Your Employer Deducts PAYE. You Still Have to File.

The gap nobody told you about

If you are on a salary, your employer works out your PAYE, takes it out before payday, and sends it to the tax authority. You never touch it. For most Nigerians in formal employment, that has been the whole of their relationship with tax.

So the reasonable assumption is: my employer handles my tax, therefore I have nothing to do.

The first half is true. The second half is not.

Paying tax and filing a return are two different obligations. Your employer discharges the first one for you. The second one is yours, it is annual, and under the reforms it now applies whether or not you owe anything.

What actually changed

Under the new regime, filing an annual return is expected of taxable persons generally — not only of people with a balance to settle.

That includes the case that surprises people most: if you owe nothing, you file a return saying so. It is usually called a nil return — a declaration that your position for the year is zero.

It feels pointless if you have never done it. It is not. The return is what puts your year on record. Without one there is no filed position for that year, only an absence — and an absence is what a tax authority has to ask you about later.

"But my employer files something"

They do, and it is not the same document.

Your employer files an annual employer return covering the PAYE it deducted from its staff — a schedule of what it withheld and remitted, filed as an employer. That is their obligation about their payroll.

Your return is about you, and it can contain things your employer's payroll never sees:

• Rent you pay, which carries a relief
• Income from anywhere other than that job
• Pension, NHF or NHIS contributions you make outside the payroll
• Any tax already withheld from you by someone else

If any of those exist, your employer's figures are not the full picture of your year. If none of them do, your return is short and quick — but it is still yours to file.

The deduction most salary earners never claim

Here is the part worth ten minutes of anyone's attention.

Under the Nigeria Tax Act 2025 you can claim rent relief: 20% of your annual rent, capped at ₦500,000^[1]. You need proof of payment, and it does not apply if you own your home and pay no rent.

Most payroll systems do not know what you pay in rent. So unless you tell someone, it is not in your figures, and you have paid tax on income the relief would have covered.

⚠️ And one correction, because old guides get this backwards. You may have read about the Consolidated Relief Allowance — "the higher of ₦200,000 or 1% of gross, plus 20% of gross". It has been abolished. Rent relief is the main personal relief now. A calculator still applying CRA is working from the old law and will show you a number that is too low.

The rates, so you can check your payslip

Progressive, which is the bit most people mishear: crossing into a band does not re-tax everything below it. Only the slice above the line is charged at that rate, so a raise never leaves you worse off.

The PAYE calculator will check your payslip against these in about a minute, and it is free with no sign-up.

The date

31 March, for the year before.

Which means the work happens in the first three months of the year, about a year after the income it covers. If your employer changed, or you had side income, or you moved house mid-year, that is the window where you need to remember it — so it is worth noting the figures while you still remember them, not in March.

Do you have side income?

This is the question that changes the answer entirely.

If you also freelance, sell something, rent out a room, or get paid in dollars for anything — your employer's PAYE covers none of that. Those amounts are yours to declare, and they sit on top of your salary when the rate is worked out.

That is a genuinely different situation from a pure salary, and it is much more common than people admit on forms. If it is you, start with tax on Upwork and foreign income and whether you need a Tax ID — the second one matters, because without a Tax ID the tax withheld from your invoices doubles.

What to do, in order

1. Check you have a Tax ID. Registration is required, and it is now tied to banking.
2. Find your rent figure and proof of payment, if you rent.
3. Add up anything your employer does not see — side income, contributions you make yourself, tax anyone else withheld from you.
4. File by 31 March, even if the answer is nil.

The honest bit

For a lot of salary earners this will be a short, boring task with an answer of zero, and it will stay that way every year. That is a perfectly good outcome — the return exists so that the zero is on record rather than assumed.

The people it genuinely matters for are the two groups who do not think of themselves as different: someone paying rent who has never claimed the relief, and someone with income their employer knows nothing about. If either is you, the ten minutes is worth real money.

Figures reflect the gazetted Nigeria Tax Act 2025 and Nigeria Tax Administration Act 2025, in force 1 January 2026, with last-verified dates shown inside the app. Tax outcomes depend on your facts — treat this as plain-English guidance, not advice, and confirm with your State IRS, the NRS, or a qualified adviser. TaxJeje is a product of Fattah Labs Ltd and is not affiliated with, or endorsed by, the Nigeria Revenue Service or any State Internal Revenue Service.