As the year draws to a close, many business owners are preparing for the changes that will come with Nigeria’s new tax law taking effect in January. These updates are designed to modernise the tax system and offer relief to low and middle-income earners. However, they also require business owners to adjust how they calculate and remit PAYE for their employees.
Understanding what is changing and how it affects your business is the first step to staying compliant and avoiding penalties.
1. New Income Thresholds and PAYE Adjustments
The updated law introduces new income bands. Many low-income employees may now fall into reduced or zero PAYE brackets. This means employers must apply the correct thresholds so employees receive their accurate take-home pay.
For businesses, this means reviewing salary structures and updating payroll processes before January to avoid miscalculations.
2. Revised Personal Reliefs
Personal reliefs and allowances have been adjusted. This affects how taxable income is calculated and what portion of an employee’s salary becomes subject to PAYE. Businesses must ensure these new reliefs are applied correctly on every payslip.
3. Higher Need for Accurate Payroll Records
Employees will expect clarity on how the new tax rules affect their earnings. Payslips must clearly show taxable income, applicable reliefs, and final PAYE deductions. Any errors can create distrust or disputes within the team.
4. Increased Compliance Responsibility for Employers
Regardless of whether an employee is exempt or taxable, employers remain responsible for:
- Calculating PAYE correctly
- Remitting deductions on time
- Keeping accurate monthly records
- Updating payroll systems to reflect new tax rules
Failure to comply can lead to penalties or compliance audits.
How MesHr Helps Your Business Stay Compliant Effortlessly
As the new tax law comes into effect, MesHr ensures your business transitions smoothly.
Automatic PAYE Calculations
MesHr updates tax bands and thresholds according to the new law. You do not need to adjust formulas manually.
Accurate Employee Classification
MesHr identifies which employees are exempt or taxable based on the new income thresholds and applies the correct PAYE automatically.
Compliant Payslips
Every payslip generated shows:
- Gross pay
- Approved reliefs
- Taxable income
- PAYE deducted
- Net salary
This creates transparency and builds trust with your team.
Easy PAYE Remittances
MesHr provides accurate PAYE summaries for remittance to the tax authorities. This helps your business stay compliant without stress.
Less Work for You
With payroll, PAYE, and employee records handled in one place, your team spends less time on manual calculations and more time running the business.
Prepare Your Business Before January
The new tax law brings changes, but the transition does not have to be difficult. With MesHr, you can stay compliant, run payroll accurately, and give your employees confidence in how their salaries are handled.
Your HR, payroll, and compliance. All in one place.
Visit meshr.africa to see how MesHr can support your business this new year.