Abstract Density functional theory (DFT) calculations have been used to study the oxidative addition of aryl halides to complexes of the type [Ni(PMe n Ph (3− n ) ) 4 ], revealing the crucial role of an open‐shell singlet transition state for halide abstraction. The formation of Ni I versus Ni II has been rationalised through the study of three different pathways: (i) halide abstraction by [Ni(PMe n Ph (3− n ) ) 3 ], via an open‐shell singlet transition state; (ii) S N 2‐type oxidative addition to [Ni(PMe n Ph (3− n ) ) 3 ], followed by phosphine dissociation; and (iii) oxidative addition to [Ni(PMe n Ph (3− n ) ) 2 ]. For the overall reaction between [Ni(PMe 3 ) 4 ], PhCl, and PhI, a microkinetic model was used to show that our results are consistent with the experimentally observed ratios of Ni I and Ni II when the PEt 3 complex is used. Importantly, [Ni(PMe n Ph (3− n ) ) 2 ] complexes often have little, if any, role in oxidative addition reactions because they are relatively high in energy. The behaviour of [Ni(PR 3 ) 4 ] complexes in catalysis is therefore likely to differ considerably from those based on diphosphine ligands in which two coordinate Ni 0 complexes are the key species undergoing oxidative addition.