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.
Over the years, the deep-rooted ties between Nigeria and the UK have developed into a more dynamic relationship that includes trade, education and culture.
Today, Nigeria and the UK have an excellent commercial relationship. UK companies are extremely well-known in Nigeria, and UK brands (especially luxury goods) are in high demand. 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 UK businesses to tap into.
The minimum salary in Nigeria is 30,000 Nigerian naira per month (2020).
Salary pay date
Salaries must be paid during the final week of each month.
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.
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.
- Industrial training fund levy — 1% on gross salary
- Employees’ compensation scheme — 1% on gross salary
- National contributory pension scheme — 10% on gross salary
Probationary periods can range from zero to six months. There’s no right to extend this beyond the six months.
- 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
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
Under the Labour Act, an employee is entitled to paid sick leave of up to 12 working days in a calendar year.
Expecting mothers are entitled to 12 weeks of maternity leave and at least 50% of their salary during that time.
There’s no mention of paternity leave in the Labour Act.
Keen to engage an EOR in Nigeria?
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