Nigeria's tax architecture has changed but some employer payroll systems have not caught up. The Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 took effect on 1 January 2026 and redefined significant aspects of how PAYE operates; from a new six-band tax structure, to changes affecting gratuity, NHF deductions, severance benefits, and others. If your payroll system has not been updated to reflect these changes, every pay slip generated since 1 January 2026 has been based on outdated systems, exposing your organization to compliance risk and penalties. This article examines what employers need to do to bridge the gap in light of the new tax law regime.
Our employment lawyers in Nigeria help clients meet their workforce objectives by advising on a range of key legal and HR issues including the applicable laws, employment arrangements and workforce strategies, HR policies, employee share schemes, union negotiations, termination of employments, redundancy, legal and compliance issues and limitation of liability.
We prepare employment agreements, handbooks for senior and junior employees, HR policies, non-compete, non-circumvention agreements and other relevant documents. We partner with our clients, wherever they do business, to find solutions to their day to day issues and manage risk and legal challenges.
We work closely with our clients locally, internationally and across borders. Our global reach, in-depth knowledge and expertise means that we can partner with clients to drive consistency, deliver cost savings and help them identify and manage their priorities and risk across multiple locations.
Experience has included advising:
- A multinational company in structuring employment arrangements for staff of its Nigerian subsidiary.
- An indigenous oil and gas company in establishing its employee phantom share scheme.
- A multinational freight forwarding company with regards to union negotiations and termination of employment.
- A multinational company on redundancy, legal and compliance issues arising from its global restructuring.
- A multinational company on employment arrangements and limitation of liability in Nigeria.
- Various companies on employment agreements, handbooks for senior and junior employees, human resource policies, non-compete and non-circumvention agreements.