Payroll and Benefits Guide Nigeria
Last updated: May 14, 2023
Employer Payroll Contributions
|1.00% – 12.00%||Total Employment Cost|
Pension (applicable to employers with more than fifteen employees)
National Social Insurance Trust Fund (NSITF)
Industrial Training Fund (ITF) (applicable to all employers with a minimum of five employees or annual turnover of 50 million NGN)
Employee Payroll Contributions
|8.00% – 10.50%||Total Employee Cost|
|2.50%||Housing Fund applicable to employees earning more than 3,000 NGN per year)|
Employee Income Tax
|7.00%||First 300,000 NGN|
|11.00%||Next 300,000 NGN|
|15.00%||Next 500,000 NGN|
|19.00%||Next 500,000 NGN|
|21.00%||Next 1.6 million NGN|
|24.00%||Above 3.2 million NGN|
The national minimum wage in Nigeria is currently 30,000 NGN per month.
MINIMUM WAGE (PER MONTH)
In Nigeria, the payroll frequency is monthly, bi-weekly or weekly. The payment for salaries is to be made at least once a month.
There are no statutory requirements for 13th-month salary payments. However, bonuses are common at the discretion of the employer.
The standard working week in Nigeria consists of 48 hours, 8 hours per day. A 40-hour workweek with 8 hours per day is common as well.
There is no legal mandate on how much overtime pay to give but the terms of overtime should be laid out in the employment contract.
Paid Time Off
If an employee has been employed for 12 months, they are entitled to 6 days of paid annual leave. It is common to give 7 days from the first day of work. Unused leave can be carried over at the discretion of the employer.
Public holidays that fall on the weekend are usually lost unless a day off in lieu has been mandated by the government.
Religious holidays are determined by the lunar cycle and will show as tentative until they are confirmed nearer the date of the holiday.
Employees are entitled to 12 days of paid sick leave per year following the presentation of a medical certificate after two days of absence. This is paid at full salary by the employer.
Female employees within the public sector are entitled to 16 weeks of maternity leave at 100.00% of the employee’s average pay rate. In contrast, private-sector employees are entitled to 12 weeks of paid maternity leave at 50.00% of the employee’s average salary. Employees receive this entitlement following six months of consecutive service within the company.
PAID MATERNITY LEAVE (DAYS)
There is a 14 working days paternity leave for men.
There are no provisions in the law regarding parental leave.
There are no provisions in the law for additional statutory leave.
The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination. Employment can be terminated at any time by either the employer or the employee providing notice is given.
In Nigeria, the notice period of an employee is dependent on their seniority, as follows:
- One day is required for three months of service or less
- One week for three months to 2 years
- Two weeks for 2 -5 years
- One month for five or more years
For manual and clerical workers (who are covered by the labor act), redundancy pay is mandatory. The law does not stipulate the amount to be paid as redundancy pay. The law only provides that the employer should use its best endeavors to negotiate redundancy payments. For employees not covered by the labor act, severance pay is usually subject to the provisions of the employment contract or collective agreement.
No probation period is required but it is common to use 3-6 months.
Nigeria’s immigration system provides several options for employers of foreign nationals. Nigeria is a member of the Economic Community of West African States (ECOWAS). Its immigration program provides ECOWAS-specific provisions. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.
Business visitors from non-ECOWAS member states may use the business visa for stays of up to 90 days. This visa can be extended in Nigeria for another 30 to 90 days at the authorities’ discretion.
ECOWAS nationals are visa-exempt and may enter Nigeria with a valid passport.
Non-ECOWAS nationals require an extension and to pay the corresponding fee for any stay beyond 56 cumulative days in 12 months.
The Temporary Work Permit is suitable for foreign nationals undertaking short-term technical assignments (e.g., after-sales installation, maintenance, repairs of machines, and equipment). It permits a single entry to Nigeria for work for up to 90 days.
The Combined Expatriate Residence Permit and Aliens Card (CERPAC) or the Temporary Work Permit (TWP) are suitable for foreign nationals undertaking work depending on their intended length of stay.
The standard rate of VAT in Nigeria is 7.50%.
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Public Holidays Calendar
|Saturday||Jan-1||New Year's Day|
|Wednesday||Jun-28||Id El Kabir|
|Thursday||Jun-29||Id El Kabir|
|Thursday||Nov-2||Thanks Giving Day|
|Friday||Dec-22||Sambisa Memorial Day|