Under the Nigeria Tax Administration Act 2025, record-keeping has shifted from "recommended" to "mandatory and auditable." For 2026, the Nigeria Revenue Service (NRS) and State Internal Revenue Services (SIRS) expect digital-ready documentation to support every deduction you make.
As an employer, you must maintain these records for at least six (6) years.
1. Personnel & Contract Records
Before you even calculate tax, you must have the legal foundation for each employee:
- Employment Contracts: Signed agreements stating the gross salary, allowances (Basic, Housing, Transport), and job description.
- TIN/NIN Records: A verified Tax Identification Number for every staff member. In 2026, the NIN serves as the TIN for individuals.
- Proof of Residency: Records showing the employee’s home address to determine which state’s tax authority (e.g., LIRS, FCT-IRS) should receive the remittance.
2. The Payroll Register (Monthly & Annual)
This is your most critical document during an audit. It must show a line-by-line breakdown for every employee:
- Gross Emoluments: Total pay including all allowances, bonuses, and "Benefits in Kind" (e.g., company cars or provided housing).
- Itemized Deductions: Clear records of:
- Pension (8%): Employee portion.
- NHF (2.5%): National Housing Fund.
- NHIS: National Health Insurance.
- Life Insurance Premiums.
- Net Pay: The final amount transferred to the employee.
3. The "New 2026" Relief Documentation
Because the 2025 Act replaced the old automatic relief with specific ones, you must have physical or digital proof for these to be valid:
- Rent Relief (20% cap): To deduct this from an employee's taxable income, you must keep copies of their Rent Receipts and Lease Agreements. Without these, the tax office will disallow the deduction during an audit.
- Mortgage Interest: Evidence of interest paid on an owner-occupied property.
- Disability Relief: Relevant certificates if claiming specific reliefs for employees with disabilities.
4. Evidence of Remittance
It is not enough to deduct the tax; you must prove it left your bank account:
- Monthly Tax Schedules: The list of employees and amounts sent to the tax office by the 10th of every month.
- Electronic Receipts: Digital receipts (e-receipts) generated from the state tax portals (like TaxPro Max or state-specific platforms).
- Pension & NSITF Receipts: Evidence of remittance to Pension Fund Administrators (PFAs) and the Social Insurance Trust Fund.
Summary Checklist for 2026 Compliance
| Record Category | What to Keep | Format |
|---|---|---|
| Salary | Payslips, Payroll Register, Bank Statements | Digital (Preferred) |
| Deductions | PFA Statements, NHF/NHIS Remittance slips | Digital |
| Reliefs | Rent Receipts, Insurance Policies, Mortgage Letters | Original Scans |
| Exit Records | Termination letters, Final Tax Clearance (Form L) | Physical/Digital |
Pro-Tip: In 2026, the NRS can deploy "Fiscalisation Tools" (remote audit software) to check your payroll. If your payroll software isn't integrated or if your records are only on paper, you risk an administrative fine of ₦100,000 plus ₦50,000 for every month the records remain "unstructured."