Employing in Nigeria

Nigeria’s economic potential is considerable. Home to Africa’s largest economy and biggest oil producer, the country has a growing populace of over 180 million — the largest in Africa — and an abundance of natural resources.

Although there are several ethnic tribes and dialects (Hausa, Yoruba and Igbo being three of the major groups), English is still the generally spoken language. Nigeria also has surprisingly similar business and legal practices to the UK, making it an excellent choice for UK companies looking to expand into African markets.

Thanks to one of the lowest income tax rates in the world (between 7% and 24%), there’s also a growing consumer base of Nigerians with a lot more disposable income — ideal for businesses to tap into.

Contents

Our Expertise

Managing a global workforce in Nigeria

To successfully manage a workforce in Nigeria, it's essential to stay informed about legal requirements and ensure adherence to local employment laws and regulations. TopSource Worldwide can assist businesses in effectively managing employment obligations by providing expert guidance and support on Nigerian employment law, ensuring legal compliance, and facilitating efficient payroll and HR management.

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Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

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Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

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Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 

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Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

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Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.

Employment Cost Calculator

Nigeria
British Pound
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Nigeria

British PoundNigerian Naira
Base Salary (per month)£78.11NGN 148,333.33
Local employer's costs£0.00NGN 0.00
Total Cost (Annual)£937.34NGN 1,780,000.00
Hiring in Nigeria

Please note - the above costs are an estimate, and the actual amount may differ based on a number of variables.

This estimate for Nigeria includes the minimum 10% pension contribution as per what is mandatory - the employer can opt to contribute more than this amount if they wish. This ealso includes a medium-level healthcare plan for a single individual. This may vary depending upon which health plan is selected.

Additional setup and management fees may apply.

TESTIMONIALS

Hear from our clients about our EOR solutions in Nigeria

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven
Nutreco

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar
Sungard

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor
Client based in Ft Worth, Texas, USA
GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Nigeria

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Nigeria. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Nigeria-based employees.

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End-to-end Nigeria payroll services

Looking to expand into Nigeria? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Nigeria expansion initiatives.

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Global entity management

Venturing into the Nigerian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Nigeria

Entering the Nigerian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Nigeria.

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Nigeria Insights

Key insights into Nigeria's landscape

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VAT rates: Nigeria has a Value Added Tax (VAT) rate of 7.5%, with specific exemptions and reduced rates for certain goods and services.

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Ease of Doing Business rank: As of 2021, Nigeria ranked 131st out of 190 economies.

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Consumer Confidence Index: As of the fourth quarter of 2020, Nigeria's Consumer Confidence Index was at -14.8 index points.

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Employee maternity/paternity leave: Maternity leave is typically 12 weeks, with specific provisions for nursing mothers. Paternity leave policies may not be explicitly defined by law.

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Employee termination period: The notice period for terminating an employment contract in Nigeria can vary based on the terms of the employment contract and the circumstances of the termination.

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Employee salary pay date: Payroll schedules can vary by company and employment contract. In Nigeria, it is common for employees to be paid monthly.

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Bank holidays: Nigeria observes several public holidays, including Labour Day (May 1st), Democracy Day, Eid al-Fitr, Eid al-Adha, Independence Day, and Christmas Day, with a total of around 10 public holidays in a year.

Employers Provisions

Salary Information

Salary

The minimum salary in Nigeria is 30,000 Nigerian naira per month.

Salary currency

Nigerian naira

Salary pay date

Salaries must be paid during the final week of each month.

Pension contributions

Employers with at least 15 employees are required to participate in a contributory pension scheme for their employees. The minimum contribution is 18% of monthly emolument (with a minimum contribution of 10% by the employer and 8% by the employee). If the employer decides to bear all the contribution, the minimum contribution is 20% of monthly emolument. Mandatory and/or voluntary contributions by the employers and employees are deductible for tax purposes.

National housing fund (NHF) contributions

NHF contributions are applicable to Nigerian employees earning a minimum of NGN 3,000 per annum. The employer is required to deduct 2.5% of basic salary from employees earning more than NGN 3,000 per annum and remit it to the Federal Mortgage Bank of Nigeria within one month of the deductions.

Employer costs
  • Industrial training fund levy — 1% on gross salary
  • Employees’ compensation scheme — 1% on gross salary
  • National contributory pension scheme — 10% on gross salary
PAYE
Annual income (NGN) Personal income tax (PIT) rate (%)
First 300,000 7
Next 300,000 11
Next 500,000 15
Next 500,000 19
Next 1,600,000 21
Above 3,200,000 24

Other Provisions

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Probationary & Notice periods

Probationary periods can range from zero to six months. There’s no right to extend this beyond the six months.

Notice Periods:

  • One day, if the length of service is up to three months
  • One week, if the length of service is up to two years
  • Two weeks, if the length of service is up to five years
  • One month, if the length of service is five years or more
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Working hours & Overtime

As specified under the National Minimum Wage Act, normal full-time working hours are 40 per week. However, the Labour Act does not specify general working hours, rather these are fixed by the mutual agreement or collective bargaining within the enterprise or industry.

If the worker has to work more than the fixed normal working hours, it’s considered as an overtime. There’s no statutory provision on the overtime work limit and overtime pay. Overtime compensation is entirely a matter of mutual agreement (employment contract), collective bargaining agreement or an order by the industrial wages board.

Workers can be engaged on certain tasks during the weekly rest periods and public holidays. In extraordinary circumstances, workers may perform work on weekly rest days and public holidays. In such cases, the worker is entitled to days off in lieu within 14 days of work done or a monetary compensation according to overtime rates (specified under employment contract, collective agreement or an order by industrial wages board) is paid.

Workers may be required to work on weekly rest days and public holidays. In such circumstances when an employee has to work on official holidays or weekly rest days, the employee is entitled to the payment of work done in addition to their normal pay according to the pay rate that applies to overtime work.

Holiday & Leave

Sick Leave

Under the Labour Act, an employee is entitled to paid sick leave of up to 12 working days in a calendar year.

Maternity Leave

Expecting mothers are entitled to 12 weeks of maternity leave and at least 50% of their salary during that time.

Paternity Leave

There’s no mention of paternity leave in the Labour Act.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Nigeria

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Nigerian Employment Solutions

What is an Employer of Record in Nigeria?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Nigeria. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Nigeria?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Nigeria. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Nigeria?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Nigeria. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

Let's get started

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