How to hire and pay employees in Nigeria
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Before hiring
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
EMPLOYER TAXES
21%
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.
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Labor laws 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.
Minimum wage
Employment contracts
There is no formal probation period in Nigeria.
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.
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Benefits and leave in
Nigeria
Vacation time
Employees who have been working for at least one full year with the same employer are entitled to 12 days of paid holiday in a year.
Sick leave
Employees are entitled to 12 paid sick days in a year, paid by the employer. They must obtain a certificate from a medical practitioner to claim this leave.
Maternity and paternity leave
Parental leave
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.
There is no paternity leave.
Holidays
View a list of recognized public holidays in Nigeria here.
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 in
Nigeria
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.
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.
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.
Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While Oyster strives to provide current and accurate information, Oyster makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.
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