PAYE Returns¶
Last reviewed: 2026-04-01 · Nnamdi
Status: Complete
Route: /tax/paye-returns
1. What is it?¶
PAYE Returns is the most comprehensive payroll and tax module in Finora. It combines employee management, payroll processing, PAYE return generation, and statutory remittance schedules (PAYE, Pension, NHF, NHIS) into a single four-tab interface. Businesses add employees, run monthly payroll, generate PAYE returns for filing with the State Internal Revenue Service (SIRS), and export remittance schedules in portal-compatible formats. Payroll runs are automatically recorded in the business's books when approved — no separate salary expense entries are needed.
2. How does it work in Finora?¶
2.1 Page header¶
- Heading: "PAYE Returns"
- Subtitle: "Manage employees and file monthly PAYE returns to State Internal Revenue"
- Year selector — 2024 / 2025 / 2026
Info banner (Payroll Runs and Schedules tabs):
"Payroll is automatically recorded in your books when approved. You do not need to add separate salary expenses."
2.2 Tab: PAYE Returns¶
KPI summary strip (test business, 2026):
| Metric | Value |
|---|---|
| Total Returns | 1 |
| Filed | 0 |
| Pending | 1 |
| Total PAYE (2026) | ₦70,267.99 |
Returns list: "PAYE Returns - 2026" - Refresh button - Generate Return button (disabled if no active employees)
Each return card shows:
| Field | Description |
|---|---|
| Period | e.g., "Mar 2026" |
| Status badge | Draft / Filed |
| State | e.g., "Lagos" — the SIRS to which this return is filed |
| Reference | e.g., "PAYE-2026-03" |
| Employee count | e.g., "1 employee(s)" |
| PAYE Deducted | Total PAYE for the period (e.g., ₦70,267.99) |
| Due Date | e.g., "Apr 10, 2026" |
Action buttons per return:
| Button | Description |
|---|---|
| View | Opens the full return details |
| Export Excel | Downloads the PAYE return in Excel format |
| File for Me | Routes to Filing Services for managed PAYE filing (₦9,500 + 7.5% VAT) |
| Mark as Filed | Marks the return as filed after self-filing with SIRS |
| Delete Draft Return | Removes a draft return |
Empty state (no active employees):
"No Active Employees — Add employees in the Employees tab before generating PAYE returns." Generate Return button is disabled until employees exist.
2.3 Tab: Employees¶
Header: "Employees ([count])" - Bulk Import button — import employees from a spreadsheet - Add Employee button — add a single employee manually
Employee table columns:
| Column | Description |
|---|---|
| Name | Full name |
| Position | Job title |
| Tax Payer No. | State tax payer identification number (e.g., N-512345) |
| Basic | Basic salary (e.g., ₦300,000.00) |
| Gross | Gross monthly salary including allowances (e.g., ₦530,000.00) |
| Monthly PAYE | Calculated PAYE deduction (e.g., ₦70,267.99) |
| Net | Take-home pay after all deductions (e.g., ₦417,332.01) |
| Status | active / inactive |
| Actions | View Payslips / Generate New Payslip / Edit / Delete |
Sample employee (test business): - Amara Okonkwo, Head Teacher, N-512345 - Basic ₦300,000 / Gross ₦530,000 / Monthly PAYE ₦70,267.99 / Net ₦417,332.01 / active
2.4 Tab: Payroll Runs¶
KPI summary strip:
| Metric | Value (test business) |
|---|---|
| Total Payroll Runs | 1 |
| Total Gross Salaries | ₦530,000.00 |
| Total PAYE Deducted | ₦70,267.99 |
| Pending Approval | 0 |
Create Payroll Run button — starts a new monthly payroll cycle.
Payroll Runs table columns:
| Column | Description |
|---|---|
| Month | Payroll period (e.g., March 2026) |
| Status | Draft / Approved / Posted to GL (with "GL Posted" badge) |
| Employees | Number of employees in the run |
| Gross | Total gross salaries |
| PAYE | Total PAYE deducted |
| Pension | Total pension contributions (e.g., ₦42,400.00) |
| Net | Total net pay |
| Actions | Mark as Paid (if posted to GL) |
Sample payroll run (test business): - March 2026 / Posted to GL / 1 employee / Gross ₦530,000 / PAYE ₦70,267.99 / Pension ₦42,400.00 / Net ₦417,332.01
2.5 Tab: Schedules¶
Heading: "Statutory Remittance Schedules" Subtitle: "Download and upload schedules to the relevant portals. Schedules are generated automatically from each approved payroll run."
Each approved payroll run appears as a collapsible card. Expanding it shows four statutory schedules:
1. PAYE Schedule¶
| Field | Value (test business, March 2026) |
|---|---|
| Amount | ₦70,267.99 |
| Authority | Lagos State Internal Revenue Service |
| Due | 10th of following month |
| Export | Export Excel |
| Portal link | Go to LIRS eTax |
2. Pension Schedule¶
| Field | Value |
|---|---|
| Amount | ₦95,400.00 |
| Breakdown | Employee 8% + Employer 10% = 18% BHT |
| Due | 7 working days after salary payment |
| Export | Export CSV (PenPay) |
| Portal link | Go to PenPay |
3. NHF Schedule (National Housing Fund)¶
| Field | Value |
|---|---|
| Amount | ₦0.00 |
| Authority | Federal Mortgage Bank of Nigeria |
| Due | Within 1 month |
| Penalty | ₦50,000 for non-compliance |
| Export | Export Excel (FMBN) — disabled if no NHF-enrolled employees |
| Portal link | Go to FMBN iBank |
| Note | "No NHF-enrolled employees. Enable NHF in the Employees tab." |
4. NHIS Schedule (National Health Insurance)¶
| Field | Value |
|---|---|
| Amount | ₦0.00 |
| Breakdown | Employee + Employer contributions to HMO |
| Due | Submit to your registered HMO monthly |
| Export | Export CSV — disabled if no NHIS-enrolled employees |
| Note | "No NHIS-enrolled employees. Enable NHIS in the Employees tab." |
3. Business rules & constraints¶
| Rule | Detail |
|---|---|
| Payroll auto-posts to GL | Approved payroll runs automatically create journal entries — no separate salary expenses needed |
| PAYE is employee-level | PAYE is calculated per employee based on graduated tax bands; the return aggregates all employees |
| Generate Return requires employees | The Generate Return button is disabled until at least one active employee exists |
| State-specific filing | PAYE returns are filed with the SIRS of the state where employees work — Lagos shows "LIRS eTax" link |
| Pension = Employee 8% + Employer 10% | Based on Basic, Housing, Transport (BHT) components; 18% total |
| NHF and NHIS are opt-in | These schedules only populate when employees have NHF/NHIS enabled in their employee records |
| Payroll run statuses | Draft → Approved → Posted to GL → Paid |
| Mark as Filed is self-service | After filing with SIRS (manually or via eTax), click Mark as Filed to update the status |
| File for Me routes to Filing Services | Managed PAYE filing costs ₦9,500 + 7.5% VAT |
4. Nigerian regulatory context¶
PAYE (Pay As You Earn)¶
- What it is: Income tax withheld from employees' salaries by the employer and remitted to the State Internal Revenue Service (SIRS)
- Due date: 10th of the month following the payroll period
- Authority: SIRS (not NRS) — Lagos pays to LIRS, Abuja to FCTA IRS, Rivers to RIRS, etc.
- Penalty: Late remittance attracts penalties; directors can be personally liable for wilful non-remittance under the Personal Income Tax Act
PAYE tax bands (NTA 2025)¶
| Annual Income Band | Rate |
|---|---|
| First ₦300,000 | 0% |
| Next ₦300,000 (₦300K–₦600K) | 7% |
| Next ₦500,000 (₦600K–₦1.1M) | 11% |
| Next ₦500,000 (₦1.1M–₦1.6M) | 15% |
| Next ₦1,600,000 (₦1.6M–₦3.2M) | 19% |
| Above ₦3,200,000 | 24% |
Finora calculates PAYE automatically from each employee's gross salary using these graduated bands, after deducting statutory reliefs (Consolidated Relief Allowance of ₦200K + 20% of gross income, pension contributions, NHF, NHIS).
Pension (Contributory Pension Scheme)¶
- Employee: 8% of BHT (Basic + Housing + Transport)
- Employer: 10% of BHT (minimum)
- Authority: Remitted to the employee's Pension Fund Administrator (PFA) via PenPay or direct
- Due: 7 working days after salary payment
NHF (National Housing Fund)¶
- Rate: 2.5% of basic salary
- Authority: Federal Mortgage Bank of Nigeria (FMBN)
- Due: Within 1 month of deduction
- Penalty: ₦50,000 for non-compliance
- Applies to: Employees earning ₦3,000+ per annum (virtually all employees)
NHIS (National Health Insurance Scheme)¶
- Contribution: Employee + Employer contributions (rates vary by HMO plan)
- Authority: Submitted to the employer's registered Health Maintenance Organisation (HMO)
- Due: Monthly
5. Common customer questions¶
Q: "I added an employee but the Generate Return button is still disabled."
Ensure the employee status is set to "active." Inactive employees don't count for return generation. Also verify the employee has a valid gross salary entered.
Q: "My payroll run shows 'Posted to GL'. What does that mean?"
It means the salary expenses, PAYE liability, pension liability, and net pay have all been automatically recorded in your Chart of Accounts as journal entries. You do NOT need to manually record salary expenses — the payroll module handles it.
Q: "Where do I file the PAYE return?"
Three options: (1) Export the Excel schedule and upload it to your state's eTax portal (e.g., LIRS eTax for Lagos), (2) Use the "File for Me" button for managed filing via Finora's team, or (3) file manually at the SIRS office.
Q: "The Pension Schedule shows ₦95,400. How is that calculated?"
Pension is calculated as 18% of the employee's BHT (Basic + Housing + Transport): Employee contributes 8%, Employer contributes 10%. For the test employee with ₦530,000 gross: BHT component = ₦530,000, Pension = 18% × ₦530,000 = ₦95,400.
Q: "NHF and NHIS show ₦0. Is that an error?"
No — NHF and NHIS are opt-in per employee. Go to the Employees tab, edit the employee, and enable NHF and/or NHIS. Once enabled, the schedules will populate automatically on the next payroll run.
Q: "I'm a small company (under ₦50M turnover). Do I still need to file PAYE?"
Yes — PAYE exemption does not exist for small companies. Being a small company exempts you from CIT, CGT, and Development Levy, but NOT from PAYE. If you have employees, you must withhold and remit PAYE regardless of your company size.
6. Known edge cases¶
Generate Return disabled despite having employees¶
The test business has 1 employee (Amara Okonkwo) and 1 payroll run, but the Generate Return button on the PAYE Returns tab shows as disabled with the message "No Active Employees." This appears when the employee count loaded asynchronously hasn't resolved yet — refreshing the page or switching tabs usually resolves it. If persistent, escalate to Tier 3.
Pension amount vs employee-only pension¶
The Payroll Runs table shows "Pension: ₦42,400" (employee portion only — 8% of BHT), while the Schedules tab shows "Pension: ₦95,400" (combined employee 8% + employer 10%). Both are correct — they represent different views of the same obligation.
LIRS eTax portal link¶
The Schedules tab links directly to https://etax.lirs.net/ for Lagos businesses. Other states will show their respective SIRS portal URLs. If a business operates in multiple states, PAYE returns must be filed separately per state.
Payroll auto-posting to GL¶
When a payroll run is approved, Finora creates journal entries automatically. If a customer also manually creates salary expense entries, there will be double-counting. The info banner warns about this, but some customers miss it.
7. Escalation trigger¶
Escalate to Tier 3 (Founder) if: - PAYE calculation appears incorrect for an employee - Payroll GL posting created incorrect journal entries - Generate Return button permanently disabled despite active employees
Escalate to Tier 2 (Support Lead) if: - Customer needs help setting up NHF/NHIS for employees - Customer filed PAYE late and needs penalty calculation guidance - Customer needs to bulk-import employees from another payroll system - Customer operates in multiple states and needs multi-state PAYE guidance - Customer accidentally created duplicate salary expenses alongside payroll runs
8. Last reviewed¶
2026-04-01 — Nnamdi. Verified against production. PAYE Returns page for COA Test School Academy, Year 2026. PAYE Returns tab: Total Returns 1 / Filed 0 / Pending 1 / Total PAYE ₦70,267.99. One return: Mar 2026 / Draft / Lagos / PAYE-2026-03 / 1 employee / ₦70,267.99 / Due Apr 10, 2026. Action buttons: View, Export Excel, File for Me, Mark as Filed, Delete Draft Return. Generate Return disabled ("No Active Employees" message despite 1 employee). Employees tab: 1 employee — Amara Okonkwo / Head Teacher / N-512345 / Basic ₦300,000 / Gross ₦530,000 / PAYE ₦70,267.99 / Net ₦417,332.01 / active. Bulk Import + Add Employee buttons. Payroll Runs tab: 1 run — March 2026 / Posted to GL / 1 employee / Gross ₦530,000 / PAYE ₦70,267.99 / Pension ₦42,400 / Net ₦417,332.01. Create Payroll Run button. Schedules tab: March 2026 Payroll expanded showing 4 schedules: PAYE ₦70,267.99 (LIRS, due 10th), Pension ₦95,400 (PenPay, 7 working days), NHF ₦0 (FMBN, disabled), NHIS ₦0 (HMO, disabled). Portal links confirmed: etax.lirs.net, penpay.com.ng, ibank.fmbn.gov.ng.