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The short answer
A Nigerian employer deducts PAYE while your salary counts as Nigerian employment income, which turns mainly on whether you are still Nigerian tax-resident. Under the Nigeria Tax Act, as PwC summarises it, a permanent home or immediate family ties in Nigeria can keep you resident even when you work abroad, so many employers keep deducting. If you are fully non-resident and do all the work abroad, Nigerian tax on that salary may not apply, but the employer will usually want evidence before it stops.
Why employers keep deducting
PAYE is the employer's obligation, and getting it wrong is expensive for the employer, not you. DLA Piper's August 2026 FAQs on Nigerian payroll tax list a penalty of 40% for failing to deduct tax and 10% plus interest for failing to remit it. PwC's tax administration summary says PAYE is remitted by the 10th of the month after salaries are paid, with annual returns of emoluments by 31 January. Faced with those risks, a payroll team that is unsure whether you are still resident will keep deducting.
What decides it: residence and where the work is done
PwC's summary of the Nigeria Tax Act's residence rules, reviewed on 29 May 2026, treats you as resident if any one of the following applies:
- You are domiciled in Nigeria.
- You keep a permanent home available for domestic use in Nigeria, or a place of habitual abode.
- You spend at least 183 days in Nigeria in any 12-month period.
- You have substantial economic or immediate family ties in Nigeria.
You are non-resident only if none applies. PwC also summarises when employment income is Nigerian-derived: broadly where the employee is resident and the duties are performed wholly or partly in Nigeria. The NiDCOM-hosted diaspora tax guide says salary earned abroad while living abroad is exempt for non-residents and that services performed outside Nigeria are not taxable unless you are tax-resident.
| Your situation | Likely PAYE position (information only) |
|---|---|
| Moved abroad; family and home still in Nigeria | May remain resident; employer likely to keep deducting |
| Moved abroad with family; no Nigerian home; all work abroad | May be non-resident; employer may stop if satisfied |
| Abroad but working part of the year in Nigeria | Days and duties in Nigeria can bring the salary back into Nigerian tax |
| Converted to contractor invoicing from abroad | PAYE stops; withholding tax on invoices may apply instead |
How PAYE is worked out if it applies
The bands from 1 January 2026, as listed by PwC and DLA Piper, are 0% on the first ₦800,000 a year, then 15% on the next ₦2,200,000, 18% on the next ₦9,000,000, 21% on the next ₦13,000,000, 23% on the next ₦25,000,000 and 25% above ₦50,000,000. DLA Piper notes that pay in foreign currency is converted at the CBN official rate at the time it is paid. Pension and other reliefs reduce taxable pay; see Nigeria PAYE tax bands for 2026 for the full calculation.
Worked example (illustration only)
Ade earns ₦12,000,000 a year from a Lagos employer and, ignoring reliefs, would owe: 0% on ₦800,000 = ₦0; 15% on ₦2,200,000 = ₦330,000; 18% on the remaining ₦9,000,000 = ₦1,620,000. Total ₦1,950,000 a year, about ₦162,500 a month. If he is also resident in Canada, he reports the salary there, and the Canada-Nigeria agreement's tie-breaker (permanent home, then centre of vital interests) and Canada's foreign tax credit decide where tax finally falls.
Pension, NHF and other deductions
PAYE is not the only line on a Nigerian payslip. Pension contributions under the Pension Reform Act and National Housing Fund deductions are relieved from tax under the Nigeria Tax Act, as a Mondaq summary of the Act notes, and employers often keep them running alongside PAYE. If PAYE stops because you are non-resident, ask separately what happens to pension contributions; the answer depends on your employment contract and your pension fund administrator rather than on tax rules. See pension contributions for a remote worker abroad.
Short visits home
Days spent in Nigeria count towards the 183-day test, and work done during a visit is work performed in Nigeria. If you spend several weeks in Lagos each December and keep working, keep a simple log of days present and days worked. It answers the employer's question quickly and supports your position if either tax authority asks later.
If you think PAYE should stop
- Check each residence test carefully against your situation, including family and home.
- Get proof of residence from your new country's tax authority (for example a certificate of residence).
- Write to HR and payroll with your new address, the date you left Nigeria, and confirmation that all duties are performed abroad.
- Ask the employer whether its tax adviser needs anything else; it bears the penalty risk, so it decides.
- Keep payslips and tax deduction cards: if Nigerian PAYE continues, you will need them to claim relief abroad.
In your new country, the employer usually has no payroll duty if it has no presence there; HMRC's PAYE Manual says this for the UK, and you may report and pay tax yourself. See working remotely abroad for a Nigerian employer for the wider picture.
Where Pryme fits
A Pryme Personal account opened from abroad gives you a naira account for your salary and holds USD, GBP and EUR too, so you can convert with Swap when you choose, with the rate shown first. Verifiable statements help when a tax authority asks for proof of income received.
Questions people ask
Will my Nigerian employer stop PAYE when I relocate?
Only if it is satisfied that you are non-resident and all duties are done abroad. Many employers keep deducting while family or a home remains in Nigeria.
What makes me a Nigerian tax resident under the new law?
PwC's summary lists domicile, a permanent home, habitual abode, 183 days in 12 months, or substantial economic or immediate family ties. Any one is enough.
Can I be taxed in Nigeria and where I live?
Yes. A treaty, where there is one, decides residence, and foreign tax credits relieve double tax.
Is foreign-currency salary converted for PAYE?
DLA Piper says it is converted at the CBN official rate at the time it is paid.
Sources
- PwC Worldwide Tax Summaries: Nigeria, individual residence (reviewed 29 May 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, individual tax administration (reviewed 29 May 2026) · accessed Oct 2026
- DLA Piper Africa: FAQs on payroll taxes and employer liability in Nigeria (28 Aug 2026) · accessed Oct 2026
- NGEX Diaspora Guide to Nigeria's Tax Reforms 2026 (NiDCOM) · accessed Oct 2026
- Canada-Nigeria tax agreement (treaty text) · accessed Oct 2026
- HMRC PAYE Manual PAYE81610: employer presence · accessed Oct 2026
- Mondaq: Understanding personal income tax under the Nigeria Tax Act 2025 (5 Jan 2026) · 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.