A Nigerian payroll bureau's monthly cycle
A payroll bureau's month for a Nigerian client, from employee inputs to PAYE by State, pension per PFA, NHF and NSITF, with remittance dates.
By Achekam · · 6 min read · For Accountants & audit firms in Nigeria
A payroll bureau's reputation in Nigeria is made or lost in the second week of the month. Salaries went out on time, the client is happy, and then a staff member in Ogun State discovers her PAYE was paid to Lagos, the pension schedule for one fund administrator is missing two new joiners, and the NSITF contribution was never raised. None of those errors shows up on payday. All of them surface later, as penalties, clearance problems or angry employees.
The way to avoid them is a fixed monthly cycle that every client goes through in the same order. This is what that cycle looks like for a Nigerian client, and where Achekam fits when the client's payroll runs on it.
Inputs, starting with each employee's State of residence
Every month begins with changes: new starters, leavers, salary increases, unpaid leave, overtime, deductions. Collect them by a fixed cut-off date agreed with the client, in writing, and refuse late changes unless a named person at the client authorises them.
For Nigerian payroll one input matters more than most: the State in which each employee lives. A head office in Lagos says nothing about where a sales representative in Abeokuta or a driver in Port Harcourt makes their home, and a bureau serving a company with staff across several States must hold that detail for every person.
When a client's payroll runs on Achekam, the system assigns each employee's PAYE to the revenue service of the State where that employee lives, and it refuses to approve a pay run while any employee's State is unknown. That refusal applies even when an employee's PAYE for the month is nil, because the schedules and the annual employer return still need to place that person correctly. Treat a blocked run as a missing input to chase, not an obstacle to work around.
Preparing and approving the run
Payroll is one of the few areas where a bureau's own controls are visible to the client every month. Keep preparation and approval with different people.
In the client's books on Achekam, a pay run is approved by someone other than the person who prepared it. Nobody can approve a run that pays themselves, and once a run is approved it is never recalculated. That has two consequences for a bureau. Each client needs at least two people in payroll roles, which may mean one at the bureau and one at the client. And errors found after approval are corrected in the next run or by a separate adjustment, not by quietly reopening the approved one. The wider argument for that split is made in separating preparer and approver in a bureau.
PAYE by State, pension by fund, NHF and NSITF
With the run approved, the statutory work begins. Achekam runs Nigerian payroll with PAYE assigned by State of residence, pension, NHF, NSITF and ITF, and prepares the schedules for each State revenue service, each pension fund administrator and each fund, for the employer to file and pay. The main obligations look like this:
| Obligation | What the authority says | Who it goes to |
|---|---|---|
| PAYE | Due by the 10th of the following month where payment is due to a State, per the LIRS FAQ | The State revenue service Achekam assigns from each employee's State of residence |
| Pension | PenCom's clearance requirements refer to a minimum of 10% of monthly emoluments from the employer and 8% from the employee | Each employee's pension fund administrator |
| NHF | Deducted at source and remitted with a schedule showing the amounts and the period covered, according to FMBN | The Federal Mortgage Bank of Nigeria |
| NSITF | A monthly Employees Compensation Scheme contribution of 1% of total monthly payroll, employer-funded, according to NSITF | NSITF |
The pension figures come from a PenCom document on its clearance certificate requirements that dates from 2017, so confirm the current requirements with PenCom before relying on them. NHF in Achekam is opt-in per employer, and the employer states which pay it is calculated on; the decision and its effects are covered in whether a client should opt in to NHF.
Remittance dates and what lateness costs
The Lagos State Internal Revenue Service's FAQ says that where payment is due to a State Internal Revenue Service, PAYE deducted must be remitted no later than the 10th day of the following month, while amounts due to the Nigeria Revenue Service must be remitted by the 21st of the month following the month of payment. The LIRS frequently asked questions set out those dates alongside the State's guidance on PAYE and the annual employer return.
The Nigeria Tax Administration Act, 2025 adds a consequence for anyone who deducts or withholds tax and does not remit it by the 21st day of the month after the deduction: the person is liable for the amount not remitted, an administrative penalty of 10% per annum of that amount, and interest at the prevailing Central Bank of Nigeria monetary policy rate. A bureau that plans to the earliest date in its calendar, rather than the latest, avoids the argument about which date applied.
For pension and NHF, the bureau should confirm each client's remittance date with the PFA and FMBN directly and record it on the client's file. Rates and dates change; treat every figure here as correct at the time of writing and check the authority's current guidance.
Producing schedules and recording what the client paid
Two limits matter for planning. First, Achekam's Nigerian payroll schedules download as Achekam's own CSV layout and as a PDF, not in each authority's upload template. A bureau that files on a portal requiring its own template will need to transfer the data into that template, and should build that step into the timetable.
Second, Achekam does not file or pay Nigerian payroll returns. A person records the filing on the authority's portal, with the reference the authority gave, and a second person confirms each payment. Each schedule is finalised by someone other than the person who prepared it. For a bureau, that record is valuable: when a client's employee asks months later whether her pension was paid, the reference and the person who confirmed it are on file.
A bureau calendar for each Nigerian client
A simple monthly rhythm, adjusted for each client's pay date:
- Cut-off. Receive and confirm all changes, including the State of residence for every new starter.
- Prepare. Run the payroll and review exceptions such as new joiners, leavers and large changes.
- Approve. A second person approves; correct errors before approval, not after.
- Pay salaries. On the client's pay date.
- By the 10th. PAYE to each State revenue service, per the LIRS guidance.
- During the month. Pension to each PFA, NHF to FMBN where the client has opted in, NSITF contribution, on the dates confirmed with each body.
- Record. Enter each filing reference, and have a second person confirm each payment.
- Close. Send the client a summary of what was paid, to whom and with which reference.
Pick the client with employees in the most States and run next month's payroll strictly to this calendar. Note where the cycle slipped, fix the input or the date that caused it, and then roll the same calendar out to every Nigerian client the bureau serves.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
