The tax and pension changes affecting Nigerian employers come from two directions. The first is already law: the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 took effect on 1 January 2026 and rewrote how PAYE is calculated, filed and penalised.[1] The second is still on the table: a Pension Reform Bill 2026 that would widen who must join the pension scheme and raise what employers pay.[2]

This report separates the two. It sets out which tax and pension changes are in force, which are only proposed, what they cost in naira for typical salaries, where the published sources disagree, and which dates employers should put in a calendar. Everything is current as of 12 October 2026. Where we could not confirm a detail from a primary source, we say so.

Summary: what employers need to know about the tax and pension changes

The points below summarise the tax and pension changes in order of urgency.

• The PAYE rules are new, and the net effect on pay is small. The Consolidated Relief Allowance and the 1% minimum tax are gone. The first ₦800,000 of annual income is taxed at 0%, and bands rise from 15% to 25%.[3] For a typical salaried employee, the change is close to neutral until rent relief is claimed.
• Rent relief decides who gains. It is worth up to ₦500,000 of deduction a year, and an employee only receives it if it is claimed in writing with evidence.[1][3]
• Administration has moved online. Lagos accepts annual employer returns only through its eTax portal,[4] and the Nigeria Revenue Service planned to replace TaxPro Max with its Rev360 platform from 30 April 2026.[5]
• Pension enforcement is rising, and the rules may tighten. The pension regulator recovered ₦1.18 billion from 15 employers in the first quarter of 2026, with penalties of ₦729 million exceeding the ₦450 million in unpaid contributions.[6]
• The Pension Reform Bill 2026 is proposed, not law. It would cut the mandatory threshold from 15 employees to three, lift the employer minimum from 10% to 12%, and triple the monthly late penalty from 2% to 6%.[2]

Tax and pension changes already in force

The table below lists the changes that employers must follow today.

Three details inside that table matter more than their size suggests. The statutory annual return date is 31 January, and the 2026 extension in Lagos to 7 February was a one-off.[4][7] Employers and employees are jointly responsible for the return, so a missing employer filing affects staff as well.[1] And gratuity is now taxable, so employers must calculate PAYE before paying it to leaving employees.[1]

What the new PAYE rules cost in naira

Employers often ask whether the 2026 bands make staff better or worse off. The answer depends on salary and on rent relief. The table below compares monthly PAYE under the old and new systems for three salaries, using the same assumptions throughout: all pay is basic, housing and transport, pension is 8%, no other reliefs apply, and the 2025 figure uses the Consolidated Relief Allowance of the higher of ₦200,000 or 1% of gross income plus 20% of gross income.

Without rent relief, the new bands leave low and middle earners where they were and cost the highest earner slightly more. With rent relief, every employee in the table gains, and the gain is largest for the ₦500,000 salary, which pays enough rent to approach the cap without being limited by it. For the ₦1,500,000 salary the relief is capped at ₦500,000 a year, so the benefit stops growing.

Method and assumptions

One caution on method. This comparison treats the old relief as 20% of gross income before pension. An alternative reading that applies the 20% after deducting pension produces small gains for every salary without rent relief, between ₦443 and ₦1,687 a month, so the conclusion that the structural change is close to neutral holds either way. Any employer publishing its own comparison should state which method it used. Arithmetic: each figure applies the published bands to annual taxable income, then divides by twelve.

Of all the tax and pension changes so far, rent relief is the one that most directly affects take-home pay. The practical consequence is that an employer who does not collect rent evidence leaves staff paying more PAYE than necessary, and our guide to PAYE in Nigeria explains how the claim works. The documents accepted include a receipt, a lease, or an employer-approved rent declaration with the landlord’s details and the property address.[1]

Administration changes: portals, returns and penalties

Filing has moved online

The administrative tax and pension changes are less visible than the new bands, yet they are where most penalties arise. Lagos told employers that electronic filing through its eTax platform is “the only approved channel” for annual returns and that manual filing has been phased out.[4] The Nigeria Revenue Service has also described its Rev360 platform as a replacement for TaxPro Max, scheduled to go live on 30 April 2026, with existing users migrated automatically and simplified registration drawn from verified national databases.[5] We could not confirm from the sources reviewed that every state has moved to the same system, so employers with staff in several states should check each state’s portal.

Penalties apply to the employer first

The penalty structure applies to the employer even when the error is in a calculation done by someone else. Failing to deduct PAYE carries a 40% penalty on the amount that should have been deducted. Deducting without remitting carries the unpaid amount, a 10% administrative penalty and interest at the Central Bank’s rate. Late or inaccurate returns carry ₦100,000 for the first month and ₦50,000 for each month after.[1] Tax authorities can pursue the employer or manager where PAYE was under-deducted.[1]

Lagos has also activated its power of substitution under the new administration law, which lets it collect tax owed by a defaulter from third parties holding the defaulter’s money, such as banks, tenants and customers.[8]

Records must be kept for six years

The Nigeria Tax Administration Act requires books and records to be kept for at least six years after the year of assessment to which the income relates.[7] For payroll that means registers, payslips, bank schedules, rent evidence and remittance receipts need a retention routine that does not depend on one person’s laptop.

Pension changes in force and how they are enforced

None of the pension rules among these tax and pension changes is new in 2026, because the change is in how they are enforced. In the first quarter of 2026 the pension regulator recovered ₦1.18 billion from 15 defaulting employers: ₦450 million in contributions and ₦729 million in penalties.[6] It also issued 12,185 electronic Pension Clearance Certificates covering ₦212.63 billion in remitted contributions for 199,481 employees.[6]

Penalties made up about 62% of what these employers paid. That follows a pattern the regulator announced in December 2025 under a “zero tolerance” approach to defaults, including plans to link pension compliance to standing with other regulators.[9] In July 2026 the pension regulator and the anti-corruption commission reported recovering more than ₦3 billion from employers in the electricity sector.[10]

For employers, the practical message is that remittance within seven working days is being checked, and the cost of default grows every month it continues. Our guide on pension and NHF deductions shows where small businesses go wrong, and our earlier state of payroll compliance report covers the cumulative enforcement figures in more detail.

Pension changes still proposed: the Pension Reform Bill 2026

Unlike the other tax and pension changes in this report, the Pension Reform Bill 2026 has not been passed. It was analysed by the law firm KENNA LP in BusinessDay on 8 October 2026.[2] None of the changes below is binding, but they show where the pension rules may go and give employers time to prepare.

The same analysis notes that where an employer elects to bear the full pension contribution, the Bill sets the employer minimum at 25%, and it flags that figure as a possible drafting inconsistency.[2] After comments on the proposed increase, the Director-General of PenCom said on 22 July 2026 that any increase in contribution rates would apply to employers and not to employees.[11]

What the Bill would cost

If the Bill passes as described, the cost to employers can be estimated with simple arithmetic. These examples assume all pay is pensionable.

The second row is the one that matters most to small employers. A ten-person firm that is outside mandatory coverage today would have to enrol every employee, pay an employer contribution, and appoint pension administrators. The KENNA analysis advises firms with three to 14 staff to prepare for that, including buying group life cover and clearing any arrears before criminal sanctions apply.[2]

Why these tax and pension changes matter more for small employers

Large employers have payroll teams and tax advisers who read each circular. A small employer usually has one person doing payroll alongside other work, which makes the timing of tax and pension changes a practical problem as well as a legal one. A rule that takes effect on 1 January is already wrong in the spreadsheet by the January pay run, and nobody notices until a staff member queries a payslip or a tax office writes to the owner.

Small employers also hold less margin for penalties. The pension recoveries in the first quarter of 2026 averaged about ₦79 million per employer across 15 employers, and the penalty share was larger than the contributions owed. A business with ten staff and a monthly payroll of ₦3 million would struggle to absorb a six-month default plus penalties, even at today’s 2% rate. At the proposed 6% rate the same default would cost three times as much each month.

Finally, small employers are the group the Pension Reform Bill 2026 would pull into the scheme for the first time. If the three-employee threshold is adopted, thousands of businesses that have never dealt with a pension administrator will need to register employees, choose administrators and set up monthly remittances at the same time. Starting that work early, even only by collecting each employee’s pension details, makes the change much easier to absorb.

Open questions and conflicting information

Several of the tax and pension changes are described differently in different sources. We list them so that employers do not rely on a number that may be wrong.

• Pension threshold today. Some vendor guides state that pension is mandatory from three employees. The analysis of the Bill describes the current threshold as 15, with three as the proposal.[2] Treat 15 as current law until the Bill passes.
• Whether the 10% penalty recurs. Legal summaries describe the PAYE non-remittance penalty as 10% plus interest at the Central Bank’s rate.[1] Some commentary reads the Act as saying 10% per annum, which would make it a continuing charge, and the Act does not say how a default shorter than a year is treated. Check the wording in the Act before relying on a figure.[7]
• PAYE remittance date. Practical guidance from state tax offices is to remit by the 10th of the following month. Some commentary refers to the 21st as the start of the statutory penalty. We could not reconcile the two from published summaries, so remit by the 10th.
• Rev360 date. The platform’s own tax alert said it was scheduled to go live on 30 April 2026. We did not find independent confirmation that the switch happened on that date, so confirm the status before telling staff to use it.[5]
• NHF base. NHF has been voluntary for private-sector employees since February 2023, and employers should deduct only with consent.[1] Whether the 2.5% applies to basic salary or total monthly income remains unsettled, and most payroll practice still uses basic.

Calendar: dates for the tax and pension changes

The dates below are the ones we could verify. Items marked “watch” have no fixed date.

What employers should do about the tax and pension changes

Six actions cover most of the exposure from these tax and pension changes:

1. Confirm your payroll uses the 2026 bands. Test it against known cases, such as ₦500,000 a month producing ₦65,300 of PAYE with no relief.
2. Collect rent evidence. Ask every employee for a signed declaration or lease, and apply the relief only when it is on file.
3. Check your filing channel. Register on your state’s portal and the Nigeria Revenue Service platform, and make sure each employee’s Tax ID is captured.
4. Put PAYE and pension deadlines in a shared calendar with a named owner and a backup.
5. Model the Pension Reform Bill. Calculate what a 12% employer rate and a three-employee threshold would cost you, so a decision does not surprise your budget.
6. Keep six years of payroll records in a place that does not depend on one person.

Taken together, the tax and pension changes of 2026 reward employers who keep records, collect evidence and remit on time, and they penalise those who rely on memory or an outdated spreadsheet. The dates and rates will keep moving, so the safest habit is to review this list each quarter. For the technology side of keeping up, our forthcoming report on payroll software adoption in Africa looks at who is automating compliance and who is not.

References

1. [1]  Nigeria’s 2026 payroll taxes and employer liability: FAQs [Internet]. DLA Piper Africa (Olajide Oyewole LLP); 2026 Aug 28 [cited 2026 Oct 12]. Available from: dlapiperafrica.com
2. [2]  The Pension Reform Bill 2026: what Nigeria’s proposed pension overhaul means for employers [Internet]. BusinessDay (KENNA LP); 2026 Oct 8 [cited 2026 Oct 12]. Available from: businessday.ng
3. [3]  Nigeria Tax Act 2025: final approved copy [Internet]. TheCable; 2026 Jan [cited 2026 Oct 12]. Available from: thecable.ng
4. [4]  LIRS extends deadline for employers’ annual tax returns [Internet]. PM News Nigeria; 2026 Jan 31 [cited 2026 Oct 12]. Available from: pmnewsnigeria.com
5. [5]  Rev 360: new digital tax platform by NRS [Internet]. Forvis Mazars Nigeria; 2026 [cited 2026 Oct 12]. Available from: forvismazars.com
6. [6]  PenCom Q1 2026 Quarterly Industry Report [Internet]. National Pension Commission; 2026 [cited 2026 Oct 12]. Available from: pencom.gov.ng
7. [7]  Nigeria Tax Administration Act 2025 [Internet]. Nigeria Revenue Service; 2025 [cited 2026 Oct 12]. ss. 14, 31. Available from: nrs.gov.ng
8. [8]  Lagos Revenue Service activates power of substitution to boost tax recovery [Internet]. AllAfrica; 2026 Jan 28 [cited 2026 Oct 12]. Available from: allafrica.com
9. [9]  PenCom announces new era of zero tolerance for pension defaults [Internet]. BusinessDay; 2025 Dec [cited 2026 Oct 12]. Available from: businessday.ng
10. [10]  PenCom, ICPC recover N3 billion in unremitted pension contributions from electricity sector employers [Internet]. Nairametrics; 2026 Jul 1 [cited 2026 Oct 12]. Available from: nairametrics.com
11. [11]  PenCom DG says proposed pension contribution increase applies only to employers [Internet]. Nairametrics; 2026 Jul 22 [cited 2026 Oct 12]. Available from: nairametrics.com