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How to hire and pay employees in Nigeria
Slasify
Jun 21, 2025
Before Hiring in Nigeria
Discover the global hiring and employment landscape in Nigeria—Africa's largest economy and a key player on the continent. Nigeria offers vast opportunities in sectors such as oil and gas, telecommunications, and agriculture, supported by a young and entrepreneurial population.
Explore the employment essentials including payroll, personal income tax, statutory contributions, annual leaves, minimum wage, terminations, visa requirements, and more. Gain valuable compliance insights for a smooth entry into the dynamic Nigeria market with Slasify's global premium HR platform.
At a Glance
| Capital | Abuja |
| Currency | Nigerian Naira (NGN) |
| Payroll Cycle | Monthly |
| Minimum Wage | N.A. |
| Annual Leave | 6 days |
| Personal Income Tax | 7%–24% |
Personal Income Tax
| Taxable Income (NGN) | Progressive Tax Rate (%) |
|---|---|
| Up to 300,000 | 7 |
| 300,001–600,000 | 11 |
| 600,001–1,100,000 | 15 |
| 1,100,001–1,600,000 | 19 |
| 1,600,001–3,200,000 | 21 |
| Over 3,200,000 | 24 |
Where a taxpayer has no taxable income, a minimum tax rate of 1% shall be payable on their total income.
Local Tax
There are no local taxes on employment income in Nigeria.
Statutory Contributions
Employer Contribution
| Contribution rate | |
|---|---|
| Industrial Training Fund | 1% |
| National Health Insurance Scheme | 10% |
| Nigeria Social Insurance Trust Fund | 1% |
| Pension | 10% |
Employee Contributions
| Contribution rate | |
|---|---|
| National Health Insurance Scheme | 5% |
| National Housing Fund | 2.5% |
| Pension | 8% |
Note: Contributions to the National Housing Fund is no longer compulsory for employees in the private sector.
Payment of Wages
No contract shall provide for the payment of wages at intervals exceeding a month unless the written consent of the State Authority has been previously obtained.
Minimum Wage
There are currently discussions surrounding a new minimum wage in Nigeria, with the previous minimum wage of NGN 30,000 per month set by the Minimum Wage Act of 2019 being up for review.
Statutory Bonus
There is no statutory requirements to provide employees with any bonus, though a 13th month pay may still be customarily paid.
Termination
An employment contract may generally be terminated by either party by giving the other party a notice of their intention to do so, as well as their reasons for the termination.
Notice Period
Either party to an employment contract may terminate the contract on the expiration of notice given to them by the other party.
| Length of service | Notice period |
|---|---|
| Up to 3 months | 1 day |
| More than 3 months, but less than 2 years | 1 week |
| At least 2 year, but less than 5 years | 2 weeks |
| 5 years or more | 1 month |
Summary termination of an employment contract without notice is permitted as long as the terminating party has the appropriate reasons justifying their decision.
Note: The notice period shall exclude the day the notice is given, and any notice for a period of a week or more shall be in writing.
Severance Pay
Severance pay are not expressly regulated by the Labor Act, though they may still be agreed to in the individual employment contract or the relevant collective bargaining agreement.
Probationary Period
Probationary periods are not expressly regulated by the Labor Act, though they may still be included in the the individual employment contract or the relevant collective bargaining agreement.
Work Time Rules
Standard Working Hours
Normal hours of work are not defined in the Labor Act, and shall be those fixed by mutual agreement, by collective bargaining or by an industrial wages board.
Break Period
Where an employee is at work for 6 hours or more per day, their work shall be interrupted by break period(s) of at least an hour in aggregate. The length of the break period shall be fixed in advance, and the employee shall be free to dispose of their time and not be required to remain at the workplace.
Exceptions may be made to the rule guaranteeing break periods where unforeseen circumstances render them necessary.
In addition to the aforementioned break, nursing employees shall also be allowed 30-minute breaks twice a day during their working hours to nurse their children.
Overtime
Hours worked in excess of the agreed upon normal working hours shall constitute overtime.
Overtime work and their corresponding premiums are not regulated under the Labor Act, and shall be determined by mutual agreement, by collective bargaining or by an industrial wages board.
Weekly Rest Days
Employees shall be entitled to a day of rest in every 7-day period, and those required to work on their rest day shall either be granted a compensatory time-off from work or have them be paid at the relevant overtime rates.
Holiday and Leave Entitlements
Public Holidays
Employees are generally entitled to take the day off during public holidays. There are 13 days of public holidays in Nigeria for 2024.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Good Friday | March 29 |
| Easter Monday | April 1 |
| Eid al-Fitr Holiday | April 10–11 |
| Labor Day | May 1 |
| Democracy Day | June 12 |
| Eid al-Adha Holiday | June 16–17 |
| Mawlid | September 15 |
| National Day | October 1 |
| Christmas Day | December 25 |
| Boxing Day | December 26 |
Annual Leave
Employees who have completed 12 months of continuous service shall be entitled to at least 6 working days of paid annual leave.
An employee's right to annual leave may be deferred by mutual agreement, provided that the leave-earning period shall not thereby be increased beyond 24 months' continuous service.
It shall be unlawful for an employer to pay wages in lieu of annual leave to an employee whose contract has not been terminated.
Sick Leave
Employees shall be entitled to 12 working days of paid sick leave per calendar year in the event that they are unable to work due to a temporary illness certified by a registered medical practitioner.
Maternity Leave
Employees shall be entitled to 12 weeks of maternity leave, 6 weeks of which shall be taken before the expected date of childbirth and the remaining 6 weeks shall be taken after confinement.
Employees with at least 6 months of continuous service immediately before their leave shall be paid at least 50% of their normal wages for the duration of their leave.
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