PAYE, Pension and NHF: Getting Nigerian Payroll Compliance Right in 2026

Every payroll run in Nigeria carries three statutory deductions: PAYE (income tax), pension contributions and NHF. Getting them wrong triggers penalties, arrears and a very uncomfortable meeting with the tax office.

The three non-negotiables

• PAYE — progressive tax on gross pay after allowances, remitted to the relevant state IRS.
• Pension — employee and employer contributions (8% and 10% minimum under the PRA), remitted to a PFA.
• NHF — 2.5% of basic salary to the Federal Mortgage Bank.

Why software matters

Rates and thresholds change; spreadsheets do not. A payroll engine built for Nigeria recomputes with the current tables, produces the remittance files and keeps an audit trail for every run.

Databytes has implemented HR and payroll for organisations across manufacturing, services and government. Book a demo and bring your payroll structure — we will show you it computed correctly, live.