What do you need to know to hire in Nigeria?

Employer pension under the Pension Reform Act 2014 is 10% of monthly emoluments (basic salary plus housing and transport allowances), remitted within 7 working days of payroll. Employers with fewer than 15 employees are exempt. The Nigeria Social Insurance Trust Fund (NSITF) levies a 1 percent employer contribution for employee compensation insurance. These are the statutory floors. Teamed's Nigeria fee sits inside the total cost envelope.

Teamed's Nigeria price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice.

The full breakdown, with worked examples at current statutory rates, is in the cost guide.

Incorporating a Nigerian company through the Corporate Affairs Commission (CAC) takes four to eight weeks and comes with ongoing annual returns, PAYE registration in each relevant State, and pension fund administration requirements. An Employer of Record is faster and cheaper at low headcount. Teamed runs Nigerian payroll, contracts, and labour law compliance from day one.

The crossover point depends on Nigerian salary levels and your local accounting costs. For most professional roles it lands around 5 to 8 employees. The EOR vs entity guide runs those numbers for Nigeria specifically.

Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Nigerian entity on one platform under Teamed's Graduation Model, with tenure preserved.

The Nigeria Tax Act 2025 is the biggest change to personal income taxation since the Personal Income Tax Amendment Act 2011. It removes the Consolidated Relief Allowance, introduces a zero-rate band on the first NGN 800,000/year of annual income, and sets a new progressive scale of six bands rising to 25%. Employers must update PAYE calculations from 1 January 2026. Rent relief up to NGN 500,000 replaces the old housing allowance treatment.

The National Minimum Wage (Amendment) Act 2024, signed in July 2024, set the minimum wage at NGN 70,000/month backdated to 1 May 2024. Some states have adopted higher floors. The hiring guide covers the employer registration and day-one obligations in detail.

Statutory annual leave is 6 days after 12 months of continuous service under the Labour Act (Cap L1 LFN 2004). Workers under 16 receive 12 working days. Sick leave is 12 days of full-pay sick leave per year, with medical certification. There are 13 public holidays in 2026; these are separate from annual leave and cannot be counted against it.

Maternity leave is 12 weeks, split at least 6 weeks before and 6 weeks after delivery. The private sector statutory pay rate is 50% of wages, for employees with 6 or more months of service. Federal civil servants receive 16 weeks at full pay. Private sector paternity leave is contractual only. The benefits guide covers each entitlement and employer obligations.

Employer statutory contributions in Nigeria are lower than most comparable markets. Employer pension (Pension Reform Act 2014) is 10% of monthly emoluments, remitted to a licensed Pension Fund Administrator within 7 working days of payroll. The NSITF employer levy is 1 percent for employees compensation insurance. There is no employer health insurance mandate at federal level; group health plans are contractual.

Employees pay PAYE at source. The Nigeria Tax Act 2025 schedule: zero on the first NGN 800,000/year; 15% on the next NGN 2.2 million; rising through 18%, 21%, and 23%, to a top of 25% above NGN 50 million. PAYE must be remitted to the State Internal Revenue Service within 10 days days of each month-end. The tax and payroll guide sets out every band and threshold.

Notice under the Labour Act (Cap L1 LFN 2004) Section 11 follows a four-band scale. Employees up to 3 months of service need only 1 day of notice. From 3 months to 2 years: 1 week. From 2 to 5 years: 2 weeks. At 5 or more years: 4 weeks. Notice of one week or more must be in writing. Payment in lieu is permitted.

Nigeria has no statutory severance formula. The Labour Act requires employers to negotiate redundancy pay with affected workers or their representatives, but prescribes no minimum per year of service. What an employee receives on redundancy depends entirely on their contract, any applicable collective agreement, and the outcome of that negotiation. The National Industrial Court hears wrongful dismissal claims with no qualifying service period and no statutory cap on its awards. The termination guide covers the full process.

The annual leave floor is low by global standards. Six working days is the legal minimum under the Labour Act. Market practice in Lagos for professional roles runs 10 to 21 days. Offer letters frequently promise more than the statutory floor. Know what your contract says before the first hire, because it becomes the benchmark for every subsequent one.

PAYE is administered at state level, not federal. Each employee's PAYE goes to the State Internal Revenue Service of the state where the employee is resident. Employees in Lagos, Abuja (FCT), Port Harcourt, and Kano each register with a different authority. Multi-state teams generate multi-state PAYE obligations. The tax guide and hiring guide both cover how Teamed manages this across Nigerian states.