Tax on compensation for loss of employment
If you receive compensation for losing your job or office, the Nigeria Tax Act, 2025 leaves the first ₦50,000,000 untaxed. Enter the amount to split it.
How it's calculated
- Compensation up to ₦50,000,000 is not a chargeable gain.
- If it is more, only the amount above ₦50,000,000 counts as a chargeable gain.
An example
On ₦60 million of compensation, ₦50 million is free and ₦10 million is a chargeable gain.
Frequently asked questions
What payments does this cover?
Compensation or damages for a wrong or injury to you, in your person or profession, including compensation for loss of office or employment.
Does it cover my final salary and leave pay?
No. Salary, leave allowance and other pay you earned are employment income and go through PAYE.
Who has to report the payment?
The person who pays compensation for loss of office or employment has duties under the Act. Ask your employer how it will be reported.
Key terms
- Chargeable gain
- A gain that the Nigeria Tax Act brings into tax.
- Compensation for loss of office
- A payment made because a job or position ended.
Up-to-date official data
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