Staff in more than one state? Where to pay their PAYE in Nigeria

A company with an office in Lagos and staff living in Ogun, Oyo and Abuja doesn’t pay all its PAYE to Lagos. In Nigeria, employees’ income tax is collected by the states, and each employee’s tax belongs to the state where they are resident. Get this wrong and you can end up paying the right amount of tax to the wrong government, which doesn’t count as paying it at all.

The basic rule

• PAYE is a state tax. It’s administered by each state’s Internal Revenue Service (and the FCT-IRS for Abuja), not by the federal tax authority.
• It goes to the state of residence. That’s the state where the employee usually lives, which isn’t necessarily where they work.
• It’s due monthly, generally by the 10th of the following month.
• The rates are the same everywhere. Under the Nigeria Tax Act 2025, the bands and reliefs are national, so the tax amount doesn’t change from state to state. Only the destination does.

Common situations

Branches in different states. Staff at your Abuja branch who live in Abuja pay to FCT-IRS. Staff at your Lagos head office who live in Lagos pay to LIRS. Each branch’s payroll is often the easy part. The tricky bit is the next one.

Commuters across a border. Plenty of people work in Lagos and live in Ogun, around Mowe, Ibafo or Sango Ota. Their PAYE goes to Ogun State, even though they come into your Lagos office every day.

Remote staff. A developer living in Enugu who works fully remotely for your Lagos company pays PAYE to Enugu State. As remote and hybrid work grows, more employers find they need tax registrations in states where they have no office at all.

Employees who move. When someone relocates during the year, their tax residence changes with them. Update their state from the month they move, and keep a record of when it changed.

Keeping it organised

1. Record each employee’s state of residence on their file, separate from their work location, and ask them to confirm it every year.
2. Register with each state IRS where you have resident employees, so you can file and pay.
3. Group your PAYE schedule by state. One remittance and one schedule per state each month.
4. Keep the receipts by state. Each state issues its own, and you’ll need them for annual returns and for employees’ tax clearance certificates.
5. File annual returns with every state you remitted to, listing each employee’s pay and tax for the year.

Why it matters

Paying the wrong state creates two problems at once. The state that should have received the tax treats it as unpaid and can charge penalties and interest. The state that received it has no obligation to pass it on. Your employee, meanwhile, may struggle to get a tax clearance certificate from their real state of residence, which they need for things like visas and government contracts.

How Eban handles it

Eban stores each Nigerian employee’s state of tax residence alongside their work branch, so the two are never confused. Because the NTA 2025 rates are national, the PAYE calculation is the same for everyone, and the state only decides where the money goes. The state is saved with every payroll run, so months later you can still see which state each employee’s tax was owed to, even if they’ve moved since.