How is CRA calculated in Nigeria?
The CRA is the higher of 1 percent of gross income or 200,000.00 Nigerian naira (NGN), plus an additional 20 percent of gross income.
Based on Section 33(1) of the PIT Act, CRA is computed as 'the higher of ₦200,000 and 1% of Gross Income + 20% of Gross Income'.
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Schedule 6 PITA.
| Annual Taxable Income (NGN) | Rates | Tax payable per annum (NGN) |
|---|---|---|
| Next 300,000 | 11% | 33,000 |
| Next 500,000 | 15% | 75,000 |
| Next 500,000 | 19% | 95,000 |
Payroll in Nigeria
Income tax rates range from 7% to 24%.
Minimum income tax
Employees who earn not more than the National Minimum Wage (currently N30,000) are no longer liable to tax or deduction of monthly PAYE.
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If 25% of the interest is higher
- $3,200 (interest if no payments were made)
- times by 25% (percentage rate)
- equals $800 (total using the 25% calculation)
If you make ₹ 50,000 a year living in India, you will be taxed ₹ 6,000. That means that your net pay will be ₹ 44,000 per year, or ₹ 3,667 per month.
13th Salary
There are no statutory requirements for 13th-month salary payments. However, bonuses are common at the discretion of the employer.
| Net Income | Income Tax Rate |
|---|---|
| Rs.2.5 lakhs to Rs.5 lakhs | 5% of (Total income - Rs.2.5 lakhs) |
| Rs.5 lakhs to Rs.10 lakhs | Rs.25,000 + 20% of (Total income - Rs.5 lakhs) |
| Above Rs.10 lakhs | Rs.1,12,500 + 30% of (Total income - Rs.10 lakhs) |
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Tax rates.
| Annual taxable income (NGN) | Rate | Tax payable per annum (NGN) |
|---|---|---|
| Next NGN300,000 | 11% | 33,000 |
| Next NGN500,000 | 15% | 75,000 |
| Next NGN500,000 | 19% | 95,000 |
| Next NGN1,600,000 | 21% | 336,000 |
How is basic salary calculated in Nigeria?
The basic pay is usually 40% of gross income or 50% of an individual's CTC. Basic salary = Gross pay- total allowances (medical insurance, HRA, DA, conveyance, etc.)
This deduction is limited to 27.5% of the employee's total income.
Dividends, interest, rents, and royalties earned abroad and brought into Nigeria through government-approved channels are exempt from Nigerian tax; otherwise, the income is taxable at the CIT rate applicable based on the classification of the company (i.e. small, medium, or large) and tertiary education tax at 2%.
Pay As You Earn ( PAYE )
Most people pay Income Tax through PAYE . This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension. Your tax code tells your employer how much to deduct.
For individuals, gross income is the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes. The PAYE calculated as a result is based on the employee's earnings and includes basic salaries, bonuses, fringe benefits and other allowances.
Income tax
The interest rate used to calculate taxable benefits for employees and shareholders from interest‑free and low-interest loans will be 1%. The interest rate for corporate taxpayers' pertinent loans or indebtedness will be 4.15%.
If you have a balance owing for the 2021 tax year and are unable to pay it by the April 30 payment due date, the CRA will start charging you compound daily interest as of May 1, 2022. This includes any balance owing if your return has been reassessed.
You may have to pay tax by instalments if your income does not have enough tax withheld or if you are self-employed, have rental or investment income, certain pension payments, or have income from more than one job.
If you make ₹ 500,000 a year living in India, you will be taxed ₹ 74,416. That means that your net pay will be ₹ 425,584 per year, or ₹ 35,465 per month. Your average tax rate is 14.9% and your marginal tax rate is 29.0%.
If you make ₹ 70,000 a year living in India, you will be taxed ₹ 8,400. That means that your net pay will be ₹ 61,600 per year, or ₹ 5,133 per month. Your average tax rate is 12.0% and your marginal tax rate is 12.0%.
How do I calculate tax on my salary in Excel?
Write the formula =B2-B3-B4 inside the formula bar and press the Enter key. Step 4: Taxable income is now extracted from gross income, which is 2,19,000. "Taxable income is on which we apply the tax." "Tax is 5% on income below 2,50,000." As the taxable value is between 1.5 to 2.5 lakhs so that 5% will apply to income.
| Income Tax Slab | TDS Deductions | Tax Payable |
|---|---|---|
| Up to Rs.2.5 lakhs | NIL | NIL |
| Rs.2.5 lakhs to Rs.5 lakhs | 5% of (Rs.5,00,000-Rs.2,50,000) | Rs.12,500 |
| Rs.5 lakhs to Rs. 6.33 lakhs | 20% of (Rs.6,33,000-Rs.5,00,000) | Rs.26,600 |
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How to calculate income tax? (See example)
| Up to Rs 2,50,000 | Exempt from tax | 0 |
|---|---|---|
| Total Income Tax | Rs 12,500 + Rs 25,500+ Rs 37,500 + Rs 50,000 + Rs 62,500 + Rs 1,77,600 + Rs 14,604 | Rs 3,79,704 |
| Net Income | Income Tax Rate | Education Cess |
|---|---|---|
| Rs.5 lakhs to Rs.10 lakhs | Rs.25,000 + 20% of (Total income - Rs.5 lakhs) | 2% of income tax |
| Above Rs.10 lakhs | Rs.1,12,500 + 30% of (Total income - Rs.10 lakhs) | 2% of income tax |
- First Year $250 (half of $500) x 20% = $50 expense claim. This leaves a value of $450 next year.
- Second Year $450 x 20% = $90 expense claim. This leaves a value of $360 next year.
- Third Year $360 x 20% = $72 expense claim. ...
- You continue depreciating the desk this way until you are at $0.
