Here is a rule that costs Nigerian businesses real money, and almost nothing warns you about it:
PAYE is remitted to the internal revenue service of the state where the employee lives — not where your company is registered.
If your office is in Lagos and one of your staff lives in Ogun, that person's PAYE belongs to Ogun. Sending it all to Lagos does not make you compliant. It makes you a business that has underpaid one state and overpaid another.
Why this happens more than you would think
It used to be that a company and its staff were mostly in the same place. That is no longer true:
- Remote and hybrid work is normal now
- Housing costs push people into neighbouring states while they keep working in the city
- Businesses hire in one state and open a branch in another
- Lagos and Ogun, Abuja and Nasarawa — the borders are commuting distance
A five-person company can easily owe three different revenue services.
What goes wrong when you get it right
Nothing, if you do the paperwork correctly. The problem is that doing it correctly is genuinely fiddly:
- You need to know each employee's state of residence, and keep it current when they move
- You need a separate remittance schedule for each state, with its own totals
- Each state's revenue service has its own filing process
- Your single company-wide PAYE total is now several smaller totals that must add back up
Do that in a spreadsheet and the errors are silent. A number in the wrong column looks exactly like a number in the right one.
What to do about it
Record where people live, not just where they work. Ask on the day someone joins, and ask again when they tell you they have moved. It is a two-minute conversation that prevents a filing problem.
Keep the schedules separate from the start. Do not compute one big PAYE figure and try to divide it afterwards — build it per state and let the total emerge from the parts.
Check the split before you pay anything. The moment to catch a misallocation is before the money leaves, not when a revenue service asks a question months later.
How we handle it
Komply records a state of residence for every employee, defaulting to your company's state so you are not typing the same thing repeatedly. When a payroll run covers more than one state, it produces one remittance schedule per state, each totalled separately, and shows you the split on screen before you approve anything.
If everyone is in the same state you will never notice the feature. That is intentional.
Figures used in our calculations come from the Nigeria Tax Act 2025 — effective January 2026.