All ur salary and allowances are taxable. Ur reliefs are consolidated relief, NHF, pensions and voluntary contribution

FatokiFemi48:



one fact most people fail to understand is that 13th month salary is not a bonus but rather be a normal salary being worked for as an employee.

Go to your calendar, you would see that month February is the only month with normal days outline.

A simple arithmetic shows that a month should have 4 weeks multiplied by 7 days to give you 28 days as normal.

Every other month has additional 2 to 3 days making it has 30 or 31 days within.

Now sum up these extra 2 to 3 days on the rest eleven months in a year, you definitely get 29 days as your answer, resulting to another month.

Hence you agree with me that 13th month salary is never a bonus to you but an accumulated extra 29 days in a calendar year which ought to be taxed like your regular salary.

You are right. 13th month is your salary oooooo, so it will be taxed. For those saying its Leave allowance, no no, it is not. I collect both my Leave allowance and 13th month salary.

praxs:
Salute great nairalanders!

I work with a multinational organization. We are paid 13thmonth salary (bonus) at year end. However, tax is deducted and we end up getting net instead of gross. I tried to search online to see what the Nigerian tax law states as to taxation of 13month salary but couldn't find any.

To that, I brought it here for the experienced and learned heads to throw light on the subject. Please is it taxable? And where can I get where the Nigerian tax law talks about this so I can follow it up in my organization

/
Every income no matter the semantics is taxable except inheritance, gifts, bequests. A bonus is not a gift and tend to attract flat tax rate.

Accountants can reclassify it to make it tax exempt. Instead of salary or bonus, they can term it something fanciful to escape the tax man. Why was Lazarus hated by the people in the bible story?


/

We were paid 13th month as a government agancy by the IPPIS, but our department deducted it from our salaries. That the money was pay in error.

FatokiFemi48:



one fact most people fail to understand is that 13th month salary is not a bonus but rather be a normal salary being worked for as an employee.

Go to your calendar, you would see that month February is the only month with normal days outline.

A simple arithmetic shows that a month should have 4 weeks multiplied by 7 days to give you 28 days as normal.

Every other month has additional 2 to 3 days making it has 30 or 31 days within.

Now sum up these extra 2 to 3 days on the rest eleven months in a year, you definitely get 29 days as your answer, resulting to another month.

Hence you agree with me that 13th month salary is never a bonus to you but an accumulated extra 29 days in a calendar year which ought to be taxed like your regular salary.

U do realize every coy doesn't pay 13th month so wat do u say about that? So this maths u did is applicable or Shud they complain to their employers of being cheated? 13th month isn't really a salary.

tempex88:
It's taxable. All incomes are taxable home and abroad except those with specific exemptions like income from govt bonds etc

13th month salary is not taxable, i also receive same from my company every year and its paid in full. 13th month is a bonus, that is why some companies dont pay it

praxs:
Salute great nairalanders!

I work with a multinational organization. We are paid 13thmonth salary (bonus) at year end. However, tax is deducted and we end up getting net instead of gross. I tried to search online to see what the Nigerian tax law states as to taxation of 13month salary but couldn't find any.

To that, I brought it here for the experienced and learned heads to throw light on the subject. Please is it taxable? And where can I get where the Nigerian tax law talks about this so I can follow it up in my organization

13th month salary is not taxable, i also receive same from my company every year and its paid in full. 13th month is a bonus, that is why some companies dont pay it

joeyswift:
People misinterpret their leave allowance as the 13th month salary. When you go on leave you are paid an extra salary as your eave allowance. But in a situation where u do not go on leave throughout the year,the allowance is paid at the end of the year and we assume its the 13th month salary

leave allowance is not compulsory, not every Organization pay leave allowance. Same goes for 13 month

mj:


You are right. 13th month is your salary oooooo, so it will be taxed. For those saying its Leave allowance, no no, it is not. I collect both my Leave allowance and 13th month salary.

Get your facts right, 13th month is not taxable

ednut1:
All ur salary and allowances are taxable. Ur reliefs are consolidated relief, NHF, pensions and voluntary contribution

13th month salary is not taxable, i also receive same from my company every year and its paid in full. 13th month is a bonus, that is why some companies dont pay it

FatokiFemi48:



one fact most people fail to understand is that 13th month salary is not a bonus but rather be a normal salary being worked for as an employee.

Go to your calendar, you would see that month February is the only month with normal days outline.

A simple arithmetic shows that a month should have 4 weeks multiplied by 7 days to give you 28 days as normal.

Every other month has additional 2 to 3 days making it has 30 or 31 days within.

Now sum up these extra 2 to 3 days on the rest eleven months in a year, you definitely get 29 days as your answer, resulting to another month.

Hence you agree with me that 13th month salary is never a bonus to you but an accumulated extra 29 days in a calendar year which ought to be taxed like your regular salary.

This your explanation is too deep jare, but whichever way 13th month is not taxable. i have worked with 4 multinational companies and i do receive 13th month in full

It shouldn't be actually. At the end sticking to what the offer letter says is key

Your 13th month salary is an earned income so it is very much taxable. Same with your wage/bonus/allowance for working overtime. This may seem to betray common sense as some people on this thread have argued, but Taxation is about laws and principles and not what should or what ought to be.

However, you’re entitled to certain consolidated relief allowances which are tax deductible. Your contribution of 2.5% of your gross salary for the National Hoising Fund, 5% of your gross salary for NHIS, 8% of your gross emoluments (basic salary, housing and transport) as your pension contribution etc.

Oga Jarus may have one or two professional opinion on this as a tax expert.

Gracias!

bharkarh:
I agree with your point, however, 13 month salary is not subjected to be taxed as the extra 2-3 days in each months of the year has already been taxed. I work with a private organization and my 13 month salary has never been taxed.

Ask your tax or account manager
The company is the one taking care of tax elements on benefits you received but not taxed

Suko110:
Its a gift its suppose to be exempted from tax

gift are not exempted from tax

Bigsteveg:

13th month salary is not taxable, i also receive same from my company every year and its paid in full. 13th month is a bonus, that is why some companies dont pay it

Bro, it's taxable according to the Nigerian Law (Personal Income Tax Act). However, so many organizations don't pay tax on it. In fact, some organizations don't pay tax on the total salary which is why some of them have two salary accounts; one for upfronts, another for end of the month. They remit only on the end of the month's salary.

Section 3 (a) & (b) of Personal Income Tax Act - INCOME CHARGEABLE - "gain or profit from any trade, business, profession or vocation... (b) any salary, wage, fee, allowance or other gain or profit from employment including compensations, bonuses, premiums, benefits..."

@OP, I hope the above cited answers your question. 13th month whether a gift, bonus or allowance is taxable.

Nyerhovwo101:
gift are not exempted from tax

Yea

FatokiFemi48:



one fact most people fail to understand is that 13th month salary is not a bonus but rather be a normal salary being worked for as an employee.

Go to your calendar, you would see that month February is the only month with normal days outline.

A simple arithmetic shows that a month should have 4 weeks multiplied by 7 days to give you 28 days as normal.

Every other month has additional 2 to 3 days making it has 30 or 31 days within.

Now sum up these extra 2 to 3 days on the rest eleven months in a year, you definitely get 29 days as your answer, resulting to another month.

Hence you agree with me that 13th month salary is never a bonus to you but an accumulated extra 29 days in a calendar year which ought to be taxed like your regular salary.

Don't they go on leave?

Suko110:

Nice point, but let me ask you
Do you get payed weekly?
If no, your employer could choose to not pay you the so called 13th month and nothing will happen. Its simply a bonus or do we have a 13month calendar year. When it comes to remuneration, its what it is, not logic. Peace

your point made me scrow up and took back my LIKE from the guy u responded to cos i can relate wit ur point. cheers

InvertedHammer:


/
Every income no matter the semantics is taxable except inheritance, gifts, bequests. A bonus is not a gift and tend to attract flat tax rate.

Accountants can reclassify it to make it tax exempt. Instead of salary or bonus, they can term it something fanciful to escape the tax man. Why was Lazarus hated by the people in the bible story?


/

13th month salary is like xmas gift, bonus is different.
ur employer can decide not to giv u 13th month and notin will happen.
u can take ur employer to court for not paying ur normal monthly salary, but u cant take that same employer to court if u r not given 13th month. if u cannot take ur employer to court to make him pay u 13th month, then tax authorities shud have no business with ur 13th month,

Bigsteveg:

13th month salary is not taxable, i also receive same from my company every year and its paid in full. 13th month is a bonus, that is why some companies dont pay it

i work for a firm who is an aunthority in tax . All ur allowances and bonus are taxable jor. Except tins like per diem, travel reimbursebles

praxs:


Can I have reference? I could be wrong but I thought bonuses are exempted from tax

Section 3 (b) of Personal Income Tax Act provides that "any salary, wage, fee, allowance or other gain or profit from employment including compensations, bonuses, premiums, benefits..." are taxable. 13th month is taxable but some organizations don't remit taxes on it.

What is 13months salary itself?

tfelicityk:
What is 13months salary itself?

just like xmas gift from oga at the top

Suko110:
Its a gift its suppose to be exempted from tax

This is the truth. 13th Month should be recorded by your finance department as a 'gift' to their employees. If your Finance Manager doesn't know this, he will keep deducting tax because all income is taxable but not gifts.

tfelicityk:
What is 13months salary itself?

End of year bonus; mostly your basic salary without all other allownaces.

MaziOmenuko:


This is the truth. 13th Month should be recorded by your finance department as a 'gift' to their employees. If your Finance Manager doesn't know this, he will keep deducting tax because all income is taxable but not gifts.



End of year bonus; mostly your basic salary without all other allownaces.

Respect man, but if are to compute for PITA bonus is added to income and taxed, confirm it.

Don't challenge it much,it is a free money,what about we that are not being given

13th month salary is taxable

praxs:
Salute great nairalanders!

I work with a multinational organization. We are paid 13thmonth salary (bonus) at year end. However, tax is deducted and we end up getting net instead of gross. I tried to search online to see what the Nigerian tax law states as to taxation of 13month salary but couldn't find any.

To that, I brought it here for the experienced and learned heads to throw light on the subject. Please is it taxable? And where can I get where the Nigerian tax law talks about this so I can follow it up in my organization

It is taxable, even if you classify them as something we call benefit in kind, which things like allowances fall under, it is still subject to PAYE

bharkarh:
I agree with your point, however, 13 month salary is not subjected to be taxed as the extra 2-3 days in each months of the year has already been taxed. I work with a private organization and my 13 month salary has never been taxed.

ur organization is guilty of tax evasion.
According to PITA 2011(as amended) ur income from ALL sources are taxable, except those specifically exempted.
13th month is part of ur gross emoluments

really in Nigeria a lot of companies use this to short pay their employees. but i tell you even an employee that has his/her contract terminated is due to have his/her 13th month pay computed and paid. read this article from the link :https://www./20140926144346-127356420-13th-month-pay-the-employees-rights-and-employers-obligation/

dnawah:
prove and leave your answers to d nearest references.thanks in advance.