Capital City
Abuja
Currency
Nigerian Naira
(
₦
)
Timezone
GMT +1
Payroll Frequency
monthly
Tax Year
1 January - 31 December
Employer Tax
1% - 12%
Languages
English
Capital City
Abuja
Currency
Nigerian Naira
(
₦
)
Timezone
GMT +1
Payroll Frequency
monthly
Tax Year
1 January - 31 December
Employer Tax
1% - 12%
Languages
English
Minimum Wage: The statutory minimum wage in Nigeria is NGN 70,000 per month.
Working Hours: Nigerian working hour regulations offer considerable flexibility, with standard hours typically set at 8 hours daily and 40-48 hours weekly.
Payroll Taxes: In Nigeria, employers contribute about 24% in payroll taxes, which typically cover social security, health care, and other statutory benefits.
Average Salary: The average salary in Nigeria is roughly NGN 275,000 per month (about US $170).
Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.
However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.
Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.
From compliant contracts to competitive benefits, Playroll’s EOR services keep you aligned with local labor laws and regulations, safeguarding your business, so you can focus on growth.
Book a DemoBusinesses can only operate smoothly in Nigeria if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Nigeria below, to avoid any compliance issues.
In Nigeria, it is mandatory for both employer and employee to sign a written employment agreement. To be legally compliant, employment agreements must include the following information:
We can help you get a new employee started in Nigeria quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.
For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.
The probation period in Nigeria is typically 3 to 6 months. However, there is no specific legal requirement for a probation period in Nigeria. The length of the probation period is usually specified in the employee's employment contract.
The average salary in Nigeria in 2025 is roughly NGN 275,000 per month (about US $170). Salaries vary significantly depending on experience, industry, and location - senior professionals in finance, tech, and medicine often earn far more, while entry-level workers and those in rural or informal sectors earn considerably less. Major cities like Lagos and Abuja tend to offer higher wages due to higher costs of living and concentration of industries. Economically, Nigeria is experiencing high (but slowly easing) inflation, modest growth, and ongoing reforms, all of which are impacting salary structures across sectors.
Nigerian working hour regulations offer considerable flexibility, with standard hours typically set at 8 hours daily and 40-48 hours weekly. The Labour Act does not specify general working hours rather these are fixed by the mutual agreement or collective bargaining within the enterprise or industry. In typical working arrangements, Monday through Friday, the hours are 8:00 AM to 5:00 PM, with a one-hour break for lunch.
In Nigeria, overtime generally refers to any work performed beyond the standard working hours established in an employment contract or collective agreement. Common practice in Nigeria typically follows these compensation structures:
Global expansion shouldn't mean losing time to paperwork or dealing with complicated, country-specific HR systems. An Employer of Record helps you keep your focus on talent by handling the operational side of employment in Nigeria. That includes onboarding, contract management, payroll processing, and statutory compliance, all aligned with local laws and best practices. The EOR guarantees that employees are legally employed and properly supported from day one.
This streamlined setup allows you to prioritize recruiting the best people and integrating them into your company culture. Your team stays lean, and you avoid getting caught up in the details of local processes or shifting regulations. For founders, global hiring managers, or HR teams working across borders, an EOR multiplies your impact, reducing admin time, preventing errors, and helping ensure that new hires have a smooth experience from the get-go.
1 January - 31 December is the 12-month accounting period that businesses in Nigeria use for financial and tax reporting purposes.
The payroll cycle in Nigeria is usually monthly, with employees being paid at the end of the month.
As of September 1, 2025, Nigeria's minimum wage is set at NGN 70,000 per month. This rate applies to all workers, and the government reviews and adjusts it periodically.
There are no statutory requirements for 13th-month salary payments. However, bonuses are common at the discretion of the employer.
Employer payroll contributions are generally estimated at an additional 1% - 12% on top of the employee salary in Nigeria.
In Nigeria , the typical estimation for employee payroll contributions cost is around 10.5%.
Individual income tax in Nigeria is a progressive tax, meaning that the tax rate increases as the taxable income increases. it ranges from 7% to 24%
As per the Pension Reform Act 2014, employees must contribute a minimum of 8% of their basic salary, housing allowance, and transport allowance, while employers must contribute a minimum of 10% of the same sum.
Managing payroll taxes in Nigeria requires careful attention to multiple statutory obligations, including PAYE tax (7-24% progressive rates), pension contributions (10% employer, 8% employee), NHIS (10% employer, 5% employee), NHF (2.5%), ITF (1%), and NSITF (1%). Employers must register with various government agencies, maintain accurate employee records, and adhere to strict submission deadlines that vary by tax type—ranging from 7 days after salary payment for pension contributions to the 16th of the following month for NSITF.
Non-compliance can result in significant penalties, including percentage-based fines and interest charges. Using payroll management software like Playroll can help employers consolidate payroll data, automate complex calculations, ensure accurate statutory deductions, and maintain compliance with Nigeria's frequently updated tax regulations, ultimately reducing the risk of costly errors and penalties.
Hiring in Nigeria means taking on local payroll obligations, which often include unique tax rates, contribution rules, and strict documentation. If you're not familiar with the system, or don't have a local entity, it’s easy to make mistakes. That’s where an Employer of Record ccomes in. The EOR manages payroll for your team on your behalf, ensuring every process is accurate, timely, and legally compliant.
Key Ways an EOR Supports Payroll in Nigeria:
Make better business decisions by consolidating global payroll data, while seamlessly syncing your existing payroll operations.
Book a DemoIn Nigeria, work permits and visas are essential for employers hiring foreign workers or relocating employees to the country. The main work permits available include the Temporary Work Permit (TWP), which is for short-term assignments, the Expatriate Quota Work Permit for specialized and senior roles requiring government approval, and the Combined Expatriate Resident Permit and Aliens Card (CERPAC), which combines work and residence authorization for long-term expatriates.
Employers must comply with regulations such as securing expatriate quota approvals for certain positions and ensuring that work permits are renewed on time to maintain legal compliance. As of May 2025, Nigeria has implemented significant reforms to its expatriate administration and visa regime, including the introduction of a fully digital Expatriate Quota Application Portal (EQAP) for all new and renewal applications.
The annual leave entitlement in Nigeria is 21 - 28 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.
Nigeria has 11 public holidays in a calendar year, which are not included in the minimum paid leave entitlement and are taken in addition to annual leave. The following are national holidays in Nigeria:
Nigerian workers are entitled to annual leave of at least six working days with full salary, subject to the following details:
Maternity leave is provided under the Nigerian Labor Act. Provided that employees have worked for at least six months with their employer, they are entitled to six weeks before childbirth and six weeks afterwards. Additional details relating to Maternity Benefits in Nigeria include:
In 2021 the Federal Executive Council approved a paternity leave of 14 days for employees in the public sector. Paternity leave pay is negotiated in an employment contract.
Nigerian employees are entitled to 12 days of paid sick leave. Employees may need to provide a medical certificate from a registered medical practitioner.
Nigeria does not have a separate shared parental leave policy.
Employees are entitled to three days of paid bereavement leave in the event of the death of a spouse, child, parent, sibling, or parent-in-law.
Employees may be entitled to paid or unpaid study leave, depending on their contract of employment
When hiring across multiple countries, maintaining consistency in how you deliver employee benefits quickly gets tricky. Each country, including Nigeria, has its own legal rules, cultural norms, and contribution systems. An Employer of Record helps you strike the right balance between global structure and local compliance. They take over the complexity of delivering benefits that are aligned with Nigeria’s legal requirements and competitive with local market expectations.
From ensuring statutory benefits are in place to managing local onboarding timelines and enrollment systems, the EOR provides a seamless experience for both employer and employee. This makes it easier to grow your team across borders without reinventing your benefits process in each new location. You stay in control of your overall benefits strategy, while the EOR takes care of executing it in a way that works legally and culturally in Nigeria. It’s a smarter way to scale benefits globally without losing local relevance.
The termination process in Nigeria is governed by the Labour Act and the National Industrial Court Act. Under these laws, employers have the right to terminate employment contracts at any time, but they must give employees notice of termination or pay them salary in lieu of notice.
The notice period required depends on the employee's length of service, as follows:
Severance pay in Nigeria is not mandatory by law, but it is often part of an agreement between the employer and employee, or is provided under sectoral (branch) collective agreements. The amount of severance pay paid to an employee typically depends on their length of service and last salary. There are two main types of severance pay in Nigeria:
Disclaimer
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
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As of January 1, 2024, Nigeria's minimum wage rates are:
The average monthly salary in Nigeria in 2025 is approximately NGN 275,000 (US $170), with significant variation depending on experience, industry, and location.
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