Countrypedia · Africa
Hiring in Nigeria
A practical guide to employing staff in Nigeria — contracts, leave, termination, payroll and employer costs, including the new personal income tax regime from 2026.
Employment contracts
Under the Labour Act, employers must give a written statement of terms within 3 months of starting. In practice, written contracts are issued on day one. The Labour Act mainly protects “workers” in manual and clerical roles; managerial staff rely largely on their contracts.
- Probation is contractual (commonly 3–6 months).
- Expatriates need an expatriate quota approval and a work permit (CERPAC / residence permit).
- Employers with 5 or more employees must register with the Industrial Training Fund.
Working hours
| Standard hours | Set by contract — typically 40 hours a week (8 hours a day, Monday to Friday) |
|---|---|
| Overtime | Paid as agreed in the contract or collective agreement |
| Rest | At least one day of rest per week |
Minimum wage
| National minimum wage | ₦70,000 per month (Minimum Wage Amendment Act 2024) |
|---|---|
| Tax exemption | Employees earning no more than the minimum wage are exempt from PAYE |
Leave and holidays
| Annual leave | At least 6 working days after 12 months’ continuous service (Labour Act); 15–20 days is market practice |
|---|---|
| Sick leave | Up to 12 working days a year on full pay, with a medical certificate |
| Maternity | 12 weeks under the Labour Act with at least 50% pay; 16 weeks on full pay is common practice and applies in the public sector |
| Paternity | Not statutory in the private sector (14 days in the federal public sector) |
| Public holidays | Around 12 days a year, including Muslim and Christian holidays |
Notice and termination
| Notice (Labour Act) | 1 day (up to 3 months’ service), 1 week (3 months – 2 years), 2 weeks (2–5 years), 1 month (5 years or more); contracts usually provide longer notice |
|---|---|
| Pay in lieu | Allowed |
| Redundancy | Employers must inform the trade union, apply “last in, first out” where possible, and negotiate redundancy pay |
| Fair procedure | The National Industrial Court increasingly requires a valid reason and fair hearing, in line with ILO standards |
Payroll and employer costs
PAYE is remitted monthly to the State Internal Revenue Service of the state where the employee lives, by the 10th of the following month.
| Pension (Contributory Pension Scheme) | Employer 10% + employee 8% of basic, housing and transport allowances (3+ employees) |
|---|---|
| NSITF (employee compensation) | 1% of payroll, paid by the employer |
| ITF | 1% of payroll (5+ employees or turnover above ₦50 million) |
| National Housing Fund | 2.5% of basic salary, deducted from the employee |
Personal income tax from 1 January 2026 (Nigeria Tax Act 2025)
| First ₦800,000 | 0% |
|---|---|
| Next ₦2,200,000 (to ₦3 million) | 15% |
| Next ₦9,000,000 (to ₦12 million) | 18% |
| Next ₦13,000,000 (to ₦25 million) | 21% |
| Next ₦25,000,000 (to ₦50 million) | 23% |
| Above ₦50 million | 25% |
The old Consolidated Relief Allowance has been replaced by a rent relief of 20% of annual rent, up to ₦500,000.
Benefits and practice
- A 13th-month salary is common but not statutory.
- Group life insurance is mandatory for employees under the Pension Reform Act.
- Health insurance (HMO cover) and housing and transport allowances are standard parts of the pay package.
Hire in Nigeria with Truerix
Truerix employs your Nigerian staff through our own local entity — compliant contracts, PAYE under the new tax law, pension remittances, NHF, NSITF and ITF handled for you.
Sources: PwC Tax Summaries – Nigeria personal income tax · PaySpace – Nigeria tax reform 2026 · National Pension Commission (PenCom) · Industrial Training Fund