Employer of Record in Nigeria
Skuad’s Nigeria Employer of Record (EOR) solutions include a gamut of services for companies who wish to recruit employees and run payroll, despite not having an office or subsidiary in the country. The recruitment process is carried out by the EOR service in Nigeria as per the local laws.
With Skuad’s EOR service, organizations can hire and onboard their preferred candidates while complying with the Nigerian employment laws. If you are planning to tap into expansion opportunities in Nigeria at the right time, Skuad can help you. Our high-tech, centralized human resource (HR) platform and extensive network of professionals in over 150 countries can help kick-start your expansion journey. Talk to a Skuad expert and book a demo today.
Nigeria at a Glance
Population: 206 million people (2020)
Currency: Nigerian Naira (NGN)
Languages: English, Yoruba, Igbo, Fula, and Hausa
Gross Domestic Product (GDP): USD 400 billion (2020)
Talk to us to know more about doing business in Nigeria.
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Employment in Nigeria
Nigeria Labor Laws
Nigerian labor laws cover the conditions of work, the rights, the minimum wages, the clauses of termination, and other rules set by the Nigerian government. There are three main laws related to employment, as follows:
- Nigeria Labor Act
- Employee’s Compensation Act
- Trade Union Act
The main entitlements afforded to employees are tabulated below.
||The statutory working hours are not defined by law. However, the common workweek is 40 hours with eight hours a day.
In Nigeria, employees are granted one weekly rest day of not less than 24 hours after six continuous working days.
Weekly rest days are paid, and employees must not work on weekly rest days. If an employee has to work on weekly rest days, an additional day off or monetary compensation is provided.
||There are three types of employment contracts in Nigeria.
- Employment that is governed by statute
- Employment that is established through a written contract of employment
- Employment at will; servant holding an office at the pleasure of the employer; master and servant relationship
- New Year’s Day
- Good Friday
- Easter Monday
- Labor Day
- Eid al-Fitr
- Democracy Day
- Eid al-Adha
- Nigerian Independence Day
- Prophet’s Birthday (Mawlid)
- Christmas Day
- Boxing Day
||The Government of Nigeria mandates the minimum wage.
No Employer in Nigeria is to pay less than the minimum wage, otherwise, it may be punishable by the Government of Nigeria.
In 2020, the minimum wage for Nigerian federal employees reached NGN 30,000 equivalent to approximately USD 77.
Employees are entitled to paid annual leave of six days for every one year of employment.
It is mandatory to provide 12 days of paid sick leave. However, after the first two days, employees must provide a medical certificate.
||Female employees are entitled to 16 weeks of maternity leave at full pay if they are employed in the public sector and 12 weeks of maternity leave (six weeks before and after childbirth, each) if employed in the private sector at 50% of pay. The remuneration can be increased to full pay by contract.
Female employees are also given half an hour twice a day for nursing their infants.
Paid paternity leave is available in Lagos and Enugu for two weeks and three weeks, respectively.
Avail yourself of Skuad’s EOR solution for Nigeria; talk to Skuad experts today. We ensure to expedite your expansion efforts while adhering to the employment laws perfectly.
Contractors vs. Full-time Employees
Employment contracts in Nigeria are usually indefinite. However, fixed-term contracts are also permitted, provided they specify all the terms of employment. Contracts are in the written form and must be signed by both parties, namely, the employer and the employee, to be legally binding. Employment contracts should contain the following terms.
- The name(s) of the employer(s)
- The name, address, and personal details of the employee
- The employee’s position and date of joining the organization
- A description of the nature of the employment (fixed-term or full-time)
- The date of expiry, if applicable, as in the case of a fixed-term contract
- The notice period in the case of termination
- Key details regarding wages, such as the amount, calculation, and frequency of payment
- The work hours, the sick leaves due, the conditions for incapacity, and the holiday pay
- Any other special conditions related to employment
Advantages of Hiring Contractors
- Flexibility: Since contractors are hired on a short-term basis, you are free to determine the scope of their work temporarily. If new needs arise, new contracts can be drafted in the short term.
- Independence: Short-term contractors usually work independently and according to their own timeline. They do not require close supervision, and your resources can be transferred elsewhere, as needed.
- Cost: Hiring contractors may be cheaper in the long run although their individual rates are higher than those of full-time employees. This is because such employees are not entitled to employment benefits, such as bonuses and tax compensations.
Advantages of Hiring Full-time Employees
- Loyalty and organizational commitment: Full-time employees are likely to be more loyal as they exclusively work for your company. As their individual success depends on the performance of your firm, they are likely to invest more effort into their work.
- Knowledge: All employees undergo training when they join a firm. The skills and knowledge gained by a full-time employee, however, stay within the organization.
- Legal freedom: Since full-time employees are defined as such in their contracts from the outset, misclassifications and the repercussions thereof can be avoided completely. When hiring full-time employees, you determine the terms of the contract and entitlements, and these are not liable to change unless mutually decided by both parties.
Skuad’s high-tech, centralized HR platform can help you hire employees for expansion in Nigeria, whether you require full-time or contract-based workers. Talk to a Skuad expert and book a demo today.
Hiring in Nigeria
Several laws of Nigeria prevent discriminatory practices in the workplace and beyond. The constitution prohibits discrimination on grounds of religion, status, sex, origin, linguistic association, and union membership. So, no questions of a discriminatory nature can be asked during hiring.
Work contracts must include details of place of work, duties, hours of work, and holidays. Employees must receive their contract within three months of their starting date along with compensation, benefits, and details of termination. The compensation must be written in NGN.
There are two broad categories of employees in Nigeria: (a) those who perform manual or clerical work, and (b) those who do administrative, executive, technical, or professional work. The Labor Act applies only to the first group of employees who handle manual or clerical work. Non-workers are typically governed by their employment contracts.
In Nigeria, employers use job websites and portals to find the right talent.
Under legislation passed in 2004, every employee is entitled to 21 days of leave after 12 months of continuous service, and in the case of people under 16 years of age, the entitlement is 12 leave days. The exception to this rule is in the case in which an employer and employee agree to extend the period of entitled leave from 12 months to 24 months, but no more than that.
Employees also have up to 12 days of paid sick leave per year in which an employee is allowed absence from their job as long as a registered medical practitioner certifies the illness. A woman also has the right to maternity leave as long as she provides a written medical certificate from a medical doctor stating that she should not or cannot work. The medical certificate allows a woman to not work for approximately six weeks before and six weeks after the birth of her baby. She is also owed at least 50% of her normal wages as long as she has been employed for six months.
Ways to Recruit Nigerian Employees
The primary means of recruiting from Nigeria is formulating a contract that is both oral and written. Skuad recommends that a written contract should be drafted in the local language and should outline everything from remuneration to legal benefits and even termination. All agreements and offer letters should be made in the local currency.
No specific laws limit or restrict employers from advertising positions. Background checks by employers can include criminal records, medical history, drug screening, credit checks, immigration status, and social media.
Working with Skuad’s global HR platform means you can use our contract template instead of drafting your own. We will manage your recruitment and hiring process, help you stay compliant with the local laws, and save you time. To learn more, book a demo with Skuad experts today.
Probation & Termination
Labor Act does not have any specific terms for probation periods. Nevertheless, Section 7(1) of the Act is is connected to probation:
- This section holds that an employment contract is required to be provided within three months from the commencement of employment of the employee in the organization.
- This duration of three months is taken as a probation period under the norms of employment in Nigeria.
- The law, however, does not spell out a maximum period of probation. As seen in practice, the probation period for employees is between three and six months.
- Wherever the period of the probation is expressed in the employment contract, the law defines it as the employment of special condition, or it is treated as an agreement the parties hold between themselves.
The Labor Act of 2004 allows for a few different ways in which employees can be dismissed. It can be,
- In the event of the death of an employee
- By the expiry of a fixed-term contract
- By a notice given by either party
Employees can also be terminated if it is found that their role in the organization is redundant. Such terminations can be done in two ways:
To ensure your expansion endeavors adhere to the laws regarding probation and termination in Nigeria, talk to Skuad experts and book a demo today.
EOR Solutions in Nigeria
Business expansion is a long-drawn process that calls for extensive planning, especially when expanding to a foreign country. It is complicated and can take up to several months to complete but by choosing the EOR route for hiring employees in Nigeria, you can fast-track the expansion process.
Employer of Record Nigeria solutions by Skuad can make expansion to Nigeria much simpler and a lot quicker for business. Our global outreach and a tech-enriched HR platform ensure compliance with local labor laws by managing employment responsibilities such as monthly payroll, work permits, employment contracts as well as taxation for your employees in Nigeria.
Payroll Outsourcing in Nigeria through an Employer of Record
The greatest benefit of working with an EOR service is that you can focus on growing your company while your EOR partner takes care of the rest. Skuad can make sure each of your employees has a positive hiring experience.
Since we take over all the HR-related processes, including hiring, payroll, taxation, and securing visas and work permits for your employees, you’ll be able to focus on the business side of things. Further, you won’t have to worry about contravening any of the Nigerian employment laws. To avail yourself of our bespoke Nigeria EOR solution, talk to us!
Types of Visas in Nigeria
There are four primary types of visas offered in Nigeria.
- Tourist visa
- Business visa
- Temporary work permit
- Subject to Regularization (STR) visa
Further, there are a few other visas, including those for transit and diplomatic visits. All these visas are issued to allow entry into Nigeria, and they’re all valid for three months.
Foreign citizens who plan to take up employment in Nigeria will need to obtain an STR visa. However, this visa alone does not give the holder the legal right to work in Nigeria. To do so, they will also need to obtain a Combined Expatriate Residence Permit and Aliens Card, or CERPAC, which is a combined permit for residency and work in Nigeria.
To live and work in Nigeria, employees will need to start by obtaining an STR visa. The following documents are required.
- An application from the employer sponsoring in the country of Nigeria
- A passport with at least two blank pages as well as the validity of six months
- Evidence of satisfactory financial means
- Passport size photos at least 2 in number
- A Visa application form which is completed
- A job offer from a company located in Nigeria as well as an acceptance letter from the employee
- The employee’s curriculum vitae (CV) as well as appropriate educational qualifications
- Approval of Expatriate quota
To get a CERPAC card, applicants are required to present the following documents.
- Application letter from the employer in Nigeria allowing Immigration Responsibility and asking that the stay of the employees be regularized
- An offer letter and acceptance of it
- Application form which is completed
- Verification of expatriate quota consent
- Passport size photos 3 numbers
- The passport of the applicant showing STR visa endorsement
- A permit for business
- Evidence of payment for all applicable fees
Skuad’s Nigeria EOR solution can take care of work visas and other HR-related tasks for you. Talk to us to learn more.
What are Nigerian Work Permits?
As in any other country, non-Nigerians that desire to enter, work, and reside in Nigeria have to comply with the immigration requirements of the country. The Immigration Act 2015 and the Immigration Regulations 2017 provide the framework for non-Nigerians who want to enter the country for all purposes and intents.
Excepting the tourists, maximum expatriates migrate to Nigeria essentially for work purposes. The method of getting visas, work, or residence permits, hence, normally begins with their employers. So the first point is to apply for the award of an Expatriate Quota. Thus, foreigners who plan to build a business, a profession, or even a trade in Nigeria must get a permit for the business.
||The Ministry of Interior Affairs issues this permit whereby it allows the company that is registered in Nigeria to hire expatriates. |
An Expatriate Quota is conferred for a term extending between two to three years at the consideration of the Ministry but is subject to renewal on expiry.
The issue of the quota is to the company and not to the expatriate (ex-pat).
|Temporary Work Permit (TWP)
||It is a visa that is single entry and is suitable for expatriates or foreign business people intending to carry out work that is short-term in Nigeria. |
This applies to ex-pats requested by corporate bodies to take specialized skilled services, namely repair of equipment, installation, maintenance, and coaching or training for Nigerian staff.
It is granted for two months and extended up to six months in phases.
Its application is made by a corporate representative in Nigeria, who files a legal request to the Comptroller General of Immigration (CGI), on the behalf of an expatriate, including the following.
- The name and nationality of the applicant
- The passport number
- The job's nature, performed by an expert of a specialized and temporary nature
- It is available to foreign travelers who intend to visit Nigeria for training, conferences, meetings, trade fairs, seminars, or for other short business activities.
- It can be obtained from Nigerian Missions overseas but also through the Visa on Arrival (VoA) route for urgent business travels and due to time constraints or the lack of a Nigerian Mission in the country of the applicant.
- The Business Visa holders cannot be employed in Nigeria as the visa includes only short-term commitments in Nigeria
- It is valid for 90 days.
| Subject To Regularization Visa (STR)
It applies to expatriates holding long-term employment in Nigeria or who want to stay in Nigeria for purposes other than the short-term. |
The expat's dependents can apply for an STR visa valid for 90 days. Here, an application is made to the CGI, to approve the stay of the considered employee.
Again, the person may get employment when the application is accepted and a grant of Residence Work Permit is made.
Securing a Nigerian Work Permit through Skuad
Skuad’s extensive EOR services include sponsoring work permits. We have comprehensive knowledge of the local laws about work permits.
Immigration laws are revised regularly, so you may find it difficult to keep up with the latest developments. We have expertise in Nigeria’s immigration policies to ensure you receive up-to-date, accurate information. Talk to us today to learn more.
Payroll & Taxes in Nigeria
Taxes in Nigeria
The tax period in Nigeria is from January 1 to December 31.
The companies are expected to register with tax authorities as well as get TIN (Taxpayer Identification Numbers). The registration method takes about two to three weeks.
The amount due for every month shall be deducted on the last day of the concerned month.
Taxation in Nigeria
|Social Security contribution by employers
For residents: 10%
For non-residents: 10% (can be reduced to 7.5%)
|Capital gains tax
||Between 5 to 60%
||7% to 24%
|Up to NGN 300,000
|300,000 - 600,000
|6,00,000 - 1,100,000
|1,100,000 - 1,600,000
|1,600,000 - 3,200,000
|Over 3, 200,000
|Social Security contribution by employees
Income tax returns
||Yes, income tax returns must be filed.
Value-added tax (VAT)
Bonuses are customary and are frequently awarded in December, but they are not required.
Payroll Options in Nigeria
Nigeria has two options for payroll.
||For payroll in another country, you can add employees in Nigeria to make a centralized payroll.
||You can create an internal payroll for large companies and a well-staffed HR department.
|Outsourced to a local company
||The outsourced body shall be responsible for generating and executing payroll.
|Outsourced to a global company
||This is an option for the better management of payroll through global HR service providers, such as Skuad.
Skuad’s EOR services handle all HR-related functions including payroll and taxation. Get in touch with Skuad experts to learn more!
Incorporation: How to Set Up a Subsidiary in Nigeria
The process of registering a subsidiary company in Nigeria is started by a holding company. A holding company is a parent company owning more than 50% shares in another company (subsidiary) to control its policies and management. It is a separate legal business entity registered with the Corporate Affairs Commission (CAC). It keeps its own financial records, bank accounts, assets, and liabilities.
A foreign company already incorporated overseas and willing to operate in Nigeria can also incorporate a branch or subsidiary of the parent company in Nigeria.
A subsidiary company is a corporate structure with a separate legal personality status. It is statutorily regulated and incorporated under the Companies and Allied Matters Act (CAMA), which is the law that regulates the incorporation of companies in Nigeria.
It is worthy to note that a subsidiary company cannot be registered where no holding company is in existence.
Requirements to Register a Subsidiary in Nigeria
- Firstly, picking two appropriate proposed names for the company. Then, check with the CAC online portal to obtain the information as to whether the name is available and not in use.
- Provide the objectives of the company.
- The principal address registered for the subsidiary company should be given.
- Then, details of the parent company or the holding company also must be given.
- The formula for share capital as well as shareholding among investors is required.
- The details of at least one director, including the email, address, international passport, phone number as well as a signature, is to be uploaded to the registration portal.
- The parent or holding company resolution which is approving the registration of the subsidiary company is required to be provided.
- The Memorandum of Association (MoA) of the company to be is required to be registered as well as provided in draft format by a legal expert or lawyer.
- Copy of the certificate of incorporation of the holding company is required to be given
Skuad offers services for the incorporation of your subsidiary, and you can benefit from our industry expertise to expedite your expansion in Nigeria. Talk to our experts to book a demo.
Professional Employer Organization (PEO)
A professional employer organization (PEO) enters into a co-relationship with employers by providing them with employees. This allows the PEO to share and manage many employee-related responsibilities and liabilities.
Further, employers can outsource their human resource functions, including taxes, payroll, hiring and onboarding, compensation, termination, and severance. However, as a PEO is only a co-employer, it does not handle the liabilities and compliance-related issues.
On the other hand, an EOR service is provided by organizations that take over the legal responsibilities of employment to decrease complexities associated with HR functions, market access, and paying employees internationally. The EOR firm becomes the primary legal employer of their partner organization’s employees on paper. It is in charge of all the liabilities.
A PEO is useful when a foreign company already has an entity established in the country. However, an EOR is more suited to the needs of an employer who wishes to hire employees in a country without a pre-existing subsidiary established.
Skuad offers both EOR and PEO services. Depending on your requirements, you can benefit from our industry expertise by hiring a PEO or EOR solution to expedite your expansion in Nigeria. Talk to Skuad experts to book a demo.
Conclusion: What Gives Skuad’s Nigeria Solutions an Edge?
There are a plethora of EOR services offered by Skuad to kick-start your business in Nigeria. Skuad’s extensive knowledge of the local laws, language, customs, and market will ensure your expansion process is carried out without a hitch while adhering to Nigeria labor laws. By taking over all your HR-related tasks, we can save you time, labor, and resources, which will let you better focus on the business side of expansion.
Skuad has an extensive network in 150+ countries across the globe and provides a single interface to onboard and manage employees and contractors. It offers consistent prices irrespective of the location and manages the payment of your team through a single invoice. Talk to Skuad experts today to learn more.