Payroll and Benefits Guide Nigeria

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

General

The national minimum wage in Nigeria is currently 30,000 NGN per month.

Payroll Cycle

In Nigeria, the payroll frequency is monthly, bi-weekly or weekly. The payment for salaries is to be made at least once a month.

13th Salary

There are no statutory requirements for 13th-month salary payments. However, bonuses are common at the discretion of the employer.

General

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.

Overtime

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.

Working Week

Monday–Friday

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

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.

Sick Days

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.

Maternity Leave

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.

Paternity Leave

There is a 14 working days paternity leave for men.

Parental Leave

There are no provisions in the law regarding parental leave.

Other Leave

There are no provisions in the law for additional statutory leave.

Termination Process

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.

Notice Period

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

Severance Pay

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.

Probation Period

No probation period is required but it is common to use 3-6 months.

VISA

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.

General

The standard rate of VAT in Nigeria is 7.50%.