Nigeria PAYE Payroll Compensation Template

Over the years, several changes have been made to  the Nigerian Personal Income Tax Law . The latest amendment was in 2012 when the President Goodluck Jonathan Administration signed into law an Amended Personal Income Tax Act, replacing several controversial sections of the act with a simpler and easy to calculate taxable income.

Salary earners in Nigeria are mandated by law to pay tax under the Pay As You Earn (PAYE) scheme. Every month a portion of an employee salary is deducted as tax leaving the employee with a net salary to take home.

Taxes under the PAYE scheme fall under the jurisdiction of the State Inland Revenue Service, meaning that all the taxed you pay are remitted to the state of your residence.

So as a company with office is say Enugu State, you remit your employees PAYE to their resident state. If for example a worker in Ogun State but work in your office in Lagos, they are liable to pay tax to Ogun State and not Lagos State.

The new amendments affect several sections of the Personal Income Tax Act, particularly Section 33 which deals with Personal Relief and Relief for Children, dependants etc. This has now being replaced with a Consolidated Relief Allowance (CRA) of N200,000 + 20% of gross income.

This template provides you a details excel that automates calculations of your employee compensation. You just need to enter the gross annual pay and it calculates the rest for you. See preview below.

How to Use the PAYE Payroll Compensation Template

• After Downloading the template
• Open with Microsoft Excel Application (Any version older than 2007)
• Under Total Package column for each employee, Enter the Annual gross Salary