Payroll Tax Analysis Case Study

Project Overview

This project simulates a real-world payroll and tax compliance engagement where a Data Analyst is tasked with redesigning a legacy Excel-based PAYE system to align with the Nigeria Personal Income Tax Reform Act 2025.

The organisation currently relies on a fragile payroll workbook with hard-coded tax rates, complex nested IF formulas, and limited audit transparency. As tax rules evolve, the model frequently breaks, creating compliance risks and operational inefficiencies.

Using Microsoft Excel, this project focuses on building a flexible, auditable, and scalable PAYE analysis model that supports accurate tax computation for 1 to 1,000 employees, while enabling HR, Finance, and Management teams to clearly understand payroll tax outcomes under the 2025 tax regime.

The final deliverable is a robust Excel-based PAYE model designed with structured tax tables, clear logic separation, and business-level reporting that can be reviewed confidently by auditors and adapted easily when tax laws change.

Business Objective

The purpose of this project is to support payroll accuracy, regulatory compliance, and financial transparency by answering key business questions such as:

Are employee PAYE deductions correctly calculated under the 2025 tax bands?

How do changes in tax law impact employee net pay and total payroll cost?

Can the payroll model adapt quickly to future tax reforms without rewriting formulas?

Is the PAYE computation logic clear, traceable, and auditable?

Target Audience

HR & Payroll Teams
Finance & Accounting Teams
Internal & External Auditors
Senior Management & Business Owners

Decisions Enabled

Assessment of payroll cost impact under the 2025 tax reform
Improved tax compliance and audit readiness
Faster updates when tax rates or bands change
Standardisation of payroll logic across the organisation
Risk reduction from manual errors and broken formulas

Dataset

The dataset used in this project represents a simulated employee payroll register, including:

Employee earnings and allowances
Taxable income components
PAYE tax bands and rates (2025 structure)
Employee-level and summary payroll outputs