How does someone pay his personal tax? Does he go to website or through his bank account? Is it every month or at the end of the year? What is the process like
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How does someone pay his personal tax? Does he go to website or through his bank account? Is it every month or at the end of the year? What is the process like
How you pay tax depends on how you earn your income. Yes. Not everyone pays tax the same way. 1. If You Are a Salary Earner (PAYE) This is the most common. PAYE means: 👉 Pay As You Earn In this case: • your employer deducts tax from your salary • they remit it to the government Through your State InRead more
How you pay tax depends on how you earn your income.
Yes.
Not everyone pays tax the same way.
1. If You Are a Salary Earner (PAYE)
This is the most common.
PAYE means:
👉 Pay As You Earn
In this case:
• your employer deducts tax from your salary
• they remit it to the government
Through your State Internal Revenue Service
(e.g., Lagos State Internal Revenue Service if you work in Lagos)
So for you:
✓ you don’t pay manually
✓ it is done monthly automatically
2. If You Are Self-Employed / Business Owner
This is different.
You are responsible for your own tax.
How You Pay
You can pay through:
Option A: Online
Via your state tax portal
(e.g., Lagos State Internal Revenue Service website)
Option B: Bank Payment
You can:
• generate a tax assessment
• pay through designated banks
3. Is It Monthly or Yearly?
For Salary Earners:
✓ Paid monthly (automatically deducted)
For Self-Employed:
✓ File returns once a year
Deadline is usually:
👉 March 31st every year
4. What Is the Process Like? (Self-Employed)
Step 1: Register for Tax (Get TIN)
With:
👉 Federal Inland Revenue Service
or your state tax office
Step 2: File Annual Tax Return
You declare:
• your total income for the year
• your expenses (where applicable)
Step 3: Get Tax Assessment
Government calculates how much you should pay.
Step 4: Make Payment
You can:
• pay online
• or through bank
Step 5: Collect Receipt / Clearance
This proves you are tax compliant.
Let Me Be Honest With You
Many people ignore tax because:
• they don’t understand it
• they think it’s complicated
But it becomes simple once you know your category.
Final Truth
👉 Salary earners: tax is deducted monthly
👉 Self-employed: you file and pay yearly
Let Me Leave You With This
Tax is not just an obligation.
It is part of your financial identity.
So ask yourself:
• Am I compliant?
• Do I understand how my income is taxed?
Because in today’s system…
✓ proper tax record affects:
• loans
• investments
• financial opportunities
Rose Ejituru
See lessWell, I am working in a factory and I hear they deduct tax money from my wages every month.
Well, I am working in a factory and I hear they deduct tax money from my wages every month.
See lessSalary tax and investment tax are NOT the same thing. They are treated differently in Nigeria. Let Me Explain With a Simple Story Imagine Mama Ngozi has two sources of money: 1. She works in a factory and earns salary 2. She also sells tomatoes in the market Will both be taxed the same way? No. ThatRead more
Salary tax and investment tax are NOT the same thing.
They are treated differently in Nigeria.
Let Me Explain With a Simple Story
Imagine Mama Ngozi has two sources of money:
1. She works in a factory and earns salary
2. She also sells tomatoes in the market
Will both be taxed the same way?
No.
That is exactly how this works.
1. Your Salary (Why Tax Is Deducted Monthly)
When you work in a company:
Your employer uses a system called:
✓ PAYE (Pay As You Earn)
This means:
• tax is deducted from your salary every month • it is sent to government on your behalf
Through your state tax authority like Lagos State Internal Revenue Service (if you work in Lagos)
So for your salary:
✓ tax is compulsory
✓ tax is deducted automatically
2. Your Investments (Different System)
Now let’s come to shares.
When You SELL Shares
As explained earlier:
✓ no tax on your profit (currently in Nigeria)
When You Receive Dividends
✓ 10% withholding tax is deducted automatically
You don’t need to pay anything yourself.
So Why the Difference?
Good question.
Salary
• stable income • regular • easy to track
So government taxes it directly.
Investments
• not consistent • involves risk • can go up or down
So tax is handled differently.
Let Me Be Honest With You
Many people think:
“If government taxes my salary, they must tax everything else the same way.”
That is not how the system works.
Simple Summary
• Salary → taxed monthly (PAYE) • Selling shares → no tax • Dividends → 10% tax (already deducted)
Final Truth
You are not being cheated.
✓ You are just seeing different types of income being treated differently
Let Me Leave You With This
Instead of being confused, ask yourself:
• Where is my money coming from?
Because once you understand the source of income…
You will understand how it is taxed.
I HOPE THIS HELPS
See lessPaying personal income tax in Nigeria depends on how you earn your income. There are two main ways: 1. If You Are Employed (Salary Earner) If you work for a company or organization: Your tax is deducted automatically every month This is called Pay-As-You-Earn (PAYE) Your employer deducts and sends iRead more
Paying personal income tax in Nigeria depends on how you earn your income. There are two main ways:
1. If You Are Employed (Salary Earner)
If you work for a company or organization:
Your tax is deducted automatically every month
This is called Pay-As-You-Earn (PAYE)
Your employer deducts and sends it to your State Internal Revenue Service
For example:
If you work in Rivers State → tax goes to Rivers State Internal Revenue Service
If you work in Lagos → tax goes to Lagos State Internal Revenue Service
How Often?
Every month (automatically deducted from salary)
What You Should Do
Usually nothing — just:
Make sure your employer gives you Tax Clearance Certificate (TCC) yearly
2. If You Are Self-Employed / Business Owner / Freelancer
You must pay your tax yourself.
Examples:
Business owners
Traders
Freelancers
Consultants
Side hustle earners
How Often?
Once every year (Annual Personal Income Tax)
Deadline:
Usually March 31 every year
How to Pay Personal Tax (Self-Employed)
Here is the normal process:
Step 1 — Register With Your State Tax Office
Register with your State Internal Revenue Service
Example:
Rivers → Rivers State Internal Revenue Service
You will get:
Tax Identification Number (TIN)
Step 2 — Declare Your Income
You tell them:
How much you earned in a year
Your expenses (if applicable)
This is called Tax Filing
Step 3 — Tax Assessment
The tax authority calculates:
How much tax you should pay
Based on:
Personal Income Tax Act
Step 4 — Pay the Tax
You can pay through:
Bank (using payment slip)
Online tax portal
POS (some tax offices allow this)
Many states now allow online payment.
Example:
Rivers State online portal (if available)
Remita payment platform (commonly used)
Federal vs State Tax (Important)
Personal Income Tax → Paid to State Government
Company Tax → Paid to Federal Inland Revenue Service
Example
Let’s say:
You run a small business
You earn ₦1,200,000 per year
You:
Register with tax office
File yearly
Pay tax once a year
Do You Always Have To Pay?
Some people pay very small tax:
Low income earners
Small traders
Some states even charge:
Flat tax (₦5,000 — ₦20,000 yearly)
Why Paying Tax Is Important
Tax Clearance Certificate (TCC)
Government contracts
Loan applications
Visa applications
Business credibility
See less