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The short answer
PAYE deducted from salaries is expected by state revenue services on or before the 10th day of the month after the salaries were paid, the long-standing rule that PwC's Nigeria tax summary still gives (reviewed May 2026). Section 107 of the Nigeria Tax Administration Act 2025 makes tax deducted but not remitted by the 21st of the following month liable to the tax itself, a 10% a year penalty and interest at the CBN monetary policy rate. Paying by the 10th meets both.
Two dates you will see
Employers often hear two different dates for PAYE, and both come from real sources.
| Date | Where it comes from | What it means |
|---|---|---|
| 10th of the following month | The PAYE practice applied by state revenue services; PwC Worldwide Tax Summaries, reviewed 29 May 2026 | The date by which PAYE is expected to be remitted |
| 21st of the following month | Section 107(1), Nigeria Tax Administration Act 2025 | After this date, failure-to-remit penalties and interest apply |
The Nigeria Tax Administration Act 2025 (NTAA) sets the penalty clock at the 21st day of the month immediately after the month the tax was deducted. Section 146(c) keeps earlier regulations and guidelines in force to the extent they are consistent with the new Act, and section 28 says anyone who deducts tax must render monthly returns as specified in regulations. Your state revenue service may therefore still state the 10th in its own guidance. Remitting by the 10th is the safe course until your state confirms otherwise.
What the penalty looks like
Under section 107(1), a person who deducts tax and fails to remit it by the 21st of the following month is liable to pay:
- the amount deducted but not remitted;
- an administrative penalty of 10% per annum of that amount; and
- interest at the prevailing CBN monetary policy rate.
Section 107(3) adds that on conviction a person can face up to three years' imprisonment, a fine of not less than the principal plus a penalty of up to 50%, or both. Failing to deduct at all is a separate offence: section 105 sets a penalty of 40% of the amount not deducted.
Worked example
Example only. A Lagos employer deducts ₦100,000 PAYE from June salaries and remits it three months late.
| Item | Calculation | Amount |
|---|---|---|
| Tax deducted, not remitted | ₦100,000 | |
| Penalty at 10% a year for 3 months | ₦100,000 x 10% x 3/12 | ₦2,500 |
| Interest at the CBN MPR | MPR x ₦100,000 x 3/12 | Depends on the MPR at the time |
The monetary policy rate changes, so check the current figure on the CBN website. Interest at that rate is usually larger than the 10% penalty itself.
How to remit PAYE online
PAYE on employees goes to the internal revenue service of the state where each employee is resident. The steps are similar across states:
- Register the business with the state revenue service as an employer and obtain your payer identification; see registering as an employer for PAYE.
- Prepare the month's PAYE schedule: each employee's name, Tax ID, gross pay, reliefs and tax deducted.
- Log in to the state's e-tax or e-payment portal, upload or enter the schedule, and generate a payment reference or assessment.
- Pay through the channels the portal lists, often bank transfer, card or bank branch, quoting the reference.
- Download the receipt and keep it with the schedule. You will need both for the annual return and for a tax clearance certificate.
If staff live in different states, you file and pay separately to each state for the staff resident there.
Practical tips
- Set the pay date early enough in the month that PAYE can be worked out and paid before the 10th.
- Do not hold deducted PAYE in the operating account as working capital; it is the employee's tax, held in trust.
- If you cannot pay on time, contact the state revenue service before the deadline. Section 66 lets a tax authority remit penalties for good cause, but it is at its discretion.
- Match each month's remittance to the payroll so the annual return by 31 January reconciles; see filing the annual PAYE return.
Which month does the deadline count from?
The deadline runs from the month in which the tax was deducted, which is the month salaries were paid. If September salaries are paid on 28 September, the PAYE deducted is expected by 10 October, and section 107 penalties start if it is still unpaid after 21 October. If September salaries are paid late, on 3 October, the deduction happens in October, but paying staff late creates its own problems under the Labour Act, which makes wages due at the end of each agreed period.
Arrears and bonuses
Tax on a bonus, arrears or a 13th-month payment is deducted when it is paid, and follows the same monthly deadline. Section 51(7) of the NTAA requires the year's deductions to add up to each employee's tax for the year, so a large December payment may need a larger December deduction to catch up.
Keep the PAYE schedule for each month even when the total is nil, for example where all staff earn the minimum wage or less. A nil return shows the authority that the employer is active and compliant; see PAYE on minimum-wage salaries.
Where Pryme fits
When salaries run from a Pryme Business Account, the Finance agent can prepare the PAYE schedule from the payroll and remind you before the 10th, and a person approves the payment above the ceiling you set; see Finance agent. For all statutory dates in one place, read payroll filing deadlines.
Questions people ask
When is PAYE remittance due in Nigeria?
State revenue services expect it by the 10th of the month after salaries are paid. Under section 107 of the NTAA 2025, penalties apply if it is not remitted by the 21st.
What is the penalty for late PAYE remittance in Nigeria?
The unremitted tax, a 10% per annum penalty and interest at the CBN monetary policy rate, under section 107 of the Nigeria Tax Administration Act 2025.
How do I pay PAYE online in Nigeria?
Through the e-tax or payment portal of the state revenue service where your employees live: upload the schedule, generate a reference, pay and keep the receipt.
Is PAYE paid to NRS (formerly FIRS) or the state?
PAYE on most employees is paid to the internal revenue service of the employee's state of residence, not to the Nigeria Revenue Service, which replaced FIRS.
Sources
- Nigeria Tax Administration Act 2025 (Act No. 5), ss.14, 28, 31, 51, 65, 101-107 · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, Individual, Tax administration (reviewed 29 May 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.