How to hire and pay EMPLOYEES IN

Nigeria

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Before hiring

EMPLOYEES IN
Nigeria

Before hiring employees in Nigeria, there are a few important things you’ll need to know. Firstly, in Nigeria, employees are entitled to 12 weeks of maternity leave, paid at a rate of 50% of an employee’s regular salary—provided they have worked at least six months with the same employer. However, there is no paternity leave.

It’s also important for employers to know that in Nigeria, there is no law requiring severance pay, but they’re usually part of an agreement between the employer and employee, and depend on the employees' length of service and last salary. It can also be negotiated via sectoral collective agreements.

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Nigeria below.

At a Glance

CURRENCY

NGN

OFFICIAL LANGUAGE

ENGLISH

PAYROLL FREQUENCY

MONTHLY, BI-MONTHLY, WEEKLY

PUBLIC HOLIDAYS

13

(based on region;
see here
)

EMPLOYER TAXES

21%

of gross salary

13th / 14th SALARY

N/A

Good to know

  • Employees are not entitled to paid vacation days in their first year of service. Thereafter, they get 12 paid days off in a year.
  • Employees can opt out of the working hours individually if their normal working hours are fixed by mutual agreement; however they cannot opt out individually if their working hours are fixed by a collective bargaining agreement.
  • There is no statutory requirement for employers to pay severance in Nigeria, but this can be negotiated into employment contracts.

Employment in

Nigeria

Working hours and overtime

Employees in Nigeria work eight hours a day, 40 hours a week.

The terms of overtime work must be included in the employment contract. There is no government mandate on premium payment for overtime work.

Employees can opt out of the working hours individually if their normal working hours are fixed by mutual agreement; however they cannot opt out individually if their working hours are fixed by a collective bargaining agreement.

Employment contracts
Probationary period

There is no formal probation period in Nigeria. 

Pensions
Notice period

In Nigeria, notice periods vary depending on the length of service. The breakdown is as follows:

  • Up to three months' service: One day notice
  • Three months to two years' service: One week
  • Two to five years' service: Two weeks
  • Five or more years' service: One month

Salary in lieu of notice may also be given.

IP protection and non-compete agreements

Non-compete agreements must be reasonable and restricted in geographical scope, and not exceed one year in duration after termination.

Employers are not required to compensate employees for adhering to the agreement, but payment can be included in the agreement between them.

Employment cost calculator

Holidays

01 Jan

New Year's Day

20 Jul

Id el Kabir

02 Apr

Good Friday

21 Jul

Id el Kabir Holiday

05 Apr

Easter Monday

01 Oct

National Day

01 May

Labour Day

18 Oct

Id el Maulud

13 May

Id el Fitri

25 Dec

Christmas Day

14 May

Id el Fitri Holiday

26 Dec

Boxing Day

12 Jun

Democracy Day

01 Jan

New Year's Day

02 Apr

Good Friday

05 Apr

Easter Monday

01 May

Labour Day

13 May

Id el Fitri

14 May

Id el Fitri Holiday

12 Jun

Democracy Day

20 Jul

Id el Kabir

21 Jul

Id el Kabir Holiday

01 Oct

National Day

18 Oct

Id el Maulud

25 Dec

Christmas Day

26 Dec

Boxing Day

Employer tax

An employer’s social contributions in Nigeria total 21%. This includes contributions for pension and disability (10%), health insurance (10%), and accident (1%). 

Individual tax

In Nigeria, employees pay between 7% and 24% in taxes, depending on their income bracket. Employees also pay between 15.5% in social security.

Termination of employment

In Nigeria, employment can be terminated at any time by either the employer or the employee, as long as proper notice is given.

There is no law requiring severance pay, but it is usually part of an agreement between the employer and employee, and depends on the employees' length of service and last salary. It can also be negotiated via sectoral collective agreements.

Start hiring employees in

Nigeria

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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