Employment Law

Employment Contract in Nigeria

In Nigeria, the law requires that all employees be provided with a formal employment contract. The contract should contain all details of the employment, such as wages/salary, sick leave, and termination/severance provisions. The official language of Nigeria is English, so contracts should generally be written in English and state the local currency, Nigerian Naira.

Working with our Nigeria PEO, Remoly's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Fixed Term

Indefinite

Working Hours in Nigeria

Although there are no state-mandated limits on working hours, most jobs have about 40 hours per week. All work performed outside of standard working hours shall be subject to overtime pay. Maximum working hours and overtime rates may be agreed in an individual employment contract or collective bargaining agreement (CBA), so may vary depending on the industry and role.

Holiday Policy

Nigeria Vacation

Employees who have worked in Nigeria for at least 12 months are legally entitled to at least 6 days of paid annual leave. Some employers may choose to offer more, with a higher 12-day allowance for workers under 16 years of age.

Nigeria Sick Leave

Employees in Nigeria are entitled to at least 12 days of paid sick leave per year. Some employers may choose to offer additional benefits as part of their benefits package.

Parental Leave in Nigeria

Female employees in Nigeria are entitled to 12 weeks of paid maternity leave, of which 6 weeks are available before the birth of the child. Generally, fathers are not entitled to paternity leave, but Enugu (three weeks) and Lagos (two weeks) regions do provide allowances.

Dismissal and Severance in Nigeria

In Nigeria, both employer and employee can terminate an employment contract at any time, similar to the "at will" system in the United States. However, in practice you should always provide a notice period and allow for some negotiation.

In Nigeria, employees have no legal right to receive severance pay.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Nigeria PEOs can reduce risk for foreign companies and provide guidance along the way.  

Nigerian Taxation

Employers and employees in Nigeria are required to contribute a certain amount to pension schemes, with employers contributing at least 10% and employees at least 8%. Most employees (those earning more than 30,000 naira per year) must also contribute 2.5% to the National Housing Fund.

Income tax in Nigeria follows a progressive model, with rates ranging from 7% to 24% depending on income level.

Nigeria’s corporate tax rate is 30% for most companies.

Health Insurance in Nigeria

Nigeria has a nationalized health service, so workers are covered and employers are not required to provide insurance. However, some organizations do choose to offer private health insurance as part of their benefits package.

Salary and Benefits

Compensation Law in Nigeria

As of 2020, the national minimum wage in Nigeria is 30,000 Naira per month (based on 40 hours of full-time work per week).

Welfare Administration in Nigeria

Benefits packages in Nigeria may include health insurance, pension contributions, company cars, and more. As an independent organization, setting up and running a benefits system for Nigerian employees can be difficult, and you'll need to familiarize yourself with the country's customs and labor laws, which vary from state to state. The process can take surprisingly long to set up, so professional advice may be needed.