Payroll Management involves managing the total emoluments of the members of staff of an entity to ensure that the total amount of emolument is captured and all statutory deductions are entered to arrive at the net pay, which is the take home pay for the staff.
Payroll Management is not completed until remittances are made to the relevant Tax Authorities and submission of monthly and annual reports promptly without incurring any penalties.
In Nigeria, the following deductions will be made and remitted to the relevant authorities:
P.A.Y.E. – Every month
Pension – Every month
Development Levy – Once in a year
The rate for P.A.Y.E is the rate for Personal Income Tax, which is
First N300,000.00 @ 7%
Next N300,000.00 @ 11%
Next N500,000.00 @ 15%
Next N500,000.00 @ 19%
Next N1,600,000.00 @ 21%
Above N3,200,000.00 @ 24%
Pension is contributory. The employer contributes minimum of 10% while the employee contributes 8%. Deductions for P.A.Y.E must be remitted with the schedule not later than 10th day of the following month. Pension is remitted to the Pension Fund Custodian, not later 7 (seven) days after payment of salary, accompanied by the deductions and payment schedule.
If you have any questions, please let me know.
Adebola Olubanjo