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
Paying packers and loaders a rate per bag is lawful, but if they are your employees you still deduct and remit PAYE on what they earn above the tax-free band, keep wage records for three years, and pay at least monthly. The national minimum wage is ₦70,000 a month; commentators note the Act exempts establishments with fewer than 25 workers and piece-rate workers, so check whether it binds you, though paying below it makes staff hard to keep. Under the Nigeria Tax Act 2025 people earning the minimum wage or less are exempt from income tax.
How per-bag pay works in practice
In many sachet water factories, packers and loaders are paid per bag rather than a flat salary. It ties pay to output, which suits a business whose volume rises and falls with the weather. The risks are disputes over counts, pay that dips below what people can live on in a slow month, and payroll that nobody has checked against the law.
Write the rate down. Under section 7 of the Labour Act, an employer must give a worker a written statement of terms within three months of starting, including the rate of wages and how and when they are paid. For per-bag staff that means the rate per bag, how bags are counted, and the pay day.
Employees or casual helpers?
Some factories treat per-bag workers as casual helpers with no obligations attached. If the same people work your line most days, under your supervision and on your schedule, they look like employees, and the duties on written terms, wage records and PAYE follow. Treating them as employees from the start costs little extra administration and avoids arguments later, especially if a worker is injured or a dispute ends up before a labour officer. Our guide on contract and permanent staff explains the difference.
The minimum wage question
The National Minimum Wage (Amendment) Act 2024 set the minimum at ₦70,000 a month, signed on 29 July 2024. A Mondaq note by Pavestones (August 2024) lists exemptions, including establishments with fewer than 25 employees and part-time or commission and piece-rate workers, and says non-compliance can attract a fine of up to 5 per cent of the employer's monthly wage bill plus arrears. SCP Law's summary lists similar exemptions.
So whether the Act binds your factory depends on your headcount and how your staff are engaged. That is a legal point to confirm with a lawyer, not a reason to pay less. A packer who earns less than ₦70,000 in a month will leave for the factory that pays more, and staff turnover costs you training and broken sachets.
Worked example: a packer's month and PAYE
- Rate
- ₦15 per bag packed
- Output
- 300 bags a day for 26 days = 7,800 bags
- Monthly pay
- 7,800 × ₦15 = ₦117,000
- Annualised
- ₦117,000 × 12 = ₦1,404,000
- Tax-free band
- First ₦800,000 at 0%
- Taxed at 15%
- ₦1,404,000 − ₦800,000 = ₦604,000; 15% = ₦90,600 a year
- Monthly PAYE
- ₦90,600 ÷ 12 = ₦7,550
The bands used are those DLA Piper Africa summarised in August 2026 under the Nigeria Tax Act 2025: 0 per cent on the first ₦800,000, then 15 per cent on the next ₦2.2 million, rising in steps to 25 per cent above ₦50 million. A packer whose month is slow and whose income stays at or below the minimum wage is exempt from income tax under the Act. Because per-bag pay varies, work PAYE out each month on the actual pay and correct over the year; section 51(7) of the Nigeria Tax Administration Act expects the year's deductions to equal the year's tax. Our step-by-step PAYE guide covers reliefs.
Paying and remitting on time
- Pay at intervals of no more than a month (Labour Act section 15). Many factories pay weekly, which staff prefer.
- Remit PAYE to the state internal revenue service of the place your workers live. PwC's summary (May 2026) says by the 10th of the following month; the 2025 Act runs penalties after the 21st. Pay by the 10th to be safe and confirm with your state IRS.
- File the employer's annual return of emoluments by 31 January (Nigeria Tax Administration Act section 14).
- If you have three or more employees, the Pension Reform Act applies, according to PenCom's micro pension framework page.
Deductions and records
The Labour Act limits what you can take from wages. Fines are not allowed; a deduction for damage caused by wilful misconduct or neglect needs the prior written consent of a labour officer, and total deductions in a month cannot exceed one third of that month's wages (section 5). Advances are capped at one month's wages and recovered over at least three months without interest (section 4).
Section 75 requires wage records and a record for each worker to be kept for three years. For per-bag staff, keep the daily count sheet signed by the worker or supervisor, the monthly pay calculation, and proof of payment. Tax law asks for six years for anything that supports your tax position, so six years is the safer rule. See also pricing sachet water, where labour is one line in the cost per bag.
Where Pryme fits
Pryme Business Accounts include payroll and bulk payouts, so you can pay every packer by transfer from one approved list. The Finance agent prepares the run and a person approves it above the ceiling you set, with each action recorded.
Questions people ask
Is it legal to pay pure water factory workers per bag?
Yes. The Labour Act lets employer and worker agree the wage rate and method, but the terms must be given in writing within three months and wages paid at least monthly.
Does minimum wage apply to small pure water factories?
The Act sets ₦70,000 a month. Commentators list exemptions for establishments with fewer than 25 workers and for piece-rate workers, so check your position with a lawyer.
Do pure water factory workers pay tax?
Employees earning more than the minimum wage pay PAYE on income above the ₦800,000 tax-free band. Those earning the minimum wage or less are exempt under the Nigeria Tax Act 2025.
Can I deduct broken sachets from a packer's pay?
Fines are not allowed. A deduction for loss from wilful misconduct or neglect needs a labour officer's prior written consent, and total deductions cannot exceed a third of monthly wages.
Sources
- The National Minimum Wage (Amendment) Act 2024: key updates (Mondaq, Pavestones) · accessed Oct 2026
- FAQs on payroll taxes and employer liability (DLA Piper Africa) · accessed Oct 2026
- Labour Act Cap L1 LFN 2004 (PLAC) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria individual tax administration · accessed Oct 2026
- PenCom Framework for Micro Pension Plan · 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.