Annual PAYE Returns (Form H1) in Nigeria: Filing Guide

Every employer who deducts Pay-As-You-Earn (PAYE) tax must file an annual return summarizing the year's payroll tax activities. In Nigeria, this is done using Form H1, submitted to the relevant State Internal Revenue Service (SIRS). This guide explains how to complete and file your annual PAYE returns.

What is Form H1?

Overview

Form H1 is the Annual PAYE Return that:

• Summarizes all employee earnings for the year
• Reports total PAYE deducted
• Reconciles with monthly remittances
• Is filed with State Internal Revenue Service

Purpose

Purpose	Description
Reconciliation	Matches monthly remittances to annual totals
Compliance	Demonstrates employer tax obligations met
Employee records	Provides individual tax information
Reference	Basis for Tax Clearance Certificates

Filing Deadline

Standard Deadline

Form H1 must be filed by January 31st of the year following the tax year.

Tax Year	Filing Deadline
2024	January 31, 2025
2025	January 31, 2026

Late Filing Consequences

Consequence	Impact
Penalties	Monetary fines
Interest	On any underpayment
Compliance issues	Problems with Tax Clearance
Audit risk	Increased scrutiny

Who Must File?

Filing Requirements

Employer Type	Form H1 Required?
Companies with employees	Yes
Government agencies	Yes
NGOs with paid staff	Yes
Sole proprietors with employees	Yes
Individuals (personal domestic staff)	May be required

Filing Location

File with the State Internal Revenue Service where employees are resident:

• Lagos State → LIRS
• FCT → FCT-IRS
• Rivers State → RIRS
• Other states → Respective SIRS

If employees are in multiple states, file separate returns with each state.

Form H1 Components

Section A: Employer Information

Field	Information Required
Company name	Legal registered name
RC number	Company registration number
TIN	Tax Identification Number
Address	Business address
Contact	Phone and email
Industry	Business sector
Number of employees	Total and per state

Section B: Employee Schedule

For each employee:

Field	Information
S/N	Serial number
Employee name	Full name
TIN	Employee's TIN (if available)
Position	Job title
Annual gross emoluments	Total pay for year
Tax-free allowances	Exempt items
Gross taxable emoluments	Taxable amount
Relief and allowances	CRA, pension, etc.
Taxable income	After deductions
Tax payable	PAYE calculated
Tax deducted	Actual PAYE withheld
Remarks	Notes (new, left, etc.)

Section C: Summary

Item	Amount
Total annual emoluments	Sum of all employees
Total tax deductible	Calculated tax
Total tax deducted	Actual deductions
Total tax remitted	Payments to SIRS
Variance (if any)	Under/over remittance

Step-by-Step Filing Process

Step 1: Gather Data

Compile for each employee:

• Monthly gross earnings (all 12 months)
• All allowances and benefits
• Deductions made (pension, NHF, NHIS)
• PAYE deducted each month

Step 2: Calculate Annual Figures

For each employee:

Calculation	Method
Annual gross	Sum of 12 months' gross
Annual deductions	Sum of pension, NHF, etc.
Annual PAYE	Sum of monthly PAYE

Step 3: Reconcile with Monthly Remittances

Compare:

Item	Calculated	Remitted	Variance
January PAYE	₦X	₦X	₦0
February PAYE	₦Y	₦Y	₦0
...	...	...	...
Annual Total	₦Z	₦Z	₦0

Step 4: Prepare Employee Schedule

List all employees with required details:

• Alphabetically or by department
• Include all who worked during the year
• Note those who joined or left mid-year

Step 5: Complete Form H1

Fill in all sections:

• Employer information
• Employee schedule
• Summary and totals
• Reconciliation

Step 6: Attach Supporting Documents

Document	Purpose
Monthly remittance receipts	Proof of payment
Employee list	Verification
Tax computation schedules	Supporting detail

Step 7: Submit to SIRS

Method	Process
Physical submission	Visit SIRS office
Online filing	Via state tax portal (where available)
Through tax consultant	Authorized representative

Step 8: Obtain Acknowledgment

Get proof of filing:

• Stamped copy of return
• Receipt/acknowledgment number
• Keep for records

Handling Special Situations

New Employees (Joined Mid-Year)

Detail	Treatment
Annual earnings	Actual earnings (not full year)
PAYE	Tax on actual earnings
Notation	Mark as "Joined [Month]"

Employees Who Left

Detail	Treatment
Annual earnings	Earnings until departure
PAYE	Tax deducted until departure
Notation	Mark as "Left [Month]"
Form P9	Issue on departure

Employees in Multiple States

If an employee relocated:

• Prorate to each state based on residence period
• File with both states
• Provide supporting explanation

Variance/Discrepancy

If remittances don't match calculations:

Situation	Action
Under-remitted	Pay difference with return
Over-remitted	Claim credit or refund
Calculation error	Correct and explain

Form P9: Tax Deduction Cards

What is Form P9?

Individual tax certificate for each employee showing:

• Annual earnings
• Deductions
• Tax paid

When to Issue

• With Form H1 filing
• When employee leaves
• On employee request

P9 Uses for Employees

Use	Purpose
Tax Clearance	Supporting document
New employer	Transfer of tax records
Personal records	Proof of tax paid
Bank applications	Income verification

Common Filing Errors

Error 1: Missing Employees

Problem: Not including all employees in return

Impact: Incomplete filing, potential penalties

Fix: Cross-check payroll records thoroughly

Error 2: Wrong TIN

Problem: Incorrect or missing employee TIN

Impact: Cannot match to employee's tax records

Fix: Verify TINs before filing

Error 3: Arithmetic Errors

Problem: Totals don't add up

Impact: Filing rejected or queried

Fix: Use software to ensure accuracy

Error 4: Late Filing

Problem: Filing after January 31

Impact: Penalties

Fix: Start preparation in early January

Error 5: Wrong State

Problem: Filing with wrong State IRS

Impact: Employee credits not recorded

Fix: Verify employee residence states

How Finora Prepares Form H1

Automatic Compilation

At year-end, Finora:

• Compiles all payroll data
• Calculates annual totals per employee
• Reconciles with monthly records

Employee Schedule Generation

Produces required schedule with:

• All employee details
• Annual earnings and deductions
• PAYE calculated and deducted
• Proper format for SIRS

Reconciliation Report

Shows:

• Monthly PAYE deducted
• Monthly PAYE remitted
• Variances (if any)
• Year-end position

P9 Generation

For each employee:

• Individual tax certificate
• Annual summary
• Ready to issue

Multi-State Handling

If employees in multiple states:

• Separate schedules per state
• Appropriate allocations
• Multiple Form H1 generation

Frequently Asked Questions

What if I don't have an employee's TIN?

Leave blank with notation. However, encourage employees to obtain TINs as this can affect their Tax Clearance Certificates.

Can I file Form H1 online?

Some states (like Lagos) offer online filing. Check with your State IRS for available options.

What if we have zero PAYE (no tax deducted)?

You should still file a nil return if you have employees, even if no tax was due (e.g., all employees below tax threshold).

How long should I keep Form H1 records?

Minimum 6 years. Keep copies of filed returns and all supporting documents.

What about employees who joined in December?

Include them with their December earnings. Mark as "Joined December" in remarks.

Deadlines Reminder

Activity	Deadline
Gather all 2024 payroll data	Early January
Prepare employee schedule	Mid-January
Reconcile with remittances	Mid-January
Complete Form H1	Late January
File with SIRS	January 31

Conclusion

Annual PAYE returns (Form H1) are a critical compliance obligation:

• File by January 31 each year
• Include all employees who worked during the year
• Reconcile with monthly remittances
• Issue P9 certificates to employees

Accurate Form H1 filing ensures your employees' tax records are correct and supports their Tax Clearance Certificate applications.

Finora automates Form H1 preparation—compiling year-end data, generating employee schedules, and preparing state-specific returns.

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