AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Income tax on employees who live in Lagos is collected by the Lagos State Internal Revenue Service (LIRS). The Nigerian employer, usually your subsidiary or an employer of record, registers as a corporate taxpayer on the LIRS eTax portal (etax.lirs.net), files a PAYE schedule and pays each month by the 10th of the month after payday, and files the annual return of employees' emoluments by 31 January.
Why LIRS and not the federal service
Nigeria splits income tax collection. PwC's tax administration summary (last reviewed 29 May 2026) says the relevant state internal revenue service is empowered to collect tax on individuals' income, apart from some groups assessed federally. For staff who live in Lagos, that is LIRS. Your company's own corporate income tax, if it has any Nigerian liability, is a federal matter handled by the Nigeria Revenue Service (NRS), which replaced FIRS.
A Canadian company cannot register for PAYE in Lagos without a Nigerian employer to register. That is your Nigerian subsidiary, if you have one, or an employer of record that employs the staff for you; see what an EOR does.
Registering on eTax
LIRS runs its tax administration through eTax at etax.lirs.net. Deloitte's 2019 summary, published on Mondaq, describes it as a channel to register taxpayers, initiate payments, get treasury receipts, view assessments, submit monthly PAYE schedules and withholding tax schedules, and use a tax calculator. TechCabal's April 2026 guide describes separate login types for individuals and companies and says company Payer IDs carry a "C-" prefix.
- Register the employer. Create the corporate profile on eTax for the Nigerian company, with its registration details to hand. Keep the Payer ID it issues.
- Get each employee a Lagos tax ID. TechCabal's 2023 guide shows that individuals register on eTax with their BVN or NIN and date of birth, address and tax station, and receive a taxpayer ID with an "N" prefix by email.
- Set up payroll. Calculate PAYE under the 2026 bands each month; see Nigeria PAYE tax bands for 2026.
- File and pay monthly. Upload the PAYE schedule listing each employee, generate the payment and pay by the 10th.
- File the annual return of all employees' emoluments by 31 January for the previous year.
The step-by-step corporate registration screens change; we could not confirm them on an LIRS page during research, so follow the portal's own prompts and keep screenshots of each submission.
The dates that matter
| What | When | Source |
|---|---|---|
| Monthly PAYE remittance | On or before the 10th of the month after salaries are paid | PwC, May 2026 |
| Annual return of emoluments | By 31 January each year, for the previous year | PwC, May 2026 |
| Employee annual return | Filed jointly by employer and employee by 31 January | DLA Piper, Aug 2026 |
A worked example
Example only. A Toronto fintech's Lagos subsidiary pays two staff on 27 March 2026. PAYE for March must reach LIRS by 10 April 2026. When it pays a December 2026 bonus on 18 December, the PAYE on the bonus, which DLA Piper says is added to the PAYE base, is due by 10 January 2027, and the annual return covering all 2026 pay by 31 January 2027.
Mistakes that cost money
- Not deducting: DLA Piper lists a penalty of 40% of the tax not deducted.
- Deducting but not remitting: 10% plus interest at the CBN rate.
- Late filing: ₦100,000 for the first month.
- Wrong currency conversion: where pay is set in dollars, DLA Piper says it is converted at the CBN rate on payment and that figure is used for PAYE.
- Wrong state: remitting to LIRS for an employee who actually lives in Ogun State, or the reverse, leaves the tax unpaid where it was due. Record each employee's home address and update it when they move.
When staff join, move or leave
- New starter: add them to the next monthly schedule and confirm their LIRS tax ID before the first payday.
- Moving out of Lagos: from the month they become resident in another state, PAYE is due to the revenue service of the state where they now live, which usually means registering the employer there too.
- Leaving: deduct PAYE on final pay, including any gratuity, which DLA Piper says is taxable under the new bands, and include them in the next annual return.
- Salary changes: recalculate from the month of change; PAYE is not set once a year.
Tax clearance and your staff
Your staff will need their own tax clearance certificates for visas, loans and some contracts. KPMG's 2023 alert on the LIRS electronic TCC says the employer must have filed returns for the employee to get one. Late annual returns therefore hurt your staff directly, not just the company.
What to check first
- That the Nigerian employer is registered with CAC and has a Payer ID on eTax.
- Every employee's home state, and LIRS tax ID for those in Lagos.
- Pension remittances, which are separate and due within seven working days of salary payment.
- Who on your team, or at the EOR, logs in each month, and who checks the receipt.
Where Pryme fits
A Pryme Business Account can be opened from Canada and holds NGN, USD, GBP and EUR. Payroll pays staff in naira, and the Compliance agent can prepare the monthly PAYE checklist for a person to approve; actions are recorded. See also PAYE and pension for Nigerian staff.
Questions people ask
Who collects PAYE for staff living in Lagos?
The Lagos State Internal Revenue Service (LIRS), as the state internal revenue service for Lagos residents.
When is PAYE due to LIRS?
On or before the 10th of the month after salaries are paid, with the annual return of emoluments by 31 January (PwC, May 2026).
Can a Canadian company register with LIRS directly?
PAYE registration needs a Nigerian employer, such as a subsidiary or an employer of record.
What is the penalty for not remitting PAYE?
DLA Piper (August 2026) lists 10% of the amount plus interest at the CBN rate; failing to deduct is 40%.
Sources
- PwC Worldwide Tax Summaries: Nigeria, individual tax administration (last reviewed 29 May 2026) · accessed Oct 2026
- TechCabal: How to file tax on the LIRS eTax portal (2 Apr 2026) · accessed Oct 2026
- TechCabal: Registering to file tax returns with the LIRS eTax platform (22 Mar 2023) · accessed Oct 2026
- Mondaq (Deloitte): LIRS introduces the eTax administration system (10 Oct 2019) · accessed Oct 2026
- DLA Piper Africa: FAQs on payroll taxes and employer liability in Nigeria (28 Aug 2026) · accessed Oct 2026
- KPMG Nigeria Tax Alert: LIRS electronic tax clearance certificate (Apr 2023) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.