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
If you are a US tax resident, the IRS taxes your worldwide income, so pay from a Nigerian company is reportable in the US whether it is salary or contract fees. Nigeria generally taxes a non-resident only on Nigerian-source income, and the NiDCOM-hosted diaspora tax guide says income for services physically rendered outside Nigeria is not taxable there unless you are a Nigerian tax resident. Whether you are an employee or a contractor decides how the US tax is collected.
Two questions decide everything
Working from Houston or Baltimore for a company in Lagos raises two separate questions that people often blur. The first is where you are taxed: the US, Nigeria, or both. The second is what kind of worker you are: an employee on the company's payroll, or an independent contractor sending invoices. The answers drive whether tax is withheld for you, whether you pay self-employment tax, and whether Nigerian PAYE should be coming out of your pay at all.
Where you are taxed
The US side
A green card holder, or someone who meets the substantial presence test, is a US resident for tax purposes. The IRS says the worldwide income of resident aliens is subject to US tax and must be reported. That covers a naira salary paid into a Nigerian account just as much as dollars paid into a US one. The US and Nigeria have no income tax treaty: the IRS list of treaty countries, reviewed in January 2026, does not include Nigeria, so neither country's rules are reduced by an agreement.
The Nigerian side
Under the Nigeria Tax Act 2025, as summarised by PwC (reviewed May 2026), you are Nigerian tax resident if any one of several tests is met: domicile, a permanent home available for your use, habitual abode, 183 days or more in any 12-month period, or "substantial economic or immediate family ties". If none applies, you are non-resident and Nigeria taxes only income from Nigerian sources. The NGEX diaspora guide hosted by NiDCOM (January 2026) puts the remote-work point plainly: income for services physically rendered outside Nigeria is not taxable in Nigeria unless you are tax resident there.
The family-ties test is the one to read carefully. A spouse and children living in the family house in Lekki while you work in the US could, on the wording PwC reports, be argued to create residence. This is information, not advice: if your household is still in Nigeria, get a written view from a Nigerian tax practitioner before assuming you are out of scope.
Employee or contractor
Nigerian firms sometimes call a remote hire "staff" while paying them like a vendor, or the other way round. For US purposes the label in the offer letter does not settle it. The IRS says classification depends on the whole relationship and groups the evidence into three areas.
| IRS category | What it looks at | Remote-work example |
|---|---|---|
| Behavioural control | Whether the company controls, or can control, what you do and how | Set hours on Lagos time, mandatory daily stand-ups, company laptop and tools |
| Financial control | How you are paid, whether expenses are reimbursed, who supplies tools | Fixed monthly pay versus per-project invoices; your own software subscriptions |
| Type of relationship | Written contracts, employee-type benefits, permanence, whether the work is core to the business | HMO cover, leave days and pension versus a fixed-term statement of work |
Either you or the company can ask the IRS for a ruling on Form SS-8. The IRS warns it may take at least six months to receive a determination, so most people work from the factors and their contract.
How the US tax is collected in each case
If you are a contractor
You report the fees on Schedule C and pay self-employment tax on net earnings of $400 or more. The IRS puts that tax at 15.3%: 12.4% for Social Security and 2.9% for Medicare, with half deductible when working out adjusted gross income. Nobody withholds US tax for you, so you make quarterly estimated payments; our guide to quarterly estimated taxes sets out the 2026 dates.
A Nigerian company paying a non-resident individual for professional or consultancy services may deduct withholding tax. PwC's Nigeria table (reviewed May 2026) shows 10% for non-resident individuals on commission, consultancy, technical, management and professional fees. How to treat that deduction on your US return is covered in Nigerian withholding tax on fees.
If you are an employee
A Nigerian employer with no US presence usually runs only Nigerian payroll. It will not issue a W-2 or withhold US income tax, so you still report the salary on your Form 1040 and will normally need estimated payments to avoid an underpayment penalty. Whether US Social Security and Medicare are owed on wages from a foreign employer for work done in the US is a technical question; confirm it with a US tax professional rather than assuming either way.
When Nigerian PAYE comes off your pay
Many Lagos firms put every hire through PAYE by default. If you are non-resident and the work is done in the US, the NGEX guide's position is that the income is not taxable in Nigeria, which means the deduction may not be owed at all. The practical steps:
- Tell HR in writing where you live and work, with dates.
- Ask payroll to review whether PAYE applies, citing the residence rules.
- If tax was deducted, keep the payslips and the state tax receipts.
- Ask a US preparer whether any of it can be credited. The IRS foreign tax credit covers foreign income taxes, but tax that was not legally due is generally a matter for a refund claim in Nigeria rather than a US credit.
Where Pryme fits
Some Nigerian employers can only pay into a naira account. A Pryme account opened from the US holds NGN and USD together, so salary can land in naira and you choose when to convert with Swap, which shows the rate and the fee before you approve. See multicurrency accounts and our guide to getting paid by a Nigerian employer.
Questions people ask
Do I pay tax in Nigeria if I work remotely from the US for a Nigerian company?
If you are not Nigerian tax resident, the NiDCOM-hosted NGEX guide says income for services physically rendered outside Nigeria is not taxable in Nigeria. Check the residence tests, including family ties, first.
Is my Nigerian salary taxable in the US?
Yes, if you are a US tax resident. The IRS taxes resident aliens on worldwide income, including naira pay.
Am I an employee or a contractor of my Lagos employer?
The IRS looks at behavioural control, financial control and the type of relationship. The job title alone does not decide it.
Is there a US-Nigeria tax treaty for remote workers?
No. Nigeria is not on the IRS list of US income tax treaty countries, reviewed January 2026.
Sources
- IRS: Taxation of resident aliens (reviewed 25 Jun 2026) · accessed Oct 2026
- IRS: United States income tax treaties, A to Z (reviewed 3 Jan 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, individual residence (reviewed 29 May 2026) · accessed Oct 2026
- NGEX Diaspora Guide to Nigeria's 2026 tax reforms (hosted by NiDCOM, Jan 2026) · accessed Oct 2026
- IRS: Independent contractor (self-employed) or employee? (reviewed 19 May 2026) · accessed Oct 2026
- IRS: Self-employment tax (Social Security and Medicare taxes) (reviewed 27 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.