How Finora Calculates Payroll Taxes: Complete Feature Guide

Managing payroll taxes in Nigeria involves multiple calculations: PAYE using graduated tax tables, pension contributions to various PFAs, NHF to FMBN, and potentially NHIS to HMOs. Doing this manually is time-consuming and error-prone. Finora automates every aspect of payroll tax compliance.

The Payroll Tax Challenge

Nigerian employers face complex payroll requirements:

Challenge	Impact
Multiple tax calculations	PAYE, pension, NHF, NHIS
Varying rates and rules	Different formulas for each
Frequent changes	Tax tables and rates update
Multiple remittances	Different agencies for each deduction
Compliance documentation	Payslips, returns, certificates
Employee variations	Different states, PFAs, situations

Finora addresses every challenge with intelligent automation.

Automatic PAYE Calculation

Nigerian Tax Tables Built In

Finora includes current tax tables:

• Graduated rates (7% to 24%)
• Consolidated Relief Allowance (CRA)
• Minimum tax calculation
• All reliefs and allowances

The Calculation Process

When you run payroll:

1. System totals gross income from all components
2. Applies CRA (₦200,000 + 20% of gross)
3. Deducts pension contribution (8%)
4. Deducts NHF (2.5% of basic)
5. Calculates taxable income
6. Applies tax bands
7. Checks minimum tax
8. Determines final PAYE

Example Calculation

Step	Description	Amount
1	Gross monthly income	₦800,000
2	Annual gross	₦9,600,000
3	Less: CRA	(₦2,120,000)
4	Less: Pension (8%)	(₦672,000)
5	Less: NHF	(₦120,000)
6	Taxable income	₦6,688,000
7	PAYE calculated	₦1,397,120
8	Monthly PAYE	₦116,427

All automatic. No manual tax table lookups.

Pension Contribution Management

Dual Contribution Tracking

Finora calculates both portions:

Contributor	Rate	Tracking
Employee	8%	Deducted from salary
Employer	10%	Company expense
Total	18%	To employee's RSA

PFA Management

Handle multiple PFAs:

• Store each employee's PFA and RSA PIN
• Route contributions correctly
• Generate PFA-specific schedules
• Track remittances by PFA

Emoluments Configuration

Define what's pensionable:

• Basic salary ✓
• Housing allowance ✓
• Transport allowance ✓
• Other (configurable)

NHF Calculation

Automatic 2.5% Computation

Finora calculates NHF on basic salary:

Employee	Basic Salary	NHF (2.5%)
A	₦400,000	₦10,000
B	₦250,000	₦6,250
C	₦150,000	₦3,750
Total	₦20,000

FMBN Remittance Support

Generate FMBN-ready reports:

• Contribution schedule
• Total remittance amount
• Employee details required

NHIS Integration

Health Insurance Calculations

If participating in NHIS:

Contributor	Rate	Amount
Employee	5%	Deducted
Employer	10%	Company expense

HMO Reporting

Generate reports for your HMO:

• Monthly contribution summary
• Employee enrollment details
• Remittance schedules

Multi-State PAYE Handling

Employee Residence Tracking

Track where each employee is resident:

• Lagos employees → LIRS
• FCT employees → FCT-IRS
• Other states → Respective SIRS

State-Specific Reports

Generate separate reports by state:

• Monthly PAYE per state
• Employee schedules per state
• Remittance advice per state

Annual Returns by State

Form H1 preparation handles multi-state:

• Separate employee listings
• State-specific totals
• Multiple returns generated

Payslip Generation

Professional Payslips

Every payroll run produces payslips:

Included automatically:

• Employee details
• All earnings itemized
• All deductions itemized
• Net pay calculation
• YTD figures
• Payment information

Delivery Options

Method	Feature
Email	Auto-send to employees
PDF download	Bulk or individual
Employee portal	Self-service access
Print	For physical distribution

Customization

Element	Options
Company branding	Logo and colors
Layout	Multiple templates
Content	Show/hide sections
Format	Language, currency format

Remittance Tracking

Multiple Agencies

Track payments to each agency:

• PAYE to State IRS
• Pension to PFAs
• NHF to FMBN
• NHIS to HMO

Payment Recording

For each remittance:

• Amount paid
• Date of payment
• Reference/receipt number
• Period covered

Reconciliation

Compare deductions to remittances:

• Identify discrepancies
• Ensure all amounts remitted
• Ready for audit

Annual Returns Automation

Form H1 Preparation

At year-end, Finora:

• Compiles all payroll data
• Calculates annual totals
• Generates employee schedules
• Produces state-specific returns

Supporting Schedules

Automatic generation of:

• Annual earnings per employee
• Tax deducted summary
• Remittance reconciliation
• Variance analysis

P9 Certificates

Generate for each employee:

• Individual tax certificate
• Annual summary
• Ready for distribution

Employee Self-Service

Payslip Access

Employees can:

• View current and past payslips
• Download PDF copies
• See YTD summaries

Tax Information

Employees see:

• PAYE deducted
• Pension contributions
• Other deductions
• Cumulative figures

Compliance Dashboard

Real-Time Status

See at a glance:

Metric	Display
Payroll processed	Current month status
PAYE remitted	Per state
Pension remitted	Per PFA
NHF remitted	FMBN status
Deadlines	Upcoming dates

Alerts and Reminders

Notifications for:

• Payroll processing due
• Remittance deadlines
• Annual return deadline
• Missing information

Getting Started

Step 1: Company Setup

Configure your company:

• Business details
• Tax registration numbers
• Default settings

Step 2: Employee Onboarding

Add employees with:

• Personal details
• Salary components
• Tax information (TIN, state)
• PFA details (RSA PIN)
• Bank details

Step 3: Configure Payroll

Set up:

• Pay period (monthly)
• Earnings components
• Deduction rules
• Approval workflow

Step 4: Process Payroll

Each month:

1. Review employee data
2. Add variable items (overtime, bonus)
3. Run calculations
4. Review and approve
5. Process payment
6. Distribute payslips

Step 5: Remit Deductions

Generate remittance schedules:

• PAYE by state
• Pension by PFA
• NHF schedule
• Make payments and record

Integrations

Bank Payments

Feature	Capability
Salary payments	Bulk transfer files
Bank formats	Various bank formats supported
Reconciliation	Match payments to payroll

Accounting Integration

Payroll flows to accounting:

• Salary expense recorded
• Liabilities posted
• Payment cleared
• General ledger updated

Security

Data Protection

• Employee data encrypted
• Access controls
• Audit trail
• NDPR compliance

Access Management

Role-based access:

• Payroll processor
• Approver
• HR viewer
• Employee (self-service)

Real Results

Finora payroll users report:

Metric	Improvement
Payroll processing time	70% reduction
Calculation errors	Near elimination
Compliance issues	Significantly reduced
Employee queries	Fewer due to transparency

Frequently Asked Questions

Can I handle mid-month changes?

Yes. Add or change employees any time. Finora prorates calculations for partial months.

What about different salary structures?

Configure any salary structure. Mix of fixed and variable components supported.

Can I run payroll for multiple companies?

Yes. Multi-company support available. Separate or consolidated processing.

How do I handle bonuses?

Add as variable pay item. Finora includes in PAYE calculation appropriately.

Is historical data migration possible?

Yes. Import past payroll data for complete records and accurate YTD calculations.

Conclusion

Finora transforms payroll tax management:

• Automatic PAYE calculation with current tax tables
• Pension contribution tracking for all PFAs
• NHF and NHIS calculations included
• Multi-state handling for diverse workforces
• Professional payslips every pay period
• Annual returns prepared automatically

No more spreadsheets, manual calculations, or compliance anxiety. Finora handles the complexity so you can focus on your people.

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