Mastering Payroll in Nigeria: A Practical Guide for HR Professionals
Payroll is one of the most critical responsibilities of any HR department. Beyond ensuring employees are paid accurately and on time, payroll also involves strict compliance with statutory deductions like PAYE, NHF, NSITF, ITF, and Pension contributions . Failure to comply can lead to penalties, employee dissatisfaction, and reputational damage for the organization. So, how do you manage payroll effectively while keeping everything in line with Nigerian labor laws? Let’s break it down. 1. Collect and Verify Data The first step in payroll is gathering accurate employee information: attendance, overtime, allowances, deductions, and benefits. Errors at this stage lead to bigger issues down the line, so cross-checking with line managers is essential. 2. Calculate Salaries and Deductions Once gross salaries are determined, apply statutory deductions: PAYE (Pay As You Earn): Income tax deducted from employees’ monthly salary. Pension: Minimum 8% employee + 10% employer contribution. ...
