Pay As You Earn [P.A.Y.E] Registration and Administration

Pay As You Earn [P.A.Y.E] Registration and Administration

 

Personal Income Tax (PIT) - PAYE Registration

Registers your business as an employer with the State Internal Revenue Service,  Payment of the directors, business owners and the  employees via the PAYE system.and provides payroll services for your business or company with payslips and calculating all deductions and  taxes.

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"Fast registration Quicker than trying to register yourself. With employers reference number"

* We compute PAYE remittance for our clients on monthly basis *

All employers should register with the relevant state tax authority, such as Lagos Inland Revenue Service (LIRS) for income tax withholding. The PAYE Regulations, 2003 made pursuant to the Personal Income Tax Act provides that all employers are to register with the State Board of Internal Revenue Tax Office nearest to the registered company address for the purpose of remitting income tax deducted from their employees.

In accordance with Personal Income Tax Act 1993 (NO 104) operation of  P.ay As You Earn (PAYE) Regulations 2003. The employer must within 6 months of commencing a business deduct tax from emoluments of employees and remit the amount deducted to any of the designated collecting banks.

Requirements

The registration requirements are as follows:
a) A copy of certificate of incorporation.or business name registration
b) List of staff and their annual salaries.
c) The Directors’ Tax Clearance Certificates (now Electronic Tax Clearance Certificate)
d) Letter of application for registration.

Upon completion of registration, an Employer's Identification Number will be issued.. An employers who fails or refuses to register commits an offence and is liable on conviction to pay N25,000 in addition to the payment of arrears of the tax due.

Personal Income Tax (PIT) Rates

The current rates applicable to the chargeable income rates:

  • Below N300,000 @ 1 per cent
  • 1st N300,000 @ 7 per cent
  • Next N300,000 @ 11 per cent
  • Next N500,000 @ 15 per cent
  • Next N500,000 @ 19 per cent
  • NextN1,600,000 @ 21 per cent
  • Above N3,200,000 @ 24 per cent

The sixth schedule of PITA, 2011 (Amendment), listed the following as tax exempt:

a) National Housing Fund contributions.
b) National Health Insurance Scheme contributions.
c) Life Assurance Premium.
d) National Pension Scheme.
e) Gratuities

Deduction and Remittance of Tax

The employer must within six months of commencing a business deduct tax from emoluments of his employees and remit the amount so deducted to any of designated collecting banks in the state.

Where an employee works under the supervision or management of a person who is not his employer, that person (hereinafter referred to as the “manager”) must furnish the particulars of the employee’s emoluments to the Tax Office nearest to the company and the manager must deduct the tax due from the employee’s emoluments and remit same to any of the designated collecting banks. 

Within ten days of the end of every month, an employer must pay all deductions made from his employees as well as all other taxes due to the nearest tax office or to any of the aforementioned designated banks. An employer who fails to make proper tax deduction or fails to account properly for deductions made commits an offence and is liable on conviction to a penalty of the total sum of taxes due and 10% per annum thereon. Employer are also liable to interest and penalty for late or non-remittance.

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Records of Deduction

An employer must provide the following particulars regarding emoluments of each employee on a monthly basis:

  1. The name of the employee
  2. The Taxpayer’s Identification Number
  3. The address of the employee
  4. The month of payment
  5. The amount of emolument for the month
  6. The contribution by the employee to approved pension funds in the month
  7. The cumulative tax free emoluments year-to-date
  8. The cumulative net emoluments year-to-date
  9. The cumulative taxable emoluments year-to-date
  10. The corresponding cumulative tax and The tax, if any, deducted or repaid on making the payment for the month.

This information may be sent to the inland revenue through the collecting bank in an electronic format.

Employer Annual Declaration and Certification Form H1

Employer should return the annual declaration and certification Form H1, not later than 30 days after the end of each year, an employer must render to the State Branch Inland Revenue (SBIR) or Tax Office where he is registered Form H1, a return in respect of each employee showing the 6 total emoluments of each employee during the year, the tax relief, if any and the total tax deducted from the employee.

Due date for filing  Annual Personal Income Tax Return 

Latest on 31 of January of the following year 
Penalty of N500,000 for failure to file on or before 31 January of the following year. 

Due date for remittance of Pay As You Earn (PAYE)

Latest by the 10th day of the following month. 
Penalty  - 10% penalty of the amount due and interest atcommercial rate per annum for failaure to remit the tax. 

PROCESSING PERIOD

Processing period 5 - 7 working days, but allow upto 10days

APPLY NOW

To make an application for Pay As You Earn [P.A.Y.E] processing using our service

Complete the online Application Request Form.

If you would like to use this service please CONTACT US.

For Pricing and packages click here