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
An owner living in Italy still has to make sure the Nigerian employer deducts PAYE from every salary and remits it to the State Internal Revenue Service where each employee is resident. From 1 January 2026 the first ₦800,000 a year is taxed at 0%, rising in bands to 25% above ₦50 million; PwC says PAYE is due by the 10th of the following month.
Living in Italy does not move the PAYE duty out of Nigeria
If your business employs people in Nigeria, the duty to deduct and pay their income tax sits with the employer in Nigeria, wherever the owner happens to live. Section 51(6) of the Nigeria Tax Administration Act 2025 (NTAA) says an employer deducts income tax from any emolument it pays, and section 51(7) says the deductions over a year must equal the year's tax. Living in Milan, Turin or Rome changes how you run payroll, not whether you run it.
The key point for an owner abroad is who collects. Under section 3(2) of the NTAA, tax on resident individuals is administered by the State or FCT Internal Revenue Service, and section 87 places PAYE with the State IRS. In practice that means the state where each employee is resident, which may not be the state where your office is. A company with staff in Lagos and Ogun can end up dealing with two state revenue services.
Rates and reliefs from 1 January 2026
The Nigeria Tax Act 2025 took effect on 1 January 2026. PwC's tax summary (reviewed 29 May 2026) gives these annual bands for employment income:
| 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 also notes that employees earning the national minimum wage (₦70,000 a month) or less are not liable to tax or PAYE. DLA Piper's payroll FAQ (28 Aug 2026) adds points that matter to owners paying from abroad: where you pay staff in a foreign currency, the pay is converted to naira at the CBN rate at the time of payment to work out PAYE; bonuses and 13th-month pay are taxable; and rent relief is 20% of rent, capped at ₦500,000, and needs evidence such as a receipt or lease. Pension contributions under the Pension Reform Act are deducted before tax.
Worked example
Example only, before pension and rent relief. A Lagos-resident office manager earns ₦500,000 a month, or ₦6,000,000 a year.
- First ₦800,000 at 0%: ₦0
- Next ₦2,200,000 at 15%: ₦330,000
- Remaining ₦3,000,000 at 18%: ₦540,000
- Annual tax: ₦870,000, or ₦72,500 a month
Pension and any rent relief claimed would reduce the taxable figure, so the real deduction would be lower. The calculation is shown only to illustrate the bands.
Deadlines and penalties
There are two dates to diarise each month and one each year.
- Monthly remittance
- PwC (May 2026) says PAYE is paid by the 10th of the month after salaries are paid. The NTAA 2025 runs penalties from after the 21st. Pay by the 10th to be safe and confirm the date with the state IRS.
- Annual return
- Section 14(1) of the NTAA requires employer returns by 31 January for the previous year. DLA Piper notes the annual return of employees' income is filed jointly by employer and employee.
- Failure to deduct
- 40% penalty on the amount not deducted (DLA Piper).
- Failure to remit
- 10% plus interest at the CBN rate (DLA Piper).
- Late filing
- ₦100,000 for the first month (DLA Piper).
Running it from Italy: the practical set-up
Most owners abroad use one of three models. Each can work; the difference is who does the monthly mechanics.
- A Nigerian company runs payroll itself. Someone in Nigeria or an accountant prepares the schedule, pays net salaries and remits PAYE to the state IRS. You approve from Italy.
- An outsourced payroll bureau or accountant in Nigeria. They calculate, file and remit; you fund the account. You remain liable for errors, so ask for the state IRS receipts each month.
- An employer of record. A third party is the legal employer and runs PAYE. Useful when you have no Nigerian entity; you pay a service fee.
Whichever you choose, the owner's practical risks are the same: the employer's tax registration lapsing, schedules filed late because no one in Nigeria had the login, and state receipts not kept. Make sure the company's Tax ID is current (under the NTAA every taxable person must register and obtain one) and that more than one person can access the state portal. If you are still deciding how to set up, our guide on paying staff in Nigeria from an Italian company compares the options.
Your own tax position
PAYE on your staff is separate from your personal tax as an owner living in Italy. Dividends or salary you draw from the Nigerian company raise their own questions in both countries. Note that the Italy–Nigeria treaty in force covers only air and shipping income, according to the FIRS's 2022 treaty circular, so do not assume treaty relief. Take advice on that separately; this article is information, not advice.
Where Pryme fits
A Pryme Business Account includes payroll and bulk payouts for paying a Nigerian team in naira, and the Finance agent can prepare the monthly schedule for a person to approve above a set ceiling, with each action recorded. Funding from euro happens through Swap, with the rate and fee shown before you approve. Pension rules for the same staff are covered in pension and NHF contributions for Nigerian staff, and the bands themselves in Nigeria PAYE tax bands for 2026.
What to check first
- In which state is each employee resident, and is the company registered with that state IRS?
- Who in Nigeria can log in to file and pay each month?
- Are you converting any foreign-currency pay at the CBN rate on the payment date?
- Is the 31 January annual return in the calendar?
Questions people ask
I live in Italy. Do I still have to pay PAYE for my staff in Nigeria?
Yes. The employer in Nigeria must deduct income tax from emoluments under section 51(6) of the NTAA 2025 and remit it to the relevant state IRS, whatever the owner's country of residence.
Which state do I pay PAYE to?
PAYE is administered by the State IRS, generally the state where the employee is resident. Staff living in different states can mean dealing with more than one revenue service.
When is PAYE due in Nigeria?
PwC (May 2026) says by the 10th of the following month; the NTAA 2025 runs penalties after the 21st. Pay by the 10th and confirm with your state IRS.
I pay my Nigerian staff in euro. How is PAYE calculated?
DLA Piper (Aug 2026) says foreign-currency pay is converted to naira at the CBN rate at the time of payment and PAYE is worked out on that naira amount.
Sources
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- 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
- FIRS Information Circular 2022/15 on claiming tax treaty benefits (KPMG-hosted copy) · 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.