Nigeria at a glance
Taxes in Nigeria
Employer Contributions
| Contribution | Rate |
|---|---|
| Contributory Pension Scheme (employer) | Minimum 10% of monthly emolument |
| Group Life Insurance (minimum) | 3x annual total emolument |
| National Housing Fund (NHF) | 2.5% of monthly basic salary (deducted from employee; employer remits) |
| Industrial Training Fund (ITF) | 1% of annual payroll (for companies with 5+ employees or NGN 50M+ turnover) |
| Contribution | Rate |
|---|---|
| Contributory Pension Scheme (employer) | Minimum 10% of monthly emolument |
| Group Life Insurance (minimum) | 3x annual total emolument |
| National Housing Fund (NHF) | 2.5% of monthly basic salary (deducted from employee; employer remits) |
| Industrial Training Fund (ITF) | 1% of annual payroll (for companies with 5+ employees or NGN 50M+ turnover) |
| Contribution | Rate |
|---|---|
| Contributory Pension Scheme (employee) | Minimum 8% of monthly emolument |
| National Housing Fund (NHF) | 2.5% of monthly basic salary |
| Personal Income Tax (PAYE) | 7% – 24% (progressive) |
| Annual Taxable Income (NGN) | Tax Rate |
|---|---|
| First 300,000 | 7% |
| Next 300,000 | 11% |
| Next 500,000 | 15% |
| Next 500,000 | 19% |
| Next 1,600,000 | 21% |
| Above 3,200,000 | 24% |
A Consolidated Relief Allowance (CRA) of the higher of NGN 200,000 or 1% of gross income, plus 20% of gross income, reduces taxable income.
Employer of Record in Nigeria
What Is an Employer of Record?
An Employer of Record is the legal employer of your worker in Nigeria. Remote& manages employment contracts under the Nigerian Labour Act, pension fund registration, PAYE remittance to the relevant State Internal Revenue Service, Housing Fund contributions, and statutory benefits — so you can hire in Nigeria without establishing a local entity.
How Remote& EOR Works
| Party | Role |
|---|---|
| Your Company | Recruits the worker, assigns tasks, manages performance |
| Remote& | Signs the employment contract, registers with the SIRS and PFA, processes payroll, withholds PAYE, manages pension and housing fund contributions |
| Employee | Fulfills their role for your company under a Nigeria-compliant employment contract |
Ask Remi:
"Hire a Senior Software Engineer in Lagos — NGN 1,200,000/month, starting in 6 weeks" Remi handles contract generation, pension fund account setup, PAYE registration, payroll configuration, and statutory benefits enrollment — all in one conversation.
Benefits in Nigeria
Contributory Pension Scheme All employers with 3 or more employees must enroll staff in the Contributory Pension Scheme (CPS) under the Pension Reform Act 2014. The employer contributes a minimum of 10% and the employee a minimum of 8% of monthly emoluments (basic salary + housing + transport allowances).
Group Life Insurance Employers must maintain a group life insurance policy for employees, with a minimum benefit of 3 times the employee's annual total emolument.
National Housing Fund Employees earning NGN 3,000 or more monthly must contribute 2.5% of basic salary to the NHF, remitted by the employer to the Federal Mortgage Bank of Nigeria.
- Private health insurance (HMO)
- Additional pension contributions
- Annual performance bonus
- 13th-month salary (common in practice)
- Transportation and housing allowances
- Professional development and training support
- Mobile phone and data allowance
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Annual Leave | 6 working days/year (general); 12 working days/year (workers under 16) |
| Sick Leave | 12 working days per year at full pay |
| Maternity Leave | 12 weeks |
| Paternity Leave | Not mandated by federal law (some states and companies provide 2–5 days) |
Employment conditions
Working Hours
Standard working hours are 8 per day and 40 per week. Overtime must be compensated at a rate agreed in the employment contract or collective agreement.
Probation
Probation periods are common and should be stated in the employment contract. The typical probation period is 3–6 months. Either party may terminate during probation with the notice specified in the contract.
Payments
End of employment in Nigeria
Employment in Nigeria may end by resignation (with contractual notice), mutual agreement, expiry of a fixed-term contract, or employer-initiated termination. The Labour Act requires minimum notice: 1 day for daily-rated workers, 1 week for monthly workers completing less than 3 months' service, and 1 month for monthly workers with 3 months or more of service.
Wrongful or constructive dismissal gives rise to damages claims. Termination for cause requires evidence of the reason and, depending on the misconduct, may follow a disciplinary process. Final settlement must include outstanding wages and accrued leave.
Frequently asked questions
International companies can hire in Nigeria via: home-country payroll (not compliant — Nigerian contracts, pension registration, and state PAYE obligations apply), contractor arrangements (appropriate for genuine project-based work), establishing a local Nigerian entity (CAC registration required), or using Remote& as Employer of Record. The EOR model is the fastest and most compliant path for international companies.