Multi-company payroll in Nigeria under NTA 2025: 2026 guide

If you run a Nigerian holding company with two, three, or six subsidiaries — say a property arm, a software arm, a logistics business, and a hospitality entity — your January 2026 payroll just got more interesting than it was in December 2025. The Nigeria Tax Act 2025, effective 1 January 2026, rewrote PAYE brackets, abolished the CRA, made NHF voluntary, and replaced four sector levies with a unified 4% Development Levy. Most of those changes are per-employee or per-employer obligations. The interesting one for a group is the Development Levy — and how it interacts with the small-company exemption, intercompany cost allocation, and the cross-company employees who sit on multiple subsidiaries' payrolls.

This guide is for Nigerian group CFOs, group HR leads, and accountants running payroll across more than one related entity. It covers what changed, what didn't, and the five mistakes most likely to surface in an NRS desk audit on the new Act.

What NTA 2025 means for a group at a glance

The Nigeria Tax Act 2025 was signed on 26 June 2025 and takes effect on 1 January 2026 for most provisions. The high-level changes that matter at the group level:

Provision	Pre-2026 (Finance Act 2020)	From 1 Jan 2026 (NTA 2025)
CIT (standard rate)	30%	30% (unchanged for non-small companies, per SHQ Legal)
TET + NITDA + NASENI + PTF	Four separate levies	Consolidated into 4% Development Levy on assessable profits
Small company test	Turnover ≤ ₦25M (FA2020)	Turnover ≤ ₦100M AND fixed assets ≤ ₦250M (Baker Tilly, Afriwise)
Small company CIT	Exempt at threshold	0% CIT, 0% CGT, 0% Development Levy
PAYE brackets	7/11/15/19/21/24% with CRA	0/15/18/21/23/25% with Rent Relief, no CRA
NHF (private)	Mandatory 2.5% basic	Voluntary opt-in
CGT (corporate)	10%	30% (per SHQ Legal; aligned with standard CIT)
VAT input recovery	Goods only	Goods + services + capital assets

For a group, the Development Levy and the small-company test are the two provisions you cannot avoid thinking about. Everything else stacks on the per-employee or per-entity logic you were already running — just with new numbers.

1. The 4% Development Levy — what it actually consolidates

The pre-2026 stack of earmarked levies on company profits was four separate calculations: Tertiary Education Tax (TET), the NITDA levy, the NASENI levy, and the Police Trust Fund levy. Each had its own base, its own rate, its own filing channel, and its own deadline. The aggregate was painful for accountants and impossible to audit cleanly.

NTA 2025 collapses all four into a single 4% of assessable profits Development Levy. Per the SHQ Legal analysis, the 4% is then redistributed internally across eight beneficiary funds — TETFUND (50%), Nigerian Education Loan Fund (15%), NITDEF (8%), NASENI (8%), and others — but the taxpayer pays 4%, files once, and remits once.

For a group with three operating subsidiaries pre-2026, you ran four levy calculations × three subs = 12 separate filings every year. From 2026, that becomes one Development Levy filing per subsidiary — a real operational simplification that no profile-pack-driven payroll system should require you to manage manually.

Worked example. ABC Group has three subsidiaries: Aurora Properties Ltd (₦240M assessable profit 2026), Bolt Logistics Ltd (₦80M assessable profit), and Crystal Software Ltd (₦12M assessable profit).

• Aurora: 4% × ₦240M = ₦9,600,000
• Bolt: 4% × ₦80M = ₦3,200,000
• Crystal: 4% × ₦12M = ₦480,000 (but see small-company test below — Crystal may be exempt)

Total group Development Levy: ₦13,280,000 if all three are non-small, or ₦12,800,000 if Crystal qualifies as small.

The mechanics are unforgiving: you cannot net Aurora's profit against Bolt's loss for the levy. Each company's assessable profit is computed and levied separately.

2. The small-company test — applied per entity, not per group

This is the question that surfaces the most in our Nigerian group payroll conversations: "If our group as a whole turns over ₦600M, are any of our subsidiaries still small?"

Per Afriwise's 2025 review: "The NTA defines a small company as a company with an annual turnover not exceeding ₦100 million and total fixed assets not exceeding ₦250 million." The small-company test is per legal entity, not aggregated at the group level. A subsidiary with ₦80M turnover and ₦150M fixed assets remains a small company even if its parent group turns over ₦5B.

That's a real tax-planning lever. Three concrete implications:

a) The small-company test has two arms — both must hold. Turnover ≤ ₦100M and fixed assets ≤ ₦250M. A subsidiary with ₦40M turnover but ₦400M of fixed assets fails the test. A subsidiary with ₦95M turnover but ₦100M of fixed assets passes.

b) Small subsidiaries are exempt from CIT, CGT, and Development Levy. All three. That's a meaningful overhead saving for a startup-stage subsidiary still building toward break-even.

c) Professional services firms get carved out. Per Afriwise, the small-company exemption "does not apply to professional services firms meeting the size criteria." Read: a 4-partner law firm or accounting practice doesn't get to claim small-company status even at ₦60M turnover. Check the carve-out list in the Act before assuming any specific subsidiary qualifies.

Group-level decision: Cross-charge or capitalise?

If your group has a small subsidiary at ₦95M turnover and a non-small subsidiary at ₦400M turnover, and the small one is about to cross the ₦100M threshold mid-year through inter-company billing, the timing of those intercompany invoices matters. Crossing the threshold pulls the subsidiary into the full CIT + 4% Development Levy regime for the entire year. Group treasury teams should model this when timing intercompany cross-charges around year-end.

3. Cross-company employees — the cost-allocation question NTA 2025 didn't change

Many Nigerian groups have employees who serve multiple subsidiaries — a group HR director, a shared CFO, a chief technology officer who builds for all three operating companies. Pre-2026, you handled this by allocating their salary cost across the subsidiaries based on a percentage split and posting matching expense + intercompany journals. NTA 2025 doesn't change the mechanics. It changes a few of the numbers flowing through them.

The standard pattern, unchanged from pre-2026:

1. The employee sits on one payroll legally — usually the group holding company or the largest subsidiary. PAYE, pension, NHF (if opted in), NSITF, and ITF all go through that single employer.
2. The cost is allocated across the receiving subsidiaries via an intercompany cost-allocation journal.
3. Each subsidiary recognises an intercompany expense; the employer of record recognises matching intercompany income (or a contra-expense, depending on your group accounting policy).
4. The intercompany positions eliminate in the consolidated financial statements at year-end.

What NTA 2025 did change:

• PAYE brackets are different. Same allocation, different deduction.
• The Rent Relief declaration is per employee, not per subsidiary. The cross-charged employee declares once on their primary employer's portal; the relief reduces their PAYE on the consolidated side, then flows into the allocation.
• NHF is voluntary. If the cross-charged employee opted out of NHF in their self-service portal, the 2.5% basic salary deduction stops; the allocation downstream drops by the same amount. Fine in practice — the cost-share simply shifts.
• Development Levy is on the company's profit, not the payroll. Cross-charging payroll cost between subsidiaries doesn't directly affect any subsidiary's Development Levy liability. It affects the assessable profit, which is then levied.

The invariant: employee cost allocation percentages must always sum to exactly 100%. A 35/40/25 split. A 50/50 split. A 60/30/10 split. Never 99% or 101%. Whatever payroll system you run, the cost-allocation table needs a hard validator at the database layer or you'll find out at audit when the subsidiary expense lines don't reconcile back to the group payroll register.

4. Group filing — what NTA 2025 did and didn't introduce

A common misconception about NTA 2025 is that it introduced UK-style group relief or US-style consolidated returns. It did not.

Per the analyses on SHQ Legal, Baker Tilly, and PwC's NTA 2025 publication, each Nigerian company in a group still files its own corporate income tax return, its own Development Levy return, its own VAT return, and its own PAYE schedule under its own TIN. There is no Nigerian "consolidated CIT return" mechanism. Losses in one subsidiary cannot be offset against profits in another. Each entity's small-company test is computed standalone.

What NTA 2025 did introduce, that matters for groups:

• Top-up tax on foreign subsidiaries below 15% effective rate. Per the EY 2025 NTA highlights, Nigerian parents with foreign subsidiaries paying tax below an effective 15% rate face a top-up to the difference. This is part of Nigeria's response to the OECD Pillar 2 framework. If your group has Ghanaian, Kenyan, or Mauritian subsidiaries, model the top-up exposure before year-end.
• CFC rules. Controlled Foreign Company rules tax undistributed profits of foreign entities controlled by Nigerian companies. Same direction: groups with offshore subsidiaries need to look at retained earnings, not just dividends.
• Expanded interest deduction restrictions. Per EY, interest deduction restrictions now apply to all connected parties, not just foreign-connected. Intercompany loans between Nigerian subsidiaries are now in scope — model the impact on the group's blended effective tax rate.

The practical implication: NTA 2025 makes the per-entity filing posture stricter, not looser. Tighter rules on related-party interest, cross-border profit shifting, and small-company carve-outs all push groups toward better per-subsidiary record-keeping, not toward consolidated convenience.

5. Pulling it together — the 2026 group payroll calendar

Here's what the typical Nigerian group's January-February 2026 payroll calendar should look like:

Date	Event	Per entity	Group-level rollup
20 Jan 2026	First January payroll cycle close	Each subsidiary runs its own payroll under NTA 2025 brackets	Group HR collects all payslips for review
By 31 Jan 2026	Rent Relief declaration window	Each cross-company employee declares once, on primary employer	Group accounting allocates the deduction across subs
By 10 Feb 2026	January PAYE remittance	Each subsidiary remits to NRS under its own TIN	Group treasury reconciles per-sub remittance
By 10 Feb 2026	January NSITF + pension remittance	Per subsidiary, on its own gross-pay base	Group reconciles to consolidated payroll register
By 1 April 2027	2026 ITF annual remittance (if applicable)	Per subsidiary that crossed the 5-employee or ₦50M-turnover threshold	Group consolidates ITF position
By 30 June 2027	2026 CIT + Development Levy filings	Each subsidiary that is not small files	Group treasury models the aggregate cash-out

Every line in that table is a per-entity obligation. The "group rollup" column is for your own management visibility — not for any single filing.

5 mistakes that trigger NRS desk audits on the new Act

Drawn from the patterns we and our partner accountants are already seeing in early 2026:

1. Applying the small-company exemption at group level. A holding with three operating subsidiaries cannot claim "small" status because two of the three subsidiaries are below threshold. Each is tested standalone. Aggregating them up to "group is below ₦100M" and skipping the levy is the fastest way to invite an NRS audit on Q2 2026.
2. Computing Development Levy on payroll instead of profits. The base is assessable profits, not payroll. A surprisingly common spreadsheet error: treating the 4% as another payroll-side levy alongside NSITF and ITF. It's not. It belongs on the corporate tax computation, after the CIT calculation.
3. Forgetting the professional-services carve-out. A 4-partner law firm or accounting practice with ₦80M turnover doesn't qualify as small under NTA 2025. Apply the test, then check the Afriwise carve-out list before claiming the exemption.
4. Cross-allocating Rent Relief instead of letting it flow with the employee. A group HR director declaring ₦8M annual rent should generate ₦500K of Rent Relief on their PAYE — capped per the Act. The relief reduces their PAYE, allocated downstream proportionally; subsidiaries should not declare rent independently for the same employee. Doing so duplicates the relief and triggers a clawback at audit.
5. Mixing pre- and post-2026 PAYE rates in December 2025 close. December 2025 is a Finance Act 2020 month — old brackets, CRA still applicable, no Rent Relief, NHF mandatory. January 2026 is NTA 2025 — new brackets, no CRA, Rent Relief available, NHF voluntary. Date-routing must be automatic. Any system that requires you to "switch the tax act flag" before running January 2026 payroll is one human-error away from a December close that mis-applies 2026 rules.

The audit-readiness posture for groups

If you take only one operational change from the move to NTA 2025, make it this: store the tax profile hash on every payslip and journal entry, per subsidiary. The hash records exactly which version of the Act, brackets, and levy structure was applied to that specific calculation. When NRS opens a Q2 2026 audit and asks "prove you applied the correct PAYE rate to this payslip", the answer is a hash you can match to the published profile pack in seconds.

Across a group, this is critical because the audit population is multiplied. Three subsidiaries × 12 months × ~30 employees = roughly 1,080 payslips per year. Without per-payslip profile hashes, audit defence is a manual spelunking exercise. With them, it's a SQL query.

Does AnooreHR handle this?

Yes — AnooreHR is built around exactly this scenario. Group hierarchy with multiple subsidiaries, profile-pack-driven Nigerian tax computation (Finance Act 2020 + NTA 2025, date-routed per payroll period), employee cost allocation across companies (with the 100% sum invariant enforced at the database), intercompany journal auto-generation, per-subsidiary CIT + Development Levy computation, and tax profile hashes stored on every payslip and journal entry. Small-company test is computed per entity, not per group.

If you operate two or more Nigerian companies and you're trying to figure out the right operating posture under NTA 2025 — book a quick demo. Bring your group structure (entities, payroll headcount, intercompany flows) and we'll model your January 2026 payroll across all subsidiaries live.

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Related reading: How to compute PAYE in Nigeria under NTA 2025 · Nigerian pension contributions in 2026 · NHF is now voluntary under NTA 2025 · NSITF + ITF employer obligations