E-SERVICE · EMPLOYERS

PAYE remittance

Every employer in the State is an unpaid tax collector by law: deduct tax from each employee’s pay, file a schedule showing who it was deducted from, and remit by the tenth of the following month. Fail on any of the three and the liability becomes the employer’s own.

The employer’s three obligations

Section 81 of the Personal Income Tax Act and the Operation of PAYE Regulations impose three distinct duties on an employer, and it is worth separating them because employers routinely discharge one and forget another. The first is to deduct: tax must be computed on each employee’s emoluments using the graduated bands after the Consolidated Relief Allowance and statutory deductions, and withheld at the point of payment. The second is to remit: the money deducted must reach the Service by the tenth day of the following month. The third is to file a schedule: a list showing every employee, their TIN, gross pay, reliefs, taxable pay and tax deducted.

Remitting without a schedule is the most common failure, and the most damaging to employees. Money that arrives without a schedule cannot be credited to anybody, which is why a diligent employee who has had tax deducted for years can nonetheless be refused a tax clearance certificate. The Service will not credit an employee from a bulk payment; the schedule is what makes the credit possible.

Employers must also register with the Service before the first payment of emoluments, obtain an employer identification, file the annual return on Form H1 by 31 January covering the preceding year, and issue each employee a tax deduction card showing the year’s deductions. New employees are added and leavers removed on the monthly schedule.

The employer calendar

Obligation	Frequency	Due date	Filed on	Penalty for default
Employer registration	Once	Before the first payment of emoluments	Employer portal	₦50,000 and best-of-judgement assessment
Monthly PAYE schedule and remittance	Monthly	10th of the following month	Employer portal — upload or manual entry	10% of the amount plus interest at MPR + 5%
Annual employer return (Form H1)	Annually	31 January	Employer portal	₦500,000 corporate / ₦50,000 individual
Issue of tax deduction cards to employees	Annually	31 January	Generated from the portal	Employee complaint and audit finding
Notification of new employees and leavers	Monthly	With the monthly schedule	Employer portal	Assessment on unreported employees
Withholding tax on contractors	Per payment	Within 30 days of payment	Employer portal	10% of the amount plus interest

Filing a monthly schedule

Prepare the schedule

Download the standard template from Resources, or export it from your payroll system. One row per employee: TIN, name, gross emoluments, pension, NHF, other reliefs, taxable pay and tax deducted.

Upload it to the employer portal

The file is validated on upload. Rows with a missing or unmatched TIN are flagged before submission rather than after, so nothing lands unallocated.

Review the computed totals

The portal recomputes the tax on each row using the statutory bands and shows any row where your figure and the computed figure differ by more than ₦1.

Submit and generate the payment reference

On submission a single payment reference is generated for the whole schedule, quoting revenue head 11010001.

Pay by the 10th

By transfer, at a bank branch, through Remita or by direct debit for employers on a standing mandate. Large employers commonly use a dedicated virtual account.

Distribute the receipts

The electronic receipt covers the schedule; each employee’s credit is posted to their own tax account and appears on their tax deduction card.

What a compliant schedule contains

Employer name, TIN and employer identification number.
The month and year the schedule relates to.
One row per employee, including those who paid no tax in the month.
Each employee’s Taxpayer Identification Number — not a staff number.
Gross emoluments: basic, housing, transport, allowances, bonuses and benefits in kind.
Pension contribution at 8% of basic, housing and transport.
National Housing Fund contribution at 2.5% of basic.
The Consolidated Relief Allowance applied to each employee.
Taxable pay and tax deducted for the month.
Joiners and leavers marked, with dates.

What failure costs an employer

Failure to deduct, or deducting and failing to remit, makes the employer personally liable for the tax under section 82 of the Personal Income Tax Act, plus a penalty of ten per cent of the amount and interest at the Central Bank monetary policy rate plus five per cent from the due date.

Failure to file the annual return on Form H1 by 31 January attracts ₦500,000 for a corporate employer and ₦50,000 for an individual employer.

Persistent default triggers an employer audit covering up to six years, and the Service may serve a garnishee order on the employer’s bankers to recover an established liability.

Employer questions

Which State do I remit to for staff working across several States?

To the State in which each employee is resident, not where the office is. An employer with staff resident in three States files three schedules. Where an employee spends time in several States, residence is determined by the place of abode available to them.

Are casual and contract staff on the PAYE schedule?

If the relationship is one of employment — set hours, supervision, an entitlement to be paid for time rather than for a result — the person is an employee and belongs on the schedule regardless of what the contract is called. Genuine independent contractors are dealt with through withholding tax instead.

Are benefits in kind taxable?

Yes. Accommodation, a vehicle assigned for private use, domestic staff, utilities paid on the employee’s behalf and similar benefits are valued under the Sixth Schedule to the Personal Income Tax Act and added to emoluments.

What if an employee has no TIN?

Register them. The portal lets an employer initiate registration in bulk from the schedule for employees who have a NIN. Until a TIN exists, that employee’s deduction cannot be credited to them.

We remitted to the wrong State. Can it be transferred?

Not directly between States. Apply to the receiving State for a refund or a set-off and remit correctly here. Keep the evidence: the Service will hold enforcement on the disputed months while a documented inter-State reconciliation is in progress.

Do we deduct the development levy too?

Most employers do, as a matter of convenience: ₦500 per employee per year, remitted alongside the January or February schedule against revenue head 12060001.

File your schedule

Upload, validate, pay and distribute credits in one pass. Employers with fewer than ten staff can enter the schedule by hand.

Employer sign in Download the schedule template