As we approach the statutory deadline of 31 January, employers are reminded of their obligation to file Annual Employer Pay-As-You-Earn (PAYE) Returns for the preceding calendar year.
This filing is a mandatory statutory return, required under Nigerian tax law, and applies to all employers with employees in Nigeria – regardless of size, sector, or PAYE outcome for the year.
Across the country, State Internal Revenue Services, the FCT Internal Revenue Service, and the Nigeria Revenue Service (NRS) have commenced annual return notification, monitoring, and enforcement activities for the current filing cycle.
What Annual Employer PAYE Returns Are
Annual employer PAYE returns are the statutory annual disclosure of emoluments paid to employees during the year, submitted by employers to the relevant tax authority.
They serve as the tax authority’s primary annual control mechanism for:
- verifying employee income disclosures,
- reconciling payroll records against PAYE remittances,
- validating employee residency and filing jurisdiction, and
- confirming compliance with PAYE, reliefs, and statutory deductions.
Who Is Required to File
Annual employer PAYE returns must be filed by all employers, including:
- companies and corporate entities,
- SMEs and startups,
- NGOs, associations, and religious bodies with paid staff,
- schools, hospitals, and professional firms,
- employers with one or multiple employees, and
- employers whose employees earned below the taxable threshold (nil returns still apply).
There is no exemption based on employee count, profitability, or PAYE position.
Where Employers Should File (Jurisdiction Guidance)
Employers are required to file annual returns based on the category and residency status of their employees, as follows:
State Internal Revenue Services / FCT-IRS
Employers file to the tax authority of the State or the Federal Capital Territory (FCT) where the employee is resident.
Nigeria Revenue Service (NRS)
Employers file to the NRS in respect of:
- members of the Nigerian Armed Forces, Police, and other specified federal services (in non-civilian capacity),
- officers of the Nigerian Foreign Service, and
- non-resident employees deriving income from employment in Nigeria who are not resident in any State or the FCT.
Information Typically Required from Employers
In line with notices currently being issued by tax authorities and the requirements of the Nigeria Tax Administration Act, employers are required to submit comprehensive annual PAYE schedules together with supporting documentation.
Typically required information includes:
- detailed employee PAYE schedules disclosing for each employee gross emoluments (including allowances and benefits in kind), total deductions, net emoluments, and tax deducted for the year;
- Employers’ Annual Declaration and Certificate (Form H1) relating to employees’ income and tax paid;
- schedule of PAYE remittances made during the year, supported by revenue receipts or payment evidence;
- evidence of statutory payments relevant to the employer, including business premises levy and development levy;
- evidence of actual rent paid by employees, where rent relief is to be applied in payroll computations; and
- projected annual payroll for the subsequent year, together with schedules of withholding taxes remitted in the preceding year, where requested.
Tax authorities increasingly rely on these schedules to reconcile payroll disclosures against PAYE remittances and employee records. Submissions that are incomplete or inconsistent often attract follow-up queries and compliance reviews.
Consequences of Late or Non-Filing
Under the Nigeria Tax Administration Act, 2025, failure to file statutory returns attracts administrative penalties, irrespective of whether PAYE has otherwise been deducted or remitted.
Specifically:
- a taxable person who fails or refuses to file required returns is liable to ₦100,000 in the first month in which the failure occurs and ₦50,000 for each subsequent month the failure continues; and
- persistent non-compliance may also result in compliance flags on the employer’s tax record, follow-up compliance queries or PAYE audits, delays or denial of Tax Clearance Certificates, and broader compliance reviews beyond the year under consideration.
These penalties accrue monthly until the filing obligation is met.
How Vi-M Supports Employers
Vi-M supports employers through focused, practical interventions around annual PAYE returns, including:
- pre-filing payroll and PAYE reconciliation reviews to identify inconsistencies before submission;
- employee TIN and payroll data validation to reduce rejection risks and post-filing queries;
- residency and jurisdiction checks, particularly for mobile, hybrid, or non-resident staff;
- pension and statutory deduction alignment to ensure disclosures are defensible; and
- quiet corrective filings to address legacy gaps without triggering unnecessary enforcement actions.
Our approach is preventive and compliance-first, helping employers meet statutory obligations accurately and on time.
Final Note
The 31 January deadline is fixed by law. Employers are advised to complete filings early, review submissions carefully, and seek professional support where payroll structures, employee movements, or classifications require clarification.