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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.

An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in Nigeria – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in Nigeria worth checking out!

Employers Provisions

Salary Information

Salary

The minimum salary in Nigeria is 30,000 Nigerian naira per month (2020).

Salary currency

Nigerian naira

Salary pay date

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

Statutory benefits

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

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

Working hours

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.

Probationary period

This 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

Overtime

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.

  • Saturday 1 January – New Year’s Day
  • Monday 3 January – New Year’s Day (in lieu)
  • Wednesday 23 February – State Holiday
  • Monday 11 April – Public Holiday
  • Friday 15 April – Good Friday
  • Monday 18 April – Easter Monday
  • Sunday 1 May – Worker’s Day
  • Monday 2 May – Worker’s Day (in lieu)
  • Tuesday 3 May – Eid-el-fitru Sallah
  • Friday 27 May – Children’s Day
  • Monday 13 June – Democracy Day
  • Saturday 9 July – Id el kabir
  • Friday 29 July – Islamic New Year
  • Monday 22 August – Isese Day
  • Saturday 1 October – Independence Day
  • Wednesday 2 November – Thankgiving Day
  • Thursday 22 December – Sambisa Memorial Day
  • Sunday 25 December – Christmas Day
  • Monday 26 December – Boxing Day
PEO in Nigeria

Keen to engage an EOR in Nigeria? At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey

To find out how we can help your business with our employment solutions, contact us today.

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