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2.1ÌýÌýÌýÌý Withholding of income tax

Any employees who only earn the national minimum wage (NMW), based on the National Minimum Wage Act or less are not taxable and not subject to monthly PAYE withholding. The current NMW is NGN 70,000 per month

The Personal Income Tax Act (PITA) is the main legislation that applies to personal taxpayers. Towards the end of the link provided, there is subsidiary legislation which includes the Operation of Pay As You Earn (PAYE) Regulations. This contains the rules around the withholding system.

Very few details on how to calculate PAYE are included in the PITA or the Regulations. The employer must take into account the employee's cumulative employment income for the year to date, their cumulative net earnings after deductions and allowances, their various cumulative taxable earnings and cumulative tax.

Taxable earnings

Employment income is defined in the Personal Income Tax Act (PITA), s 3(b) as any:

1. Ìý

   •ÌýÌýÌýÌý salary

2. Ìý

   •ÌýÌýÌýÌý wage

3. Ìý

   •ÌýÌýÌýÌý fee

4. Ìý

   •ÌýÌýÌýÌý allowance, or

5. Ìý

   •ÌýÌýÌýÌý other gain or profit