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Nigeria

Introduction
 

General overview & country facts, as well as labour regulations.
Employer Contributions
 

These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Employee Contributions
 

These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Terms
 

All you need to know about salary & bonuses, working hours & overtime, probation period, notice period & severance pay, as well as all leave types.

COUNTRY PLAYBOOK

Nigeria
Everything you need to know about payroll, benefits & hiring top talent in Nigeria

Currency

Nigerian Naira (NGN)

Salary payment frequency

Monthly, Bi-weekly, weekly

Capital

Abuja

Time Zone

GMT +1:00

Official Languages

English

Is English spoken?

Yes
Nigeria employer of record

Quick Links

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Introduction

General Overview & Economic Facts
  • Nigeria, officially known as the Federal Republic of Nigeria, is a country in West Africa. It spans an area of 923,769 square kilometres (356,669 square miles), with a population of over 211 million
  • Nigeria is a federal republic consisting of 36 states and the Federal Capital Territory
  • Nigeria’s economy is a middle-income, mixed economy, with rapidly growing manufacturing, technology and entertainment sectors
  • Its economy ranks 26th by nominal GDP (2021) and 24nd by PPP (2020)
  • Nigeria ranks 161st on the HDI (2019)
Why Employ In Nigeria?
  • The main exports from Nigeria are oil, natural gas, cocoa and rubber
  • 20.27 % of the population is between the ages of 15 and 24 years, with 30.6% of the population being between the ages of 25 and 54. Nigeria has a mix of a fairly youthful population, making it a favourable country to employ young, energetic employees, as well as a more mature population, making it a good country to hire more experienced employees
Overview of the Labour Law
  • The Nigerian Labour Act is the main source of employment law in Nigeria. There are a number of additional Acts including the Employees Compensation Act, the Industrial Training Act and the Pensions Reform Act as well as the Constitution
  • The labour regulations covers employee rights, minimum wage, working conditions and termination
  • Labor law in Nigeria is based on the protection of both employers and employees
Fun Country Facts
  • Nigeria has 521 languages, the fourth most number of languages in the world
  • Nigeria’s movie industry is called Nollywood
  • Nigeria has the highest paid legislators in the entire world
Why Use Playroll Services For Nigeria?
  • Employing in Nigeria requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Nigeria
  • With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
  • We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your team
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Employer Contributions

These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.

Nigeria Social Insurance Trust Fund (NSITF)

Calculated on monthly emolument (Basic Salary, Transport Allowance, Housing Allowance)

1.00%

Pension Fund
Calculated on monthly emolument (Basic Salary, Transport Allowance, Housing Allowance)

Contribution shared with employee
10.00%

Contribution not shared with employee
20.00%

National Health Insurance Scheme (NHIS)
Calculated on basic monthly salary

Contribution shared with employee
10.00%

Contribution not shared with employee
15.00%

Industrial Training Fund (ITF)
Calculated on the total annual payroll value

1.00%

Police Fund Levy
Calculated on the net profit of the company

0.005%

Group Life Insurance
Calculated on the Sum Assured (at least 3 times the total annual emolument)

0.006%

Transport Allowance

Where clerical workers, who do not have a formal letter of employment, are required to travel 16kms or more from their normal place of work to another worksite, they are entitled to free transport or an allowance in lieu thereof 

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Employee Contributions

These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.

Pension Fund
Calculated on monthly emolument (Basic Salary, Transport Allowance, Housing Allowance)
Contribution shared with employer 8.00%
National Health Insurance Scheme (NHIS)
Calculated on basic monthly salary

Contribution shared with employer
5.00%

National housing Fund
Applicable if employees earn more than NGN 3,000.00 basic salary per year

2.50%

Income Tax
Income Tax is ‘Pay As You Earn’

Income bracket per annum

0.00 – 300,000.00
7.00%

300,001.00 – 600,000.00
11.00%

600,001.00 – 1,110,000.00
15.00%

1,110,001.00 – 1,600,000.00
19.00%

1,600,001.00 – 3,200,000.00
21.00%

3,200,001.00 or more
24.00%

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Employment Terms

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General

Minimum Wage
  • NGN 30,000.00 per month
Working Hours
  • There is no legal limit on working hours. Work hours are determined by mutual agreement, collective bargaining agreements or an industrial wages board.
  • Minimum 1 hour meal interval
  • Typical working hours start at 08h00 and end between 17h00, Monday to Friday
Overtime
  • There is no statutory maximum overtime
  • Hours in excess of the normal hours fixed under an employment contract are considered overtime hours
Notice Period
  • Employed between 0 and 3 months- 1 days’ notice
  • Employed between 3 months and 2 years- 1 weeks’ notice
  • Employed between 2 and 5 years- 2 weeks’ notice
  • Employed for 5 or more years- 1 months’ notice
Severance Pay
  • There is no statutory obligation to provide severance pay
  • Severance pay may be specified in employment contract or collective agreement
Probation Period
  • There is no statutory probation period
  • Employees can expect a probation period of 3 to 6 months
Bonus
  • There is no statutory bonus
  • It is common to pay employees a 13th month bonus
Public Holidays

Public holidays 2022

  • January 1st – New Year’s Day
  • April 15th – Good Friday
  • April 18th – Easter Monday
  • May 1st – Worker’s Day
  • May 2nd – Eid el Fitr
  • May 3rd – Eid el Fitr (observed)
  • June 12th – Democracy Day
  • July 9th – Eid el Kabir
  • July 10th – Eid el Kabir (observed)
  • October 1st – National Day
  • October 8th – Eid el Maulud
  • December 25th – Christmas Day
  • December 26th – Boxing Day
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Leave

Paid Leave / Vacation Days
  • Paid leave
  • Paid by employer
  • Minimum of 6 days per year after 1 year of employment
Sick Leave
  • Paid leave
  • Paid by employer
  • 12 days per year
Maternity Leave
  • Paid leave
  • Paid by employer
  • 12 weeks
Paternity Leave
  • There is no statutory paternity leave
  • It is common to grant 2 to 3 weeks of paid paternity leave
Start hiring in Nigeria today!