act. For example, if you spend an amount for training outside your station and the money is refunded or reimburse through your payslip, it must be subjected to tax. All pay not intended to be taxed must not be passed through payroll. Pay like training cost, transport to attend training etc. TAX RELIEF (TAX ALLOWANCE) This is amounts that can be deducted from a person’s annual income to reduce the amount on which tax is paid. Or the amount of your income which is exempt from tax aside from other statutory deductions. Consolidated relief allowance of N200, 000 or 1 per cent of gross salary or whichever is higher plus 20...
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