Payroll and Benefits Guide - Nigeria

Nigeria
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Currency

Nigerian Naira
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Capital

Abuja
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Employer Taxes

1.00%  to 12.00%

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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Nigeria is located in West Africa and is the most populous country on the continent.

Delicious cuisine, including jollof rice and suya.

Lagos, the largest city in Nigeria, is also the most populous city in Africa.

Talented athletes in football, basketball, and track and field.

Major oil producer in Africa.

National parks and wildlife reserves.

Nigeria

Contributions

Employee Payroll Tax

Contribution TypeRate
Pension8.00%
Housing Fund applicable to employees2.50%

Employer Payroll Tax

Contribution TypeRate
Pension10.00%
National Social Insurance Trust Fund1.00%
Industrial Training Fund1.00%

Payroll

Payroll Cycle

The payroll cycles are monthly, bi-weekly or weekly

13th Salary

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

Work Hours and Week

48 hours, 8 hours per day. A 40-hour workweek with 8 hours per day is common as well. Monday–Friday

Overtime

There is no legal mandate on how much overtime pay to give but the terms of overtime should be laid out in the employment contract.
Nigeria

Leave

Paid Time Off

Minimum of 6 days paid leave a year after the completion of 1 year of employment.

Public Holidays

There are 10 holidays.

Sick Days

12 days of paid sick leave per year

Maternity Leave

Female employees in the public sector in Nigeria are entitled to 16 weeks of fully paid maternity leave, while those in the private sector receive 12 weeks of partially paid maternity leave after six months of consecutive service.

Paternity Leave

There is a 14 working days paternity leave for men.

Parental Leave

A There are no provisions in the law regarding parental leave.

Termination

Termination Process

Termination of employment in Nigeria depends on the terms of the employment and collective agreements, contract type, and reason, allowing either the employer or employee to terminate with appropriate notice.

Notice Period

In Nigeria, the notice period for termination is typically one day for employees with three months of service or less, one week for three months to two years, two weeks for two to five years, and one month for five or more years of service.

Severance Pay

Redundancy pay is compulsory for manual and clerical workers covered by the labor act, with the specific amount left to negotiation by the employer. For those not protected by the labor act, severance pay is typically determined by the employment contract or collective agreement.

Probation Period

Probation Period

No probation period is required but it is common to use 3-6 months.

Immigration

Nigeria Immigration Service (NIS): The NIS is responsible for processing work permit applications and ensuring compliance with immigration regulations.

Different work visas/permits are available.

For a Work Visa, the below documents need to be completed:

  • Valid passport
  • Application form
  • Proof of qualifications/work experience
  • Official approval of the expatriate quota
  • Official job offer
  • Proof of funds
  • Application fees
  • Request for regularization from the employer
  • Employer’s business license.

For Work Permits

Temporary Work Permit (TWP): The Temporary Work Permit is the main category for foreign nationals engaging in short-term work assignments in Nigeria.

The STR visa is for foreign nationals intending to work in Nigeria for a long-term or extended period.

VAT

The standard rate of VAT in Nigeria is 7.50%.