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Nigeria

Payroll and Benefits Guide

Last updated:
Dec 8, 2022

Table of contents

Overview Contributions Minimum Wage Payroll Working Hours Leave Termination Common Benefits VISA VAT

Overview

Capital
Abuja
Currency
Nigerian Naira (NGN)
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December
Payroll Frequency
Monthly / Bi-monthly/ Weekly
Employer Taxes
1.00% to 12.00%

Contributions

Employer

Employer Payroll Contributions

10.00% Pension (applicable to employers with more than fifteen employees)
1.00% National Social Insurance Trust Fund (NSITF)
1.00% Industrial Training Fund (ITF) (applicable to all employers with a minimum of five employees or annual turnover of 50 million NGN)
1.00% to 12.00% Total Employment Cost

Employee

Employee Payroll Contributions

8.00% Pension
2.50% Housing Fund applicable to employees earning more than 3,000 NGN per year)
8.00% to 10.50% Total Employee Cost

Employee Income Tax

7.00% First 300,000 NGN
11.00% Next 300,000 NGN
15.00% Next 500,000 NGN
19.00% Next 500,000 NGN
21.00% Next 1.6 million NGN
24.00% Above 3.2 million NGN

Minimum Wage

General

The national minimum wage in Nigeria is currently 30,000 NGN per month.

 

Payroll

Payroll Cycle

In Nigeria, the payroll frequency is monthly, bi-weekly or weekly. The payment for salaries is to be made at least once a month.

13th Salary

There are no statutory requirements for 13th-month salary payments. However, bonuses are common at the discretion of the employer.

 

Working Hours

General

The standard working week in Nigeria consists of 48 hours, 8 hours per day.  

Overtime

All work more than the standard working hours a week is to be paid as overtime and is regulated by employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there are maximums in relation to the number of hours allowed.  

All overtime hours in excess of 48 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract/collective agreements.

Working Week

Monday-Friday

 

Leave

Paid Time Off

If an employee has been employed for 12 months, they are entitled to 6 days of paid annual leave.

Public Holidays

There are 13 public holidays.

Sick Days

Employees are entitled to 12 days of paid sick leave per year following the presentation of a medical certificate after two days of absence.  

Maternity Leave

Female employees within the public sector are entitled to 16 weeks of maternity leave at 100.00% of the employee’s average pay rate. In contrast, private-sector employees are entitled to 12 weeks of paid maternity leave at 50.00% of the employee’s average salary. Employees receive this entitlement following six months of consecutive service within the company.

Paternity Leave

Fathers/parents in the stats of Lagos and Enugu are entitled to two to three weeks of paid paternity leave.  

Parental Leave

There are no provisions in the law regarding parental leave.

Other Leave

There are no provisions in the law for additional statutory leave.

 

Termination

Termination Process

The termination process varies according to how the Employment Agreement and Collective Agreement are in place and is based on the type of contract and reason for termination. Employment can be terminated at any time by either the employer or the employee providing notice is given.  

Notice Period

In Nigeria, the notice period of an employee is dependent on their seniority, as follows:  

  • One day is required for three months of less service.
  • One week for three months to 2 years
  • Two weeks for 2 -5 years
  • One month for five or more years

Severance Pay

Severance pay is outlined in the employees’ employment contract/collective agreement; there is no legal obligation to pay any severance.

Probation Period

Probation periods are outlined in the employees’ employment contract/collective agreement; there is no legal requirement for a probation period.

 

VISA

VISA

Nigeria’s immigration system provides several options for employers of foreign nationals. Nigeria is a member of the Economic Community of West African States (ECOWAS); its immigration program provides ECOWAS-specific provisions. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.  

Business visitors from non-ECOWAS member states may use the business visa for stays of up to 90 days. This visa can be extended in Nigeria for another 30 to 90 days, at the authorities’ discretion.  

ECOWAS nationals are visa-exempt and may enter Nigeria with a valid passport.  

Non-ECOWAS nationals require an extension and to pay the corresponding fee for any stay beyond 56 cumulative days in 12 months.  

The Temporary Work Permit is suitable for foreign nationals undertaking short-term technical assignments (e.g., after-sales installation, maintenance, repairs of machines, and equipment). It permits a single entry to Nigeria for work for up to 90 days.

The ​Combined Expatriate Residence Permit and Aliens Card (CERPAC) or the Temporary Work Permit (TWP) are suitable for foreign nationals undertaking work, depending on their intended length of stay.

 

VAT

General

The standard rate of VAT in Nigeria is 7.50%

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