Hiring guide in Nigeria

What should I know about hiring in Nigeria?

Employing new staff from Nigeria might help your business grow, but there are a few things to think about before you start hiring talent from this African country.

When employing an employee who falls within the laws of Nigeria’s Labour Act, which includes individuals performing physical labor as well as those with clerical tasks, it is legally needed to prepare a formal employment contract.

Identification of both parties, date of commencement (and employment duration for temporary contracts), place of work, type of position and definition of the role as well as tasks and responsibilities, salary and extra pay as well as period of payment, working hours and overtime regulatory requirements, the total number of holidays, and notice periods for employment termination must all be included in the contract.

Why is Nigeria a good choice for finding remote employees?

Nigeria is an appealing alternative for international companies looking for fresh workers to join their remote operations. Furthermore, Nigeria is one of Africa’s fastest developing countries, making it an ideal starting point for exploring potential value in the African market.

Looking at how many start-up firms in Nigeria are adopting remote work as the new normal for reasons such as reduced daily company’s activities, reduced need for specific work facilities, and so on. Remote work is the future of work in Nigeria, especially with the use of technology.

According to the information we have acquired, businesses are more interested in employees who can work remotely. We have also noticed a rise in the number of remote job postings advertised after the COVID-19 outbreak.

Despite working in Africa’s largest economy, Nigerian employees have one of the lowest minimum wages on the continent. According to statistics, Nigeria’s GDP is the largest in Africa, ahead of Egypt and South Africa.

How can Native Teams help you hire in Nigeria

If you want to start hiring people from Nigeria, you can employ Nigerians using an employment contract written in the employee’s native language. The contract must identify the location of employment, duties, working hours, and holidays, as required by law.

Employees must get their contract within three months after starting their new job. Native Teams can help you employ your new team members through our employer of record services and as well as handle payroll, taxes, benefits and overall compliance of your Nigerian team.

Hire your first Nigerian employee with Native Teams.

Legal requirements for hiring in Nigeria

Minimum wage

Contributions & taxes

The Act requires a minimum payment of 18% of monthly earnings (with the business contributing 10% and the employee contributing 8%). If the employer agrees to pay the whole amount, the minimum payment is 20% of the monthly wage.

Employer tax

Tax rates on income range from 7% to 24%. Social security payments in Nigeria provide retirement, disability, illness, and maternity benefits. Employees must contribute a minimum of 8% of their salaries to the different benefit programs, while employers must contribute roughly 10%.

Corporate tax

The Corporate Tax Rate in Nigeria stands at 30%. Source: Federal Inland Revenue Service, Nigeria.

Employee tax

Tax rates on income range from 7% to 24%. Social security payments in Nigeria provide retirement, disability, illness, and maternity benefits. Employees must contribute a minimum of 8% of their salaries to the different benefit programs, while employers must contribute roughly 10%.

Income tax

The Personal Income Tax Rate in Nigeria stands at 24%. Source: Federal Inland Revenue Service, Nigeria.

To calculate the salary and taxes in Nigeria please click here.

Payroll cycle

Payroll is done monthly, biweekly, or weekly in Nigeria. Salary payments must be paid at least once a month.

Is there a 13th salary in Nigeria?

There are no legal obligations for 13th-month wage payments. However, bonuses are usually at the employer’s discretion.

Labor Rules

Probation period rules

Under Nigerian employment norms, the three-month period has been considered as a trial period. The maximum term of probation is not specified by law. However, in fact, probationary periods for employees range from three to six months.

Notice period 

The notice period is one day for less than three months of service, one week for more than three months but less than two years of service, two weeks for two to five years of service, and one month for five or more years of service.

Working hours

The usual working week in Nigeria is 48 hours long, with 8 hours of work every day.

Leave and benefits

Public holidays

There are 11 public holidays in Nigeria for which the employees are entitled to a day off:

Annual leave

Employees with at least 12 months of continuous service are entitled to a minimum of six working days of paid yearly vacation. If the employee is under the age of 16, including apprentices, their annual leave accrues at the rate of 12 working days for every year of continuous employment.

Sick leave

Workers are entitled to a maximum of twelve working days of paid sick leave in the event of illness. The registered medical practitioner must certify the illness. Sick leave is fully compensated leave that is determined as the worker’s base wage less overtime pay and additional benefits.

Maternity leave & paternity leave

In most cases, female employees are entitled to 12 weeks of maternity leave at 50% salary. 

Paid paternity leave is given for two weeks in Lagos and three weeks in Enugu.

Other leave (marriage, bereavement, exam leave)

Depending on the rule, the entitlement may differ. Employees engaged in job activities that are not governed by any W.R.O. are entitled to two working days of marital leave under L.N. 432 of 2007 – Minimum Special Leave Entitlement Regulations.

Insurance

Health security & private insurance

There is a National Health Insurance Scheme in Nigeria. There is also the option of purchasing private health insurance.

*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*

Visa

Relocation and work permits

Native Teams can be your Employer of Record and apply for your work permit in the country. You will be able to upload all the needed documents in our app. Native Teams will support you by giving you regular updates on the progress until you get your work and residence permit.

How long is the visa/work permit process?

Usually, it takes 2 to 4 weeks to get a work permit, depending on the authorities and provided documents.

Which documents do you need?

To apply for a visa/work permit in Nigeria, please upload the documents from our onboarding list (relocation to log in/pricing).

Why use Native Teams for hiring in Nigeria?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.