When is PAYE tax due, and what are the penalties for Late remittance?
Under the Nigeria Tax Administration Act 2025, the timeline for PAYE (Pay-As-You-Earn) has stayed largely the same, but the "price of failure" has skyrocketed.
As an employer in 2026, you are essentially a trustee for the government. If you deduct tax from your employees' salaries and don't remit it on time, the law now treats it as a serious breach of trust.
1. When is PAYE Tax Due?
- Monthly Remittance: You must remit the deducted tax to the State Internal Revenue Service (SIRS) or the FCT-IRS (for Abuja) on or before the 10th day of the following month.
- Example: Taxes deducted from January 2026 salaries must be paid by February 10, 2026.
- Annual Returns (Employer): You must file a summary of all salaries paid and taxes deducted for the previous year by January 31 every year.
- Annual Returns (Employee): Individual employees must file their own personal tax returns by March 31 every year.
2. Penalties for Late Remittance (The 2026 "Zero Tolerance" Policy)
The new laws have moved away from "gentle slaps on the wrist" to significant financial and even criminal consequences.
| Infraction | Administrative Penalty | Interest/Additional Cost |
|---|---|---|
| Late Remittance | 10% of the amount due | Interest at the CBN MPR (often 18%+). |
| Failure to Deduct | 40% of the amount not deducted | Full payment of the principal tax. |
| Late Monthly Filing | ₦100,000 (1st month) | ₦50,000 for every extra month. |
| Late Annual Return | ₦500,000 (Corporate) | ₦50,000 (Individual). |
Criminal Warning: Under Section 4.1 of the new Act, if you deduct tax but willfully fail to remit it, you (the director or manager) can be sentenced to up to 3 years in prison, or a fine equal to the principal amount plus a 50% penalty, or both.
3. Why 2026 is Different: Personal Liability
Previously, many business owners felt "safe" behind their company name. The 2025 Act explicitly states that for tax offenses, the directors, managers, and secretaries are personally liable unless they can prove the offense happened without their knowledge or consent.
Summary Checklist
- Set your calendar: Mark the 10th of every month for PAYE and the 21st for VAT/WHT.
- Update your payroll: Ensure your system reflects the new ₦800,000 tax-free threshold so you don't over-deduct or under-deduct.
Check TINs: Ensure all employees have a valid TIN (which is now their NIN).