In most small Nigerian businesses, the answer to “who does payroll?” is whoever happened to be doing it when the business got big enough to need it. Often that is the founder, then the founder’s accountant, then an operations assistant who inherited the spreadsheet. The arrangement works until it does not, and it usually stops working at the moment the business adds enough staff that mistakes become expensive.

This guide looks at who does payroll in a company at different sizes, what each option gets right and wrong, and the controls that matter regardless of who holds the job.

Who does payroll in a company: the common options

We could not find a Nigerian survey that measures who owns payroll at micro, small and medium firms, so what follows is a description of common patterns and not a statistic. Five arrangements account for most small businesses:

• The owner. Typical for businesses with fewer than ten staff. The owner knows everyone’s pay and approves every payment.
• An in-house accountant or finance officer. Common once the business has a finance function. This person calculates, pays and records.
• An HR or admin officer. Often responsible for attendance, allowances and payslips, with a separate person making the bank transfer.
• An external accountant or payroll bureau. The business sends changes each month and receives a payroll register and remittance schedule.
• Payroll software with a named owner. The software performs the calculation, and a staff member reviews and approves each run.

None of these is automatically right. What matters is that someone accountable can explain every number, and that nobody checks their own work.

Why who does payroll matters to the business

Whoever runs payroll carries a legal risk on behalf of the business. The employer bears the statutory responsibility for deducting PAYE correctly, and tax authorities can pursue the employer or manager where PAYE was under-deducted. The person who prepares payroll, therefore, is making decisions that expose the owner and any directors named in the filings.

Knowing who does payroll also decides how quickly problems are found. A person working alone has nobody to notice an allowance entered in the wrong column, or a joiner added twice. In a business where several people touch the figures, those mistakes surface before the money moves.

Who does payroll best at each size

The right setup changes as headcount grows. The table below sets out a practical progression, based on practitioner experience.

These bands are rules of thumb. A ten-person firm with commission-based pay or staff in several states can be more complex than a fifty-person firm with fixed salaries.

The fraud risk behind who does payroll

Payroll fraud tends to be small and steady, so it is easy to miss, which is why the person who does payroll needs oversight. The Association of Certified Fraud Examiners’ 2024 Report to the Nations analysed 1,921 cases of occupational fraud worldwide. Payroll schemes made up 10% of those cases, with a median loss of $50,000 and a median duration of 18 months. These are global figures and not Nigerian ones, but they show the pattern: payroll fraud often runs for a year and a half before anyone notices.

The typical Nigerian versions are familiar to many business owners: a “ghost worker” who stays on the list after leaving, an inflated allowance for a friend, a salary advance that is never recovered, or a bank detail changed at the last minute. Each one depends on a single person being able to prepare, approve and pay without anyone else seeing the whole picture.

Segregation of duties: who does payroll, and who checks it

The standard control is to split payroll into three roles, held by different people:

1. Prepare. One person gathers the changes, calculates gross pay, deductions and net pay, and produces the payroll register.
2. Approve. A second person, such as the finance manager or a director, reviews the register against the previous month and signs off.
3. Pay. A third person, or the same approver using a separate bank login, releases the payment and remittances.

This is how large organisations handle it. The US Department of State’s Foreign Affairs Manual, for example, requires a payroll voucher to be certified by an officer who does not compute the individual amounts payable, maintain the payroll records or distribute the pay. A small business can copy the principle with fewer people. If you only have two, the owner approves and the employee prepares, and the owner never prepares what they approve.

The approval trail is easiest to keep with a proper voucher for each run, which we explain in payroll voucher.

Skills and qualifications for the person who does payroll

Whoever holds the job needs working knowledge of four things: PAYE bands and reliefs, the pension contribution base, the NHF opt-in position, and the remittance calendar. In Nigeria, professional training comes through bodies such as the Institute of Chartered Accountants of Nigeria for accounting, the Chartered Institute of Taxation of Nigeria for tax, and the Chartered Institute of Personnel Management of Nigeria for HR. A payroll officer does not need all three, but a business should have access to at least tax and accounting expertise.

Rules also change. The Nigeria Tax Act 2025 replaced the old PAYE regime on 1 January 2026, so anyone trained before then needs an update on the new bands and on rent relief, which has to be claimed in writing. If your payroll person has not been briefed, that is the first training budget to approve. Our guide on how payroll works is a good starting point for someone new to the role.

Handing payroll over when the founder steps back

Many owners run payroll for the first two or three years and then want out. The handover is where who does payroll changes from a person to a process, so it deserves a written checklist. Include the pay calendar, the list of employees with their states of residence and pension administrators, the PAYE and pension remittance steps, and where the previous twelve months of records are stored. Have the new owner run one month alongside you before you let go. If you skip this, the new person inherits a spreadsheet and a set of habits, and any mistakes in either carry forward unseen.

When to outsource payroll

Outsourcing to an accountant or payroll bureau makes sense in four situations:

• You have no staff member with the time or training to run payroll safely.
• The founder is still the payroll operator and wants to step away.
• The business pays staff across several states and needs help with each state’s PAYE remittance.
• You want an independent party to prepare figures that the owner then approves.

Outsourcing does not remove your responsibility. The owner remains accountable for deductions, so ask any provider to show proof of each remittance. We did not find published Nigerian pricing benchmarks for outsourced payroll, so request quotes by headcount and compare what is included: calculation, payslips, remittance filing and the annual return.

The Bento Africa collapse in early 2025 is a reminder to check where your money sits. A provider that holds your deducted tax and pension without giving you independent proof of payment is a risk worth weighing, and we discuss it in more detail in our piece on whether payroll software is safe.

How to decide who does payroll in your company

Run a short test. Write down every step of your current payroll, from collecting changes to filing the annual return, and put a name next to each. Then ask three questions:

• Is any step performed and approved by the same person?
• Is any step known to only one person?
• Is any step missing a name?

Fix those three problems first. Once you know who does payroll at each step, you can decide whether to keep the setup, add a reviewer, move to software, or hand it to a specialist. Understanding why payroll is important to the whole business makes that conversation easier with your team.