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
Keep payroll records for at least six years. The Labour Act requires records of wages and conditions of employment, kept for three years, but the Nigeria Tax Administration Act 2025 requires tax records to be kept for not less than six years after the year of assessment, so the longer period governs. Pension schedules and remittance proof should be kept on the same basis.
Three laws, three sets of records
| Law | What it requires | How long |
|---|---|---|
| Labour Act, s.75 | Records of wages and conditions showing the Act is complied with, plus a record for each worker | Three years after the time they refer to |
| Nigeria Tax Administration Act 2025, s.31 | Books and records sufficient to work out tax liability, in English | Not less than six years after the year of assessment |
| PenCom guidance (FAQ 2023; e-certificate guide 2026) | Contribution schedules and evidence of remittance to each PFA | Needed for compliance certificates and disputes; keep at least as long as tax records |
The Labour Act record for each worker
Section 75(1) requires every employer to keep records of wages and conditions of employment that show the Act is being complied with. Section 75(2) lists what must be recorded for each worker who has been given a written statement of terms under section 7:
- Name and address
- Town or other place of origin
- Date of birth
- Name and address of next of kin
- Date and place of engagement
- Nigeria Social Insurance Trust Fund number
- Date of cessation of employment
Section 75(3) says these records must be kept for three years after the time they refer to. Failing to keep them, or knowingly omitting records to avoid the Act, is an offence under section 75(4), with a fine of up to ₦200. The fine is small, but missing records make it much harder to defend a wage claim.
Tax records: the six-year rule
Section 31 of the Nigeria Tax Administration Act 2025 requires every person, whether or not liable to pay tax, to keep books or records with enough information to ascertain tax liability. They must be in English (or translated by a sworn translator on demand) and kept for not less than six years after the year of assessment to which the income relates. For payroll that means:
- Monthly payroll schedules showing gross pay, allowances, reliefs and PAYE per employee
- Proof of each PAYE remittance
- Monthly returns under section 28 and the annual return of emoluments under section 14
- Evidence for reliefs claimed, such as pension and rent relief declarations
- Records of benefits in kind and how they were valued
The six-year period lines up with the tax authority's power to raise additional assessments: section 36 lets the authority raise an additional assessment within six years of the assessment. Section 102 sets penalties for failing to keep books or to produce them on request: ₦10,000 for a person other than a company and ₦50,000 for a company.
Pension and NSITF records
PenCom's FAQ says employers must remit contributions within seven working days of paying salaries, and a late payment attracts a penalty of at least 2% paid into the employees' RSAs. You will need each month's schedule and bank evidence to prove compliance and to apply for the PenCom compliance certificate, whose renewal asks for past years' payment instruments. NSITF contribution receipts and schedules support the NSITF certificate of compliance; see NSITF registration.
A simple filing system
- One folder per year, with twelve monthly sub-folders.
- In each month: the approved payroll schedule, bank payment records, payslips, PAYE schedule and receipt, pension schedule and receipt, NSITF receipt.
- A separate staff file per employee: contract or written statement, ID, Tax ID, RSA PIN, NSITF number, changes to terms, leave and exit documents.
- A year-end folder: annual return of emoluments and acknowledgement.
- Store copies off-site or in the cloud, and set a destroy date at least six years after the year of assessment.
Worked example: when can 2026 records be destroyed?
Example only. Salaries paid in 2026 relate to the 2026 year of assessment. Six years after that year ends takes you to the end of 2032, so the earliest safe destroy date is in 2033, and later if a tax audit, objection or court case about that year is open.
Records employees are entitled to see
Some records are not only for the authorities. Section 7 of the Labour Act requires a written statement of terms within three months, and section 7(2) requires written notice of any change within one month; the employer must keep a copy or make sure the worker can read it. Payslips showing gross pay, each deduction and net pay let staff check that deductions stay within the one-third limit in section 5(7). Giving each employee a copy of their own records, and keeping your copy, settles most disputes about pay before they start.
Personal data in staff files, such as dates of birth and next-of-kin details, should be stored securely and shared only with people who need it.
Where Pryme fits
When payroll runs through a Pryme Business Account, schedules, payments and receipts sit together, and you can generate a VerifyDoc.ai verifiable statement or receipt when a staff member, auditor or lender needs proof that cannot be altered; see verifiable receipts. The Compliance agent can keep track of record dates for your review.
Questions people ask
How long should payroll records be kept in Nigeria?
At least six years after the year of assessment under section 31 of the Nigeria Tax Administration Act 2025. The Labour Act minimum is three years, so the tax rule governs.
What records must an employer keep under the Labour Act?
Records of wages and conditions, and for each worker: name, address, place of origin, date of birth, next of kin, date and place of engagement, NSITF number and date of leaving.
What is the penalty for not keeping tax records in Nigeria?
Section 102 of the NTAA: ₦10,000 for an individual and ₦50,000 for a company.
Can payroll records be kept electronically?
The NTAA requires records to be in English and consistent with any format the tax authority prescribes; electronic records are common, but keep them complete and retrievable.
Sources
- Labour Act, Cap L1 LFN 2004 (PLAC Laws of Nigeria) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (Act No. 5), ss.14, 28, 31, 51, 65, 101-107 · accessed Oct 2026
- PenCom: Frequently Asked Questions (2023 edition) · accessed Oct 2026
- PenCom: Step by Step Guide on Pension Clearance E-Certificate (Mar 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.