Every Nigerian who earns an income — whether as an employee, business owner, or professional — is required to pay Personal Income Tax (PIT). Yet, many people are unaware of how it works, the rates applied, and the consequences of non-compliance.
At Faturoti Taiwo & Co., Chartered Accountants, we help individuals and businesses in Nigeria understand their tax obligations and stay compliant with both the Federal Inland Revenue Service (FIRS) and state tax authorities like the Lagos State Internal Revenue Service (LIRS).
This guide breaks down Personal Income Tax in Nigeria in simple terms.
What is Personal Income Tax (PIT)?
Personal Income Tax (PIT) is a tax imposed on the income of individuals, communities, families, and executors/trustees. It applies to both:
- Residents in Nigeria (on global income, i.e., both local and foreign income)
- Non-residents (on income derived from Nigeria)
PIT is governed by the Personal Income Tax Act (PITA), 2011 (as amended).
Who Pays Personal Income Tax in Nigeria?
You are required to pay PIT if you fall into any of these categories:
- Employees in the public or private sector
- Self-employed individuals (e.g., freelancers, traders, consultants)
- Business owners (sole proprietors or partners)
- Professionals such as lawyers, doctors, and engineers
How is PIT Collected?
- For Employees (PAYE System):
Employers deduct PIT from staff salaries under the Pay-As-You-Earn (PAYE) scheme and remit monthly to the relevant State Internal Revenue Service (SIRS). - For Self-Employed Individuals:
You must file an annual self-assessment return and pay PIT directly to your state’s tax authority.
Personal Income Tax Rates in Nigeria (Progressive)
PIT in Nigeria is progressive, meaning higher income attracts higher tax rates:
- First ₦300,000 → 7%
- Next ₦300,000 → 11%
- Next ₦500,000 → 15%
- Next ₦500,000 → 19%
- Next ₦1,600,000 → 21%
- Above ₦3,200,000 → 24%
🔗 See official FIRS guidelines on PIT
PIT Filing Deadlines in Nigeria
- Employees (PAYE): Employers must remit deductions by the 10th of the following month.
- Annual Returns: Due by 31 January (Employers) and 31 March (Self-employed individuals).
Failure to file or pay on time attracts penalties, interest, and potential legal action.
Common PIT Mistakes Nigerians Make
- Failing to file annual returns
- Under-declaring income
- Using personal accounts for business transactions
- Not keeping proper records of expenses and allowances
Why PIT Compliance Matters
✅ Avoids penalties and interest charges
✅ Builds credibility for business owners and professionals
✅ Necessary for securing government contracts and loans
✅ Promotes national development through taxation
How Faturoti Taiwo & Co. Can Help You
At Faturoti Taiwo & Co., we provide expert support in:
- PIT registration and self-assessment filing
- PAYE management for employers
- Tax advisory and planning to reduce liabilities
- Resolving disputes with tax authorities
Contact us today to simplify your tax compliance in Nigeria.
Personal Income Tax (PIT) is an unavoidable responsibility for all Nigerians who earn an income. By understanding the rates, filing process, and deadlines, you can stay compliant and avoid costly penalties.
With the guidance of professionals like Faturoti Taiwo & Co., paying PIT becomes stress-free — giving you peace of mind and the confidence to focus on building your career or business.