Nigerian payroll & statutory compliance
The Nigeria Tax Act rewrote PAYE from 1 January 2026. KoboHR computes every payslip under the new law — every band, every relief, every statutory deduction — exactly. Not roughly. Exactly.
| Earnings | |
| Gross salary | ₦650,000.00 |
| Employee deductions | |
| Pension (8% of BHT) | ₦41,600.00 |
| PAYE — NTA 2026 bands | ₦86,012.00 |
| Rent relief applied (annual) | ₦400,000.00 |
| Employer obligations | |
| Pension (employer, 10%) | ₦52,000.00 |
| NSITF (1%) | ₦6,500.00 |
| Net pay | ₦522,388.00 |
The Nigeria Tax Act, 2025 — effective 1 January 2026
Four reform acts replaced the Personal Income Tax Act and rebuilt how PAYE is calculated. Every payroll cycle since January 2026 must use the new framework — and the new Nigeria Revenue Service cross-checks payroll, filings and bank data.
Why “to the kobo” is not a slogan
A kobo is the smallest unit of the naira. It's also our engineering standard. Every figure KoboHR produces can be traced back to the exact rule, rate and day-count that produced it.
The same inputs always produce the same payslip. No spreadsheet drift, no “it depends who ran it this month.” Finalized runs are locked and reproducible.
Joiners and leavers are prorated on true working-day counts stored as whole numbers. The fraction is exact, so the pay is exact.
Statutory schedules and WHT receipts and statements come out of the same engine that computed the pay — so what you file is what you paid, to the kobo.
Proration, the KoboHR way
18 / 22 days
A mid-month joiner's basis is stored as the integer pair — employed working days over working days in the month — not a rounded decimal that loses kobo.
Complete statutory coverage
Most tools handle two or three obligations and leave the rest to you. KoboHR computes the full set Nigerian employers actually owe — employee-side and employer-side — in the same run.
NTA 2026 progressive bands, ₦800k zero band, rent relief with documentation flags.
Employee 8% and employer 10% on basic + housing + transport, per the Pension Reform Act. Learn more →
Handled as voluntary for private-sector staff under the new framework — on or off per employee.
Mandatory health-insurance contributions computed and tracked alongside pay.
Employer-side 1% of payroll, computed automatically every cycle.
1% employer levy where thresholds apply — applied by rule, not by memory.
Receipts and statements generated from the same engine, ready for vendors and auditors.
Anniversary-based accrual with the Labour Act 12-month qualifying rule built in — not bolted on.
One platform, not multiple tools
The statutory engine is the hard part. Around it, KoboHR handles the everyday work of running people — leave, advances, self-service and records — so the same numbers flow through every screen, no re-keying, no reconciliation. Tap any card to see how we handle it.
Run a full, compliant cycle — preview every line, finalize with an audit trail, and produce the remittance evidence a clean Tax Clearance Certificate rests on.
How we do it →The Nigeria Tax Act 2025 (effective January 2026) reset PAYE bands, reliefs and the tax-free floor. KoboHR computes every statutory line — PAYE, pension, NHF, NHIA, NSITF, ITF, WHT — from a single versioned rule set, deterministically: the same inputs always produce the same figures, down to the kobo, with the working shown for audit.
Requests, approvals and balances — with the qualifying rule built in, and unpaid leave flowing straight into payroll, pro-rated to the day.
How we do it →The Labour Act (§18) grants paid annual leave only after twelve months of continuous service, above a statutory minimum. KoboHR anchors the leave year to each employee's hire date, enforces the twelve-month qualifying rule and the minimum-day floor automatically, and feeds approved unpaid leave into the next payroll so pay is pro-rated exactly — never estimated, never over-granted.
A proper alternative to the informal IOU — with policy control, approvals, and repayment recovered automatically from payroll.
How we do it →Set the employer policy — how much, over how long, at what rate — then approve requests with separation of duties (whoever requests can't self-approve). Repayments come off payroll automatically, capped to a safe share of each employee's net pay so a loan can never push take-home below a healthy floor; when a month is tight, the shortfall carries forward and the schedule extends rather than over-deducting.
Staff see their own payslips, leave and loan balances, and request changes — routed to HR for approval.
How we do it →Every employee gets a secure portal: download payslips as PDFs, check leave and loan balances, and submit profile or bank-detail changes that route to HR as an approval — never a silent edit. Sensitive fields stay encrypted, and who-changed-what is recorded. Fewer emails, fewer "can you resend my payslip" messages, and a clean record behind every change.
The filing-ready schedules, receipts and statements your Tax Clearance Certificate and your auditors ask for — without assembling them by hand.
How we do it →A Tax Clearance Certificate depends on showing that PAYE and other obligations were computed and remitted correctly. KoboHR generates the remittance schedules, WHT receipts and statutory statements from the very same engine that computed the pay — so the evidence always matches the payroll, cycle by cycle, ready to hand to a tax authority or an auditor.
Timesheets and attendance feeding hourly and daily pay directly — the same engine, the same accuracy.
What's coming →Attendance and timesheet capture will feed straight into the payroll engine for hourly and daily workers — no export, no import, no reconciliation between a separate clock system and pay. On the roadmap; the payroll side that consumes it is already built.
Built for how payroll is actually run
For SMEs that outgrew the spreadsheet — or never trusted it. Finalize a compliant run in minutes, give staff self-service payslips, and keep an audit trail you didn't have to build.
For the firms Nigerian SMEs already trust with payroll. Each client lives in a fully isolated workspace — separate data, separate settings, one login for your team.
For foreign companies and outsourcing operations with staff in Nigeria. Meet every local statutory obligation and hand head office the evidence — receipts, schedules and statements they can actually inspect.
Why KoboHR exists
KoboHR exists because Nigerian payroll deserves the same rigour as Nigerian banking. When the tax framework changed, most teams were left choosing between expensive enterprise suites and spreadsheets that were quietly wrong.
We took a different path: build the computation engine first, prove it against the law line by line, and only then dress it up. The name is the standard — if a payslip is off by one kobo, it's off.
The parallel-run guarantee
Bring us a real month. We'll compute it on KoboHR while you run it your usual way, and you compare the figures side by side — PAYE, pension, every statutory line, every kobo. If we don't match or beat your numbers, walk away. We can make this offer because the engine is deterministic; the numbers aren't opinions.
Simple per-employee pricing · no setup fees · hello@kobohr.cloud