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The short answer
Nigerian PAYE is deducted by the Nigerian employer, which for an Irish company means its own Nigerian entity or an employer of record, and it is paid to the State Internal Revenue Service where the employee is taxed, not to Revenue in Ireland. PwC says PAYE is remitted by the 10th of the month after salaries are paid, with an annual return by 31 January. From 2026 the bands start with 0% on the first ₦800,000 a year and rise to 25% above ₦50 million.
Who runs PAYE when the company is Irish
PAYE in Nigeria is an employer's job: the employer works out the tax on each salary, deducts it and pays it over. An Irish company with no Nigerian entity is not set up to do this, which is why most Irish firms either form a Nigerian subsidiary or use an employer of record (EOR) that is already registered as a Nigerian employer. See employer of record for Nigerian staff.
If neither exists and the Irish company simply pays a person in Nigeria, that person is not on a Nigerian payroll. DLA Piper's August 2026 payroll guide notes that an employee living in Nigeria and earning income from foreign employers is required to register for tax. In other words, the tax does not disappear; it moves to the individual, and the arrangement may also raise questions about whether the person is really a contractor. See contractor or employee.
Which tax authority
Personal income tax on employees is collected by the states. PwC describes the collector as the "relevant State Internal Revenue" service. For staff living in Lagos that is the Lagos State Internal Revenue Service (LIRS), whose eTax portal uses Payer IDs with an N- prefix for individuals and C- for companies; Form H1 is the employer's annual return. The Nigeria Revenue Service (NRS, formerly FIRS) handles federal taxes such as company income tax, not your Lagos employees' PAYE.
The 2026 bands
The Nigeria Tax Act took effect on 1 January 2026. PwC's summary, reviewed on 29 May 2026, sets out these annual bands:
| Annual taxable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| Next ₦2,200,000 | 15% |
| Next ₦9,000,000 | 18% |
| Next ₦13,000,000 | 21% |
| Next ₦25,000,000 | 23% |
| Above ₦50,000,000 | 25% |
PwC adds that employees earning no more than the national minimum wage (₦70,000 a month) are not liable to tax or monthly PAYE deduction. DLA Piper notes that pension contributions are deducted from taxable income and that rent relief is 20% of rent paid, capped at ₦500,000. For a fuller walk-through of the bands, see Nigeria PAYE tax bands for 2026.
Worked example (simplified)
A Lagos-based analyst employed by your Nigerian subsidiary earns ₦7,000,000 a year. This example uses only pension and rent relief and ignores any other reliefs.
- Employee pension at 8%: ₦560,000. Income after pension: ₦6,440,000.
- Rent paid ₦2,000,000; relief at 20% is ₦400,000 (under the ₦500,000 cap). Taxable income: ₦6,040,000.
- First ₦800,000 at 0%: ₦0.
- Next ₦2,200,000 at 15%: ₦330,000.
- Remaining ₦3,040,000 at 18%: ₦547,200.
- Annual PAYE: ₦877,200, or ₦73,100 a month.
If the salary is agreed in euro, DLA Piper says it is converted to naira at the CBN rate at the time of payment for PAYE. A euro salary therefore produces a different naira tax figure each month as the rate moves.
Dates and penalties
- Monthly remittance: on or before the 10th of the month after salaries are paid (PwC, reviewed 29 May 2026).
- Annual return of all emoluments: by 31 January (PwC). LIRS made a one-off extension to 7 February for 2026 filings, as TechCabal reported.
- Failure to deduct: a 40% penalty; failure to remit: 10% plus interest at the CBN rate; late filing: ₦100,000 for the first month and ₦50,000 for each further month (DLA Piper, 28 Aug 2026).
- Bonuses and 13th-month pay are added to the PAYE base (DLA Piper).
What to check first
- Confirm who the Nigerian employer is: your subsidiary or an EOR. Without one, no one is running PAYE.
- Confirm the state each employee is taxed in. Staff in Lagos, Abuja and Port Harcourt deal with different state services.
- Register the employer with that state service and collect each employee's tax ID; TechCabal notes that a TIN can be checked on the JTB portal using a NIN.
- Agree a funding date from Ireland that lands before salary day, so the 10th-of-month remittance is never short.
- Keep the monthly remittance receipts and the annual return with your Irish payroll file.
The Irish side
Nigerian PAYE does not settle any Irish question. Revenue taxes Irish-resident companies on worldwide profits, and whether any Irish payroll obligation arises for staff working abroad is a question for your Irish adviser. Revenue's residence test for individuals uses 183 days in a tax year, or 280 days across two years. If a Nigerian employee spends long periods in Ireland, ask an Irish adviser whether Irish PAYE also applies. We have not confirmed whether an Ireland-Nigeria tax treaty is in force, so do not assume treaty relief.
Where Pryme fits
For a Nigerian subsidiary on a Pryme Business Account, the payroll tools and the Finance agent can prepare the monthly run and a list of the PAYE due by state. A person approves above a set ceiling, and actions are recorded. The Irish parent can fund it in naira after converting with Swap, seeing the rate and fee first. See also paying staff in Nigeria.
Questions people ask
Does an Irish company pay Nigerian PAYE to Revenue?
No. Nigerian PAYE goes to the State Internal Revenue Service where the employee is taxed, such as LIRS for Lagos. Revenue in Ireland deals with Irish taxes only.
What is the tax-free amount for PAYE in Nigeria in 2026?
PwC's summary of the Nigeria Tax Act shows the first ₦800,000 of annual taxable income taxed at 0%. Minimum-wage earners are not liable to PAYE.
When must PAYE be remitted in Nigeria?
On or before the 10th of the month after salaries are paid, according to PwC. The annual return of emoluments is due by 31 January.
Is PAYE calculated on a euro salary?
It is calculated in naira. DLA Piper says foreign-currency pay is converted at the CBN rate at the time of payment.
Sources
- PwC Worldwide Tax Summaries: Nigeria, taxes on personal income (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 (28 Aug 2026) · accessed Oct 2026
- TechCabal: How to file tax on the LIRS eTax portal (2 Apr 2026) · accessed Oct 2026
- Revenue: Resident for tax purposes (24 Nov 2025) · accessed Oct 2026
- Revenue: Corporation Tax (published 16 Oct 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.