a) Annualize the data in {(a) of Payroll Computation} and transfer to the personal income tax template.

b) Ensure any applicable statutory deductions are taken into consideration and deduct same from the gross emoluments;

i. Minimum of 8% of basic, housing and transport allowances for Pension deduction. If there are employees who make voluntary contribution, the actual contribution contributed should be taken into consideration.
ii. 2.5% of basic pay for NHF deduction, if remitted by the company.
iii. 5% of basic pay for NHIS deduction, if remitted by the company.
iv. Life insurance remittance should be taken into consideration, if remitted by the company.

c) Calculate the consolidated relief allowance which is ₦200,000 or 1% of gross emoluments (whichever is higher) + 20% gross emoluments (gross emoluments can be defined as income from all sources less all non-taxable income, income on which no further tax is payable, tax exempts listed in paragraph (2) of the sixth schedule of PITA and all allowable business expenses and capital allowances).

d) Total relief is calculated as the addition of consolidated relief allowance and all statutory deductions. Total relief is then deducted from the gross emoluments to give the taxable income.

e) The tax table is then applied to the taxable income to calculate the PAYE liability. The tax table is given below:
i. First ₦300,000 at 7%
ii. Next ₦300,000 at 11%
iii. Next ₦500,000 at 15%
iv. Next ₦500,000 at 19%
v. Next ₦1,600,000 at 21%
vi. Above ₦3,200,000 at 24%

f) The PAYE liability generated from the tax computation should be remitted to the appropriate state government (e.g For staff residents in Lagos, their PAYE will be remitted to LIRS, for Ogun State, OGIRS etc)
It is worthy of note that employees who earn not more than the National Minimum Wage (currently ₦30,000) are no longer liable to tax or deduction of monthly PAYE.