Compute, review, or advise on end-to-end Nigerian monthly payroll for employees — gross-to-net calculation, payslip generation, statutory deduction sequencing (Pension, NHF, NHIS, CRA, PAYE), employer remittance scheduling (PAYE to SIRS, Pension to PFC/PFA, NHF to FMBN, NSITF to NSITF), and year-…
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Employee Pension contribution rate
8% of BHT (Basic + Housing + Transport)PRA 2014 §4(3)
Employer Pension contribution rate
10% of BHT (Basic + Housing + Transport)PRA 2014
Employee NHF contribution rate
2.5% of basic salary
NHF applicability threshold (monthly basic salary)
NGN 3,000 per month
NHIS employee contribution rate (federal MDAs, common default)
5% of emloyee's basic salary monthlynational health insurance authourity
Consolidated Relief Allowance (CRA) — annual minimum floor
The Consolidated Relief Allowance (CRA) was completely abolished and replaced in the Personal Income Tax (PIT) regime. It no longer exists for payroll and tax computations.nigerian tax act 2025
Minimum tax rate (NTA 2025)
0.15nigerian tax act 2025
PAYE monthly remittance deadline
10th of the following monthPITA
Pension remittance deadline (employee + employer combined)
Scope note: This skill is the end-to-end monthly payroll orchestrator. It does NOT redefine PAYE brackets, CRA formulas, pension percentages, or NHF thresholds — those live in the dependency skills (
ng-paye,ng-statutory-deductions). This skill defines the sequence, the payslip layout, the remittance calendar, and the year-end reconciliation workflow.2025 changes summary (v1.0): The Nigeria Tax Administration Act 2025 (NTA 2025), passed in Q1 2025 with phased commencement through 2026, introduces a unified payroll module under FIRS Tax Pro-Max intended to consolidate PAYE filings for federal MDAs and (subject to MoU) state Internal Revenue Services. As of the 2025 tax year, state IRS portals (LIRS e-tax, FCT-IRS, OGIRS, etc.) remain the primary PAYE remittance channel for private-sector employers. See Section 5 for the current remittance routing.
Reviewed against the cited tax authorities by Omolola Fasasi on 2026-06-21. Items flagged for further clarification are tracked separately and excluded here. This block is generated from verified
skill_facts— edit the facts, not the prose.
Payroll component order table
| Step | Component | Effect on employee PAYE base | Paid by |
|---|---|---|---|
| 1 | Gross monthly emolument (basic + housing + transport + other taxable allowances + BIK) | Starting point | — |
| 2 | − Employee Pension contribution (8% of BHT, see ng-statutory-deductions) | Reduces PAYE base | Employee |
| 3 | − Employee NHF contribution (2.5% of basic, if applicable) | Reduces PAYE base | Employee |
| 4 | − Employee NHIS contribution (if scheme operated; varies) | Reduces PAYE base | Employee |
| 5 | = Gross income for CRA purposes | — | — |
| 6 | − Consolidated Relief Allowance (CRA) — max(NGN 200,000, 1% × gross) + 20% × gross | Reduces PAYE base | — |
| 7 | = Chargeable income | — | — |
| 8 | Apply PITA Sixth Schedule progressive brackets (see ng-paye) | → PAYE liability | — |
| 9 | = PAYE for the month | — | Employee (withheld) |
| 10 | Net pay = Gross − Employee Pension − Employee NHF − Employee NHIS − PAYE − any voluntary deductions | — | — |
The order of deductions matters because Pension and NHF reduce the chargeable income before PAYE is computed, while NSITF, ITF, EDT and the employer pension share are employer costs that do NOT affect the employee's PAYE base.
Employer-side costs (parallel, do NOT affect employee net)
| Component | Rate / amount | Notes |
|---|---|---|
| Employer Pension | 10% of BHT | Remitted to employee's PFA via PFC |
| NSITF (ECS) | 1% of total payroll | Employer-only |
| ITF | 1% of total payroll (employers with ≥ 5 staff OR turnover ≥ NGN 50m) | Annual return |
| EDT (Tertiary Education Tax) | Not employer payroll cost — corporate tax on assessable profits | |
| NHIS employer share | If group scheme operated; varies |
Conservative default: When in doubt whether a deduction reduces the PAYE base, treat it as non-deductible (i.e. PAYE is computed on the higher figure) and flag for reviewer. Over-withholding can be refunded via year-end reconciliation; under-withholding triggers SIRS penalties and interest.
Inputs required to run a payroll table
| Input | Source | Notes |
|---|---|---|
| TIN (Tax Identification Number) | Employee record / JTB | Required for PAYE filing; flag if missing |
| State of tax residence | Employee record | Determines which SIRS receives PAYE (per PITA §2(2)) |
| Gross monthly emolument breakdown | Contract / HR | Must split Basic / Housing / Transport / Other |
| Pension scheme status | RSA + PFA details | Confirm employee has RSA opened |
| NHF applicability | Salary ≥ NGN 3,000/month and Nigerian citizen | See ng-statutory-deductions |
| NHIS scheme details | If operated by employer | Optional except for federal MDAs |
| Marital / dependent status | Not relevant for CRA (Nigeria abolished personal/children allowances in 2020) | Retained only for HR records |
| Benefits in Kind (BIK) for the month | HR / accounts payable | Must be quantified before PAYE |
Refusal catalogue table
| Scenario | Action |
|---|---|
| Cross-border employment (employee tax-resident outside Nigeria, employer in Nigeria) | Refer to a qualified Nigerian tax consultant — treaty analysis required |
| Expatriates with split-pay arrangements (home-country + Nigeria) | Out of scope; refer to specialist |
| Directors' fees not paid through payroll | Out of scope — covered by WHT under ng-paye |
| Employee stock options / share-based payments | Out of scope — bespoke valuation and CGT interaction |
| Salary sacrifice into pension above 8% statutory | Permitted under PRA 2014 §11(7) but flag for reviewer — quantum and PAYE-deductibility need confirmation |
| Termination payments / gratuity > NGN 10m | Flag — exemption thresholds and tax treatment require legal review |
| Backdated salary adjustments spanning > 1 tax year | Refer to specialist — re-opening of prior-year H1 may be required |
The procedure below is the canonical monthly run. Apply per employee.
ng-statutory-deductions for the legislative basis (PRA 2014 §4(3)). (PRA 2014 §4(3))Statutory deductions reducing PAYE base table
| Deduction | Formula | Notes |
|---|---|---|
| Employee Pension | 8% × (B + H + T) | Per PRA 2014 |
| Employee NHF | 2.5% × B | Only if Nigerian citizen AND monthly basic ≥ NGN 3,000 |
| Employee NHIS | Per scheme rules (commonly 1.75% × B for federal MDAs) | Skip if no scheme |
Call these collectively D_pre.
Monthly application: Divide annual CRA components by 12, OR — recommended approach — compute on annualized gross and divide the result by 12. The annualized approach is more accurate when income varies month-to-month and matches the year-end reconciliation. See ng-paye for the canonical formula.
Chargeable_monthly × 12, apply the brackets from ng-paye, divide the result by 12 to get monthly PAYE. The annualized method avoids the regressive distortion that occurs when applying brackets directly to monthly income.ng-paye), substitute the minimum tax. Common for low earners; rare for the salary range typically processed via formal payroll. (PITA §37)Employer-side accruals table
| Item | Posted to |
|---|---|
| Employer Pension 10% × BHT | DR Payroll expense, CR Pension payable |
| NSITF 1% × total payroll | DR Payroll expense, CR NSITF payable |
| ITF 1% × total payroll (qualifying employers) | DR Payroll expense, CR ITF payable (accrued monthly, paid annually) |
A conforming Nigerian payslip must show, at minimum:
Full worked numbers are in Section 7. The layout below is the recommended template.
+-----------------------------------------------------------------+
| ACME NIGERIA LTD PAYSLIP — MAY 2025 |
| 12 Awolowo Road, Ikoyi, Lagos |
| Employer TIN: 12345678-0001 |
+-----------------------------------------------------------------+
| Employee: Adaeze Okafor TIN: 98765432-0001 |
| RSA PIN: PEN100123456789 State of residence: LAGOS |
| Pay date: 28 May 2025 Period: 01-31 May 2025 |
+-----------------------------------------------------------------+
| EARNINGS NGN |
| Basic salary 250,000.00 |
| Housing allowance 100,000.00 |
| Transport allowance 50,000.00 |
| Utility allowance 50,000.00 |
| Meal allowance 50,000.00 |
| Gross emolument 500,000.00 |
+-----------------------------------------------------------------+
| DEDUCTIONS NGN |
| Employee Pension (8% × BHT) 32,000.00 |
| NHF (2.5% × Basic) 6,250.00 |
| PAYE 56,xxx.xx (see §7) |
| Total deductions |
+-----------------------------------------------------------------+
| NET PAY NGN xxx,xxx |
+-----------------------------------------------------------------+
| EMPLOYER CONTRIBUTIONS (info only) NGN |
| Employer Pension (10% × BHT) 40,000.00 |
| NSITF (1% × Gross) 5,000.00 |
| ITF (1% × Gross, accrued) 5,000.00 |
+-----------------------------------------------------------------+
| YTD TOTALS (Jan–May 2025) NGN |
| Gross YTD 2,500,000.00 |
| PAYE YTD [auto] |
| Pension YTD (employee) 160,000.00 |
+-----------------------------------------------------------------+
Monthly remittance calendar table
| Item | Recipient | Deadline | Channel |
|---|---|---|---|
| PAYE | Relevant State IRS (state of employee's tax residence) | 10th of the following month | LIRS e-tax (Lagos); FCT-IRS portal (FCT); other state IRS portals or bank Pay-Direct |
| Employee + Employer Pension | Pension Fund Custodian (PFC) for credit to employee's PFA | Within 7 working days of salary payment date | PFA transfer via PFC; PenCom RSA Multifund schedule |
| NHF | Federal Mortgage Bank of Nigeria (FMBN) | Within 1 month of deduction | FMBN-designated commercial banks |
| NSITF (ECS) | Nigeria Social Insurance Trust Fund | Monthly, by the last day of the following month | NSITF e-portal / designated banks |
| NHIS (if operated) | NHIS / HMO | Per scheme rules — typically monthly | HMO direct |
| ITF (employer only) | Industrial Training Fund | Annual — by 1 April of following year | ITF portal |
ng-paye and ng-statutory-deductions)Late-payment penalties table
| Item | Penalty |
|---|---|
| PAYE late remittance | 10% of unremitted tax + interest at CBN MPR + 5% (PITA §82) |
| Pension late remittance | 2% per month of unremitted amount (PRA 2014 §11(7)) |
| NHF late remittance | NGN 50,000 (individual) / NGN 100,000 (body corporate) + recovery |
| NSITF late remittance | 10% of contribution + interest |
Form H1 field table
| Field | Content |
|---|---|
| Employer details | Name, TIN, address |
| Schedule of employees | Name, TIN, RSA PIN, total gross emolument, total reliefs (CRA, pension, NHF, NHIS), chargeable income, total PAYE remitted by month |
| Reconciliation | Sum of monthly PAYE remitted must equal computed annual PAYE per employee |
| Variance | Any under-remittance is payable; over-remittance is offsetable against the next year (refund procedurally difficult) |
Nigeria has no single statutory equivalent of the Kenyan P9A/P9B form, but employers customarily issue an "Employee Tax Deduction Certificate" at year-end showing:
This certificate enables the employee to claim WHT credits, file self-assessment if they have other income sources, or substantiate income for credit/visa applications.
Reconciliation checklist table
| Check | Pass criterion |
|---|---|
| Sum of monthly Form A (PAYE schedule) = Form H1 total | ✓ |
| Pension contributions remitted = 18% × annual BHT for each employee | ✓ |
| NHF contributions remitted = 2.5% × annual basic for each qualifying employee | ✓ |
| NSITF remitted = 1% × annual total payroll | ✓ |
| ITF annual return filed (if applicable) | ✓ |
Any retroactive bonuses / 13th-month spread per ng-paye rules | ✓ |
| BIK valuations consistent across months | ✓ |
Scenario: Software developer, Lagos resident, NGN 500,000 gross monthly, employed full-time at a private fintech. No BIK. Nigerian citizen. Has RSA, TIN, and is NHF-eligible. Employer operates no NHIS group scheme.
Gross emolument breakdown table
| Component | NGN |
|---|---|
| Basic (50% of gross) | 250,000 |
| Housing (20%) | 100,000 |
| Transport (10%) | 50,000 |
| Utility allowance | 50,000 |
| Meal allowance | 50,000 |
| Gross monthly (G) | 500,000 |
BHT = 250,000 + 100,000 + 50,000 = 400,000
Statutory deductions reducing PAYE base table
| Item | Formula | NGN |
|---|---|---|
| Employee Pension | 8% × 400,000 | 32,000 |
| NHF | 2.5% × 250,000 | 6,250 |
| NHIS | n/a (no scheme) | 0 |
| D_pre total | 38,250 |
PAYE bracket table
| Bracket | Slice | Rate | Tax (annual) |
|---|---|---|---|
| 0 – 300,000 | 300,000 | 7% | 21,000 |
| 300,001 – 600,000 | 300,000 | 11% | 33,000 |
| 600,001 – 1,100,000 | 500,000 | 15% | 75,000 |
| 1,100,001 – 1,600,000 | 500,000 | 19% | 95,000 |
| 1,600,001 – 3,200,000 | 1,600,000 | 21% | 336,000 |
| 3,200,001 – 4,232,800 | 1,032,800 | 24% | 247,872 |
| Annual PAYE | 807,872 | ||
| Monthly PAYE | 807,872 / 12 | 67,322.67 |
Minimum tax check: 1% × 500,000 = 5,000 → not binding (computed PAYE is higher).
Net pay table
| Item | NGN |
|---|---|
| Gross | 500,000.00 |
| − Employee Pension | (32,000.00) |
| − NHF | (6,250.00) |
| − PAYE | (67,322.67) |
| Net pay | 394,427.33 |
Employer cost ledger table
| Item | NGN |
|---|---|
| Gross emolument | 500,000.00 |
| Employer Pension (10% × BHT) | 40,000.00 |
| NSITF (1% × Gross) | 5,000.00 |
| ITF accrual (1% × Gross) | 5,000.00 |
| Total employer cost | 550,000.00 |
Remittances arising from this payslip table
| Recipient | Amount NGN | Deadline |
|---|---|---|
| LIRS (PAYE) | 67,322.67 | 10 Jun 2025 |
| PFC → PFA (Pension total) | 72,000.00 | within 7 working days of pay date |
| FMBN (NHF) | 6,250.00 | within 1 month |
| NSITF | 5,000.00 | last day of following month |
| ITF | 5,000.00 (accrued; paid annually by 1 Apr 2026) | annual |
Conservative defaults table
| Situation | Conservative position |
|---|---|
| Pension status unclear (RSA exists?) | Assume RSA exists and deduct 8% / pay employer 10% — flag for HR; under-remittance triggers 2%/month penalty |
| NHF applicability unclear | If Nigerian citizen and basic ≥ NGN 3,000, deduct 2.5% — flag for reviewer if foreign national |
| BIK valuation uncertain | Use higher of cost-to-employer or open-market value — flag |
| Bonus / 13th-month timing | Spread evenly across the 12 months of the period it relates to for PAYE smoothing; flag if employer prefers month-paid taxation (allowed but produces a higher PAYE spike that month) |
| Multi-state employee (works across states) | Use the state where employee is principally resident per PITA §2(2); flag for reviewer |
| Mid-month joiner / leaver | Pro-rate gross emolument, pro-rate CRA on annualized basis, full statutory deductions on actual paid amounts |
| Employee TIN missing | Compute PAYE normally but flag immediately — SIRS reconciliation will reject schedule without TIN |
| Salary advance / loan recovery | Show as voluntary deduction below the line; does NOT reduce PAYE base |
| Pay in foreign currency | Convert to NGN at CBN official rate on pay date; document the rate used |
| Late hire — backdated salary | Apply current-month PAYE on full amount paid; do NOT spread retroactively without reviewer sign-off |
Sources table
| Source | Reference |
|---|---|
| Personal Income Tax Act (PITA) Cap P8 LFN 2004, as amended by Finance Acts 2019–2023 | Federal Inland Revenue Service |
| Pension Reform Act 2014 (PRA 2014) | National Pension Commission (PenCom) |
| National Housing Fund Act, Cap N45 LFN 2004 | Federal Mortgage Bank of Nigeria (FMBN) |
| Employees Compensation Act 2010 (NSITF) | Nigeria Social Insurance Trust Fund |
| Industrial Training Fund Act, Cap I9 LFN 2004 (as amended 2011) | Industrial Training Fund |
| National Health Insurance Authority Act 2022 | NHIA (formerly NHIS) |
| Nigeria Tax Administration Act 2025 (NTA 2025) | FIRS Tax Pro-Max unified module |
| Lagos State Internal Revenue Service e-tax portal | https://etax.lirs.net |
| FCT Internal Revenue Service portal | https://fctirs.gov.ng |
| FIRS Tax Pro-Max | https://taxpromax.firs.gov.ng |
| Companion skill — PAYE rules | ng-paye |
| Companion skill — Statutory deductions | ng-statutory-deductions |
| Companion skill — Income tax (self-employed) | ng-income-tax |
This is not tax advice. All outputs must be reviewed by a qualified Nigerian payroll professional or tax consultant before any payslip is issued or any remittance is made.
This skill is a tool, not an engagement. Every taxpayer's situation is different, and the rules in the skill may not match your specific facts.
To speak with one of the licensed accountants who verifies skills for your jurisdiction — no liability on either side until you and the accountant sign a formal engagement letter — book a free 30-minute call:
We'll route you to the named verifier covering your country or state. You can also see the full list of verified accountants at openaccountants.com/network.
Other Nigeria computations in the OpenAccountants Tax Library.
Within 7 working days of salary payment datePRA 2014
NHF remittance deadline
Within 1 month of deduction
NSITF monthly remittance deadline
on or before the 15th day of the succeeding monthEmployees' compensation Act (ECA) 2010
ITF annual return deadline
march 31st of every year
Form H1 (Annual Employer's Return) filing deadline
31 January of the following yearPITA
Form H1 coverage period
1 January – 31 December (preceding tax year)PITA
PAYE late remittance penalty — surcharge rate
10% of unremitted taxPITA §82
PAYE late remittance penalty — interest rate
CBN MPRnigerian tax act 2025
Pension late remittance penalty
≥2% per month of unremitted amountPRA 2014 §11(7)
NHF late remittance penalty — individual
NGN 5,000 or a one year prison term or both
NHF late remittance penalty — body corporate
NGN 50,000
NSITF late remittance penalty — surcharge rate
10% of contribution + applicable interest
Termination payment / gratuity exemption review threshold
gratuity are tax -excemptnigerian tax act 2025
Salary sacrifice into pension above statutory employee minimum — permitted maximum per PRA 2014
Above 8% statutory minimum permitted under PRA 2014 §11(7)PRA 2014 §11(7)
NTA 2025 FIRS Tax Pro-Max — Phase 1 commencement (federal MDAs)
tax pro max is no longer in use
NTA 2025 FIRS Tax Pro-Max — Phase 2 commencement (state IRS integration, expected)
tax pro max is no longer in use
Personal / children allowances — abolished
Abolished in 2020PITA (amended 2020)
Payroll component order table
| Step | Component | Effect on employee PAYE base | Paid by | |---|---|---|---| | 1 | **Gross monthly emolument** (basic + housing + transport + other taxable allowances + BIK) | Starting point | — | | 2 | − Employee Pension contribution (8% of BHT, see `ng-statutory-deductions`) | **Reduces** PAYE base | Employee | | 3 | − Employee NHF contribution (2.5% of basic, if applicable) | **Reduces** PAYE base | Employee | | 4 | − Employee NHIS contribution (if scheme operated; varies) | **Reduces** PAYE base | Employee | | 5 | = Gross income for CRA purposes | — | — | | 6 | − Consolidated Relief Allowance (CRA) — `max(NGN 200,000, 1% × gross) + 20% × gross` | **Reduces** PAYE base | — | | 7 | = Chargeable income | — | — | | 8 | Apply PITA Sixth Schedule progressive brackets (see `ng-paye`) | → PAYE liability | — | | 9 | = **PAYE for the month** | — | Employee (withheld) | | 10 | Net pay = Gross − Employee Pension − Employee NHF − Employee NHIS − PAYE − any voluntary deductions | — | — |
Employer-side costs (parallel, do NOT affect employee net)
| Component | Rate / amount | Notes | |---|---|---| | Employer Pension | 10% of BHT | Remitted to employee's PFA via PFC | | NSITF (ECS) | 1% of total payroll | Employer-only | | ITF | 1% of total payroll (employers with ≥ 5 staff OR turnover ≥ NGN 50m) | Annual return | | EDT (Tertiary Education Tax) | Not employer payroll cost — corporate tax on assessable profits | | NHIS employer share | If group scheme operated; varies |
Inputs required to run a payroll table
| Input | Source | Notes | |---|---|---| | TIN (Tax Identification Number) | Employee record / JTB | Required for PAYE filing; flag if missing | | State of tax residence | Employee record | Determines which SIRS receives PAYE (per PITA §2(2)) | | Gross monthly emolument breakdown | Contract / HR | Must split Basic / Housing / Transport / Other | | Pension scheme status | RSA + PFA details | Confirm employee has RSA opened | | NHF applicability | Salary ≥ NGN 3,000/month and Nigerian citizen | See `ng-statutory-deductions` | | NHIS scheme details | If operated by employer | Optional except for federal MDAs | | Marital / dependent status | Not relevant for CRA (Nigeria abolished personal/children allowances in 2020) | Retained only for HR records | | Benefits in Kind (BIK) for the month | HR / accounts payable | Must be quantified before PAYE |
Refusal catalogue table
| Scenario | Action | |---|---| | Cross-border employment (employee tax-resident outside Nigeria, employer in Nigeria) | Refer to a qualified Nigerian tax consultant — treaty analysis required | | Expatriates with split-pay arrangements (home-country + Nigeria) | Out of scope; refer to specialist | | Directors' fees not paid through payroll | Out of scope — covered by WHT under `ng-paye` | | Employee stock options / share-based payments | Out of scope — bespoke valuation and CGT interaction | | Salary sacrifice into pension above 8% statutory | Permitted under PRA 2014 §11(7) but flag for reviewer — quantum and PAYE-deductibility need confirmation | | Termination payments / gratuity > NGN 10m | Flag — exemption thresholds and tax treatment require legal review | | Backdated salary adjustments spanning > 1 tax year | Refer to specialist — re-opening of prior-year H1 may be required |
Gross monthly emolument formula
Basic salary B + Housing allowance H + Transport allowance T + Other taxable allowances O (utility, meal, leave, entertainment, etc.) + Cash bonus paid in month X + Benefits in Kind (BIK) K = Gross monthly emolument G = B + H + T + O + X + K
Note on BHT
Pension contributions are computed on **Basic + Housing + Transport** (BHT), not on G. See `ng-statutory-deductions` for the legislative basis (PRA 2014 §4(3)).PRA 2014 §4(3)
Statutory deductions reducing PAYE base table
| Deduction | Formula | Notes | |---|---|---| | Employee Pension | 8% × (B + H + T) | Per PRA 2014 | | Employee NHF | 2.5% × B | Only if Nigerian citizen AND monthly basic ≥ NGN 3,000 | | Employee NHIS | Per scheme rules (commonly 1.75% × B for federal MDAs) | Skip if no scheme |
CRA computation formula
Gross_for_CRA = G − D_pre CRA = max(NGN 200,000 annual / NGN 16,666.67 monthly, 1% × Gross_for_CRA) + 20% × Gross_for_CRA
Chargeable income formula
Chargeable_monthly = Gross_for_CRA − CRA_monthly
Annualization method
Annualize `Chargeable_monthly × 12`, apply the brackets from `ng-paye`, divide the result by 12 to get **monthly PAYE**. The annualized method avoids the regressive distortion that occurs when applying brackets directly to monthly income.
Minimum tax check
If the computed PAYE is less than **1% of gross income** (minimum tax under PITA §37, see `ng-paye`), substitute the minimum tax. Common for low earners; rare for the salary range typically processed via formal payroll.PITA §37
Net pay formula
Net pay = G − Employee Pension − Employee NHF − Employee NHIS − PAYE − Voluntary deductions (loan repayments, salary advance recoveries, union dues, etc.)
Employer-side accruals table
| Item | Posted to | |---|---| | Employer Pension 10% × BHT | DR Payroll expense, CR Pension payable | | NSITF 1% × total payroll | DR Payroll expense, CR NSITF payable | | ITF 1% × total payroll (qualifying employers) | DR Payroll expense, CR ITF payable (accrued monthly, paid annually) |
Monthly remittance calendar table
| Item | Recipient | Deadline | Channel | |---|---|---|---| | **PAYE** | Relevant State IRS (state of employee's tax residence) | **10th of the following month** | LIRS e-tax (Lagos); FCT-IRS portal (FCT); other state IRS portals or bank Pay-Direct | | **Employee + Employer Pension** | Pension Fund Custodian (PFC) for credit to employee's PFA | **Within 7 working days** of salary payment date | PFA transfer via PFC; PenCom RSA Multifund schedule | | **NHF** | Federal Mortgage Bank of Nigeria (FMBN) | **Within 1 month** of deduction | FMBN-designated commercial banks | | **NSITF (ECS)** | Nigeria Social Insurance Trust Fund | **Monthly, by the last day of the following month** | NSITF e-portal / designated banks | | **NHIS (if operated)** | NHIS / HMO | Per scheme rules — typically monthly | HMO direct | | **ITF (employer only)** | Industrial Training Fund | **Annual** — by 1 April of following year | ITF portal |
NTA 2025 unified payroll module rollout
The NTA 2025 unified payroll module under **FIRS Tax Pro-Max** is being rolled out in phases: - **Phase 1 (2025):** Federal MDAs migrate from IPPIS-only PAYE flows to Tax Pro-Max integration. Private-sector employers are NOT required to switch. - **Phase 2 (TBC, expected 2026):** State IRS integration via MoU. **Until the relevant state IRS publishes its onboarding notice, continue using the existing state portal (LIRS e-tax, etc.).** - **Conservative default:** Continue with current state IRS portals; track NTA 2025 commencement notices monthly.
Late-payment penalties table
| Item | Penalty | |---|---| | PAYE late remittance | 10% of unremitted tax + interest at CBN MPR + 5% (PITA §82) | | Pension late remittance | 2% per month of unremitted amount (PRA 2014 §11(7)) | | NHF late remittance | NGN 50,000 (individual) / NGN 100,000 (body corporate) + recovery | | NSITF late remittance | 10% of contribution + interest |
Form H1 filing requirement
Every employer must file **Form H1 (Annual Employer's Return of all emoluments paid to employees)** with the relevant State IRS by **31 January** of the following year, covering the preceding tax year (1 January – 31 December).
Form H1 field table
| Field | Content | |---|---| | Employer details | Name, TIN, address | | Schedule of employees | Name, TIN, RSA PIN, total gross emolument, total reliefs (CRA, pension, NHF, NHIS), chargeable income, total PAYE remitted by month | | Reconciliation | Sum of monthly PAYE remitted must equal computed annual PAYE per employee | | Variance | Any under-remittance is payable; over-remittance is offsetable against the next year (refund procedurally difficult) |
Reconciliation checklist table
| Check | Pass criterion | |---|---| | Sum of monthly Form A (PAYE schedule) = Form H1 total | ✓ | | Pension contributions remitted = 18% × annual BHT for each employee | ✓ | | NHF contributions remitted = 2.5% × annual basic for each qualifying employee | ✓ | | NSITF remitted = 1% × annual total payroll | ✓ | | ITF annual return filed (if applicable) | ✓ | | Any retroactive bonuses / 13th-month spread per `ng-paye` rules | ✓ | | BIK valuations consistent across months | ✓ |
Gross emolument breakdown table
| Component | NGN | |---|---| | Basic (50% of gross) | 250,000 | | Housing (20%) | 100,000 | | Transport (10%) | 50,000 | | Utility allowance | 50,000 | | Meal allowance | 50,000 | | **Gross monthly (G)** | **500,000** |
Statutory deductions reducing PAYE base table
| Item | Formula | NGN | |---|---|---| | Employee Pension | 8% × 400,000 | 32,000 | | NHF | 2.5% × 250,000 | 6,250 | | NHIS | n/a (no scheme) | 0 | | **D_pre total** | | **38,250** |
CRA computation worked example
Gross_for_CRA (monthly) = 500,000 − 38,250 = 461,750 Gross_for_CRA (annualized) = 5,541,000 CRA (annual) = max(200,000, 1% × 5,541,000) + 20% × 5,541,000 = max(200,000, 55,410) + 1,108,200 = 200,000 + 1,108,200 = 1,308,200 CRA (monthly) = 1,308,200 / 12 = 109,016.67
Chargeable income worked example
Chargeable_monthly = 461,750 − 109,016.67 = 352,733.33 Chargeable_annual = 4,232,800
PAYE bracket table
| Bracket | Slice | Rate | Tax (annual) | |---|---|---|---| | 0 – 300,000 | 300,000 | 7% | 21,000 | | 300,001 – 600,000 | 300,000 | 11% | 33,000 | | 600,001 – 1,100,000 | 500,000 | 15% | 75,000 | | 1,100,001 – 1,600,000 | 500,000 | 19% | 95,000 | | 1,600,001 – 3,200,000 | 1,600,000 | 21% | 336,000 | | 3,200,001 – 4,232,800 | 1,032,800 | 24% | 247,872 | | **Annual PAYE** | | | **807,872** | | **Monthly PAYE** | 807,872 / 12 | | **67,322.67** |
Net pay table
| Item | NGN | |---|---| | Gross | 500,000.00 | | − Employee Pension | (32,000.00) | | − NHF | (6,250.00) | | − PAYE | (67,322.67) | | **Net pay** | **394,427.33** |
Employer cost ledger table
| Item | NGN | |---|---| | Gross emolument | 500,000.00 | | Employer Pension (10% × BHT) | 40,000.00 | | NSITF (1% × Gross) | 5,000.00 | | ITF accrual (1% × Gross) | 5,000.00 | | **Total employer cost** | **550,000.00** |
Remittances arising from this payslip table
| Recipient | Amount NGN | Deadline | |---|---|---| | LIRS (PAYE) | 67,322.67 | 10 Jun 2025 | | PFC → PFA (Pension total) | 72,000.00 | within 7 working days of pay date | | FMBN (NHF) | 6,250.00 | within 1 month | | NSITF | 5,000.00 | last day of following month | | ITF | 5,000.00 (accrued; paid annually by 1 Apr 2026) | annual |
Conservative defaults table
| Situation | Conservative position | |---|---| | Pension status unclear (RSA exists?) | Assume RSA exists and deduct 8% / pay employer 10% — flag for HR; under-remittance triggers 2%/month penalty | | NHF applicability unclear | If Nigerian citizen and basic ≥ NGN 3,000, deduct 2.5% — flag for reviewer if foreign national | | BIK valuation uncertain | Use higher of cost-to-employer or open-market value — flag | | Bonus / 13th-month timing | **Spread evenly across the 12 months of the period it relates to** for PAYE smoothing; flag if employer prefers month-paid taxation (allowed but produces a higher PAYE spike that month) | | Multi-state employee (works across states) | Use the state where employee is **principally resident** per PITA §2(2); flag for reviewer | | Mid-month joiner / leaver | Pro-rate gross emolument, pro-rate CRA on annualized basis, full statutory deductions on actual paid amounts | | Employee TIN missing | Compute PAYE normally but **flag immediately** — SIRS reconciliation will reject schedule without TIN | | Salary advance / loan recovery | Show as voluntary deduction below the line; does NOT reduce PAYE base | | Pay in foreign currency | Convert to NGN at CBN official rate on pay date; document the rate used | | Late hire — backdated salary | Apply current-month PAYE on full amount paid; do NOT spread retroactively without reviewer sign-off |
Sources table
| Source | Reference | |---|---| | Personal Income Tax Act (PITA) Cap P8 LFN 2004, as amended by Finance Acts 2019–2023 | Federal Inland Revenue Service | | Pension Reform Act 2014 (PRA 2014) | National Pension Commission (PenCom) | | National Housing Fund Act, Cap N45 LFN 2004 | Federal Mortgage Bank of Nigeria (FMBN) | | Employees Compensation Act 2010 (NSITF) | Nigeria Social Insurance Trust Fund | | Industrial Training Fund Act, Cap I9 LFN 2004 (as amended 2011) | Industrial Training Fund | | National Health Insurance Authority Act 2022 | NHIA (formerly NHIS) | | Nigeria Tax Administration Act 2025 (NTA 2025) | FIRS Tax Pro-Max unified module | | Lagos State Internal Revenue Service e-tax portal | https://etax.lirs.net | | FCT Internal Revenue Service portal | https://fctirs.gov.ng | | FIRS Tax Pro-Max | https://taxpromax.firs.gov.ng | | Companion skill — PAYE rules | `ng-paye` | | Companion skill — Statutory deductions | `ng-statutory-deductions` | | Companion skill — Income tax (self-employed) | `ng-income-tax` |
Rendered from the canonical facts model · facts last reviewed Jun 21, 2026. General reference only — confirm with a qualified professional before acting.
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