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
First decide whether each person is a contractor or an employee, because that sets your duties. If you employ in Nigeria, PAYE goes to the state where the employee lives, pension is at least 10% from you and 8% from the employee, remitted within seven working days of salary, plus NHF and group life cover. Contractors are paid on invoice, with no payroll deductions.
Australian founders with roots in Nigeria often hire there first: a developer in Lagos, a customer support lead in Abuja, an accountant in Port Harcourt. The talent is good and the cost is lower. The hard part is not finding people; it is paying them correctly every month across two tax systems, two currencies and two sets of records. This guide sets out the Nigerian side in order and a routine that works from Australia. It is information, not tax or legal advice.
Step one: contractor or employee
Everything else follows from this. A contractor runs their own business, invoices you and handles their own tax. An employee works under your control and you carry payroll duties. Nigerian courts look at the substance, not the label: control, integration into your business, economic reality, mutuality of obligation and exclusivity, with no single test deciding it, as Adeola Oyinlade & Co sets out. Our companion guide on contractors or employees in Nigeria covers the classification risk in detail.
If you engage contractors
- Use a written contract that describes deliverables, not hours and supervision.
- Pay against an invoice each month, in the currency agreed.
- Keep the invoice, proof of payment and the exchange rate used; the ATO expects records for most items to be kept for five years.
- Do not run Nigerian PAYE or pension for them; that would undermine the contractor arrangement.
If you employ: the Nigerian payroll duties
PAYE
Under the Nigeria Tax Act 2025, in force from 1 January 2026, PAYE is due to the state where the employee has their place or principal place of residence on 1 January of the tax year, or on the date they started if they join mid-year, according to Streamsowers & Köhn. The bands, per DLA Piper Africa (August 2026), are 0% on the first ₦800,000, 15% on the next ₦2.2m, 18% on the next ₦9m, 21% on the next ₦13m, 23% on the next ₦25m and 25% above ₦50m. Pay set in a foreign currency is converted at the CBN official rate at the time it is paid. DLA Piper also notes a 40% penalty for failing to deduct and 10% plus interest for failing to remit.
Pension, NHF and group life
PenCom's FAQ sets the minimum pension contribution at 18% of monthly emoluments: 10% from the employer and 8% from the employee, though the employer may bear all of it. The scheme covers private organisations with three or more staff. Contributions go to each employee's Retirement Savings Account with the PFA they choose, within seven working days of paying salary, and late remittance attracts a penalty of at least 2%. Employers must also keep group life insurance of at least three times each employee's annual total emolument, according to PenCom. The National Housing Fund deduction is 2.5% of basic monthly salary, per LawCare Nigeria's summary of the NHF Act.
Our guide to PAYE and pension for staff hired from Australia goes deeper into registration and filings.
How you employ: the entity question
To register for PAYE and obtain a PenCom employer code, Nigerian authorities expect an employer with Nigerian registration documents; PenCom's FAQ lists a certificate of incorporation or registration and tax ID evidence for the employer code. An Australian company with no Nigerian entity therefore usually chooses between three routes: set up a Nigerian subsidiary, use an employer of record that employs the staff in Nigeria for you (see hiring through an employer of record), or engage people as genuine contractors.
There is a tax angle too. PwC notes that a foreign company is not treated as having a taxable presence in Nigeria solely because it employs people resident there, where they do not primarily serve customers in Nigeria. Staff who sell to or serve Nigerian customers change that picture.
Worked example: one employee, one month
Example only, ignoring rent relief, NHF and other reliefs. A Lagos-based employee earns ₦6,000,000 a year, all treated as pensionable emoluments for simplicity.
| Item | Annual | Monthly |
|---|---|---|
| Gross pay | ₦6,000,000 | ₦500,000 |
| Employee pension (8%) | ₦480,000 | ₦40,000 |
| Taxable after pension | ₦5,520,000 | |
| PAYE: 0% on ₦800,000, 15% on ₦2,200,000, 18% on ₦2,520,000 | ₦783,600 | ₦65,300 |
| Employer pension (10%), on top of gross | ₦600,000 | ₦50,000 |
| Net pay to employee | ₦4,736,400 | ₦394,700 |
Check: ₦330,000 (15% of ₦2.2m) plus ₦453,600 (18% of ₦2.52m) is ₦783,600. Your monthly cash out is ₦394,700 net pay, ₦65,300 PAYE to Lagos State and ₦90,000 to the PFA, before NHF and insurance.
A monthly routine from Australia
- Fix pay day. The Labour Act requires wages to be paid at intervals of no more than a month.
- Convert AUD to naira a few days before, so delays do not push salary late.
- Pay net salaries, then PAYE to the right state, then pension within seven working days.
- Issue payslips and keep them with the exchange records for both the ATO and Nigerian audits.
- Reconcile the naira account against the payroll schedule before month end.
Our Nigeria library has a fuller employer's guide to payroll in Nigeria.
Where Pryme fits
A Pryme Business Account holds AUD and naira together, and payroll and bulk payouts let you pay a team in one run. The Finance agent can prepare the run and a person approves it above a set ceiling, with every action recorded. The app shows the rate and the fee before you approve.
Questions people ask
Can an Australian company employ someone in Nigeria directly?
Registering for PAYE and pension in Nigeria normally requires Nigerian registration documents, so most foreign companies use a Nigerian subsidiary, an employer of record, or genuine contractor arrangements.
Which state gets PAYE for a remote employee in Nigeria?
The state where the employee has their place or principal place of residence on 1 January of the tax year, or when they started if they joined mid-year, under the Nigeria Tax Act 2025.
How much pension must I pay for Nigerian staff?
At least 10% of monthly emoluments from the employer and 8% from the employee, remitted to the employee's RSA within seven working days of paying salary, per PenCom.
Do I deduct PAYE from Nigerian contractors?
No. PAYE applies to employees. Contractors invoice you and handle their own tax, though withholding tax rules may apply to some payments; check with a Nigerian adviser.
Sources
- Mondaq (Streamsowers & Köhn): Taxation of employment income under the Nigerian tax reform Acts (11 Mar 2026) · accessed Oct 2026
- DLA Piper Africa: FAQs on payroll taxes and employer liability in Nigeria (28 Aug 2026) · accessed Oct 2026
- PenCom: Frequently Asked Questions, 2023 edition · accessed Oct 2026
- LawCare Nigeria: Overview of the National Housing Fund scheme (17 Oct 2024) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate residence (reviewed 29 May 2026) · accessed Oct 2026
- Adeola Oyinlade & Co: Employee or contractor classification in Nigeria (18 Jun 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.