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Hire Employees In Nigeria

Updated on:
16 Jan, 2024
EOR in 
Nigeria
Monthly
Annually
(Save upto 15%)
$
169
/month
(billed monthly)
Start Hiring NowOffer banner
Employ contractors and employees in 160+ countries
Get started
Employ contractors and employees in 160+ countries
EOR in 
Nigeria
Offer banner
$
169
/month
(billed annually)
$
199
/month
(billed monthly)

Table of Content

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Nigeria has the biggest economy and population on the African continent, with a predicted economic expansion rate of 3.4% during 2023 and 2025. Major progress has been accomplished in agriculture and services in the past few years, with expanded possibilities for government growth expenditures. 

Want to hire in Nigeria? There are a few things you should keep in mind. Nigeria's official currency is the Nigerian naira (NGN), and English is the nation's native language. 

Moreover, no law in Nigeria requires severance pay since it is usually part of an employer and employee agreement. 

Before you hire employees in Nigeria, employers must follow all labor laws and regulations established by the authorities of the nation.

Labor Laws In Nigeria

To hire in Nigeria, employers must have a comprehensive understanding of the labor laws. Below are some of the most important labor laws governing the employee-employer relationship in Nigeria.

Working Hours

Conditions of Service 

  • The conditions of employment are set per the Nigerian Labor Act.
  • It states that employment conditions shall be per the law and with any local or national collective agreements for the time being in force.

Equality 

  • Article 31 (E) of the Gender Equity and Equality Act states that a woman has equal rights to employment opportunities and work in all sectors of the economy as of a man. 
  • It also includes equal remuneration, benefits, and equal evaluation of work treatment. 

Minimum Wage 

Statutory Benefits 

  • Beyond the minimum wage, every employee is entitled to statutory benefits in Nigeria. It includes paid and sick leave, medical insurance, and other social security perks.

Health and Safety 

  • The Factories Act of 2004 lays down all Nigerian workers' health, safety, and welfare guidelines. 
  • It clearly states that no person should be employed at any machine or in any process that carries the potential to cause injury. 

Termination 

  • The termination procedure usually varies depending on the type of contract or the ground for termination.

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Payroll and Taxes in Nigeria

Navigating taxes and payroll in Nigeria requires a good understanding of the applicable laws and regulations. Mentioned below are a few examples of the same.

Tax Rates

  • Pay-As-you-Earn, also referred to as PAYE, is a unique system adopted by Nigeria to calculate employees' income tax. 
  • The tax rate progresses from 7%-24% of taxable income. The approximate tax income band falls from NGN 300,000 to NGN 3.2 million per year.

Employee Benefits In Nigeria

If you want to hire in Nigeria, you should be familiar with employee benefits because they serve as an important component of the total remuneration package offered by employers. These perks directly improve employees' workplace satisfaction and health, assisting businesses in attracting and retaining talent. 

Leave Policy in Nigeria

You can check the leave policy in Nigeria the employees are eligible to receive the following:

Annual Leaves

  • Nigerian employees are eligible for six days of paid annual leave, provided they have been working for at least 12 months.

Sick Leaves

  • Every year, 12 days of paid sick leave is granted to every Nigerian employee.
  • Employees have to present a medical certificate after two days of absence. 

Maternity Leave

  • Pregnant employees are entitled to 12 weeks of paid maternity leave in Nigeria.
  • 6 weeks post-delivery, 6 weeks pre-delivery with a medical certificate.
  • The certificate must confirm the expected delivery within 6 weeks.

Paternity Leave

  • There is no statutory paternity leave in Nigeria. 
  • Employees working in federal civil service are eligible for two weeks of paternity leave.

Notice Period

  • An employee's notice period in Nigeria is directly influenced by the number of days they have worked.
Duration of Employment Notice Period Duration
Three months or less One day
More than three months but less than two years One week
Two years but less than five years Two weeks
Five years or more One month

Severance Pay

  • Currently, there is no official severance pay issued by the government of Nigeria for its employees. 
  • It entirely depends on the employee-employer agreement or collective agreement of employees.

Probation Period

  • There is no probation period in Nigeria.

Cost of Hiring an Employee in Nigeria

To successfully hire employees in Nigeria, it becomes crucial to understand the cost involved. While the Netherlands offers a robust workforce and an attractive business climate, it's essential to assess the financial implications of hiring carefully.

Establishing a Subsidiary vs. Employer of Record (EOR) in Nigeria

Criteria Establishing a subsidiary Partnering with Skuad
Initial Cost Have high costs, including setup fees, legal costs, and others. Drastically low costs due to Skuad’s established presence.
Duration for setup Longer procedure to fully establish and operationalize. With Skuad, companies can start hiring in Nigeria within days.
Employment liabilities Subsidiaries and parent companies are responsible for employment liabilities. Skuad takes over the employment liabilities, lowering risks.
Operational overhead High overhead costs including HR, payroll, tax compliance, etc. Skuad manages HR, payroll, and compliance, lowering operational costs.
Flexibility It is less flexible and requires a long-term commitment. Good option for short-term or trial projects due to its high flexibility.
Local compliance The subsidiary is responsible for ensuring labor laws are followed. With a team of experts, Skuad handles all regulatory intricacies.
Criteria Partnering with Skuad Establishing a subsidiary
Initial Cost Drastically low costs due to Skuad’s established presence. Have high costs, including setup fees, legal costs, and others.
Duration for setup With Skuad, companies can start hiring in Nigeria within days. Longer procedure to fully establish and operationalize.
Employment liabilities Skuad takes over the employment liabilities, lowering risks. Subsidiaries and parent companies are responsible for employment liabilities.
Operational overhead Skuad manages HR, payroll, and compliance, lowering operational costs. High overhead costs including HR, payroll, tax compliance, etc.
Flexibility Good option for short-term or trial projects due to its high flexibility. It is less flexible and requires a long-term commitment.
Local compliance With a team of experts, Skuad handles all regulatory intricacies. The subsidiary is responsible for ensuring labor laws are followed.

While establishing a subsidiary in Nigeria can give you more control over the operations, it adds up to your existing hiring costs. However, an Employer of Record like Skuad reduces your cost of hiring in Nigeria. It also makes sure that you remain compliant with Nigerian labor law.

Top Job Listing Sites in Nigeria

With Skuad, you can tap into a network of skilled professionals efficiently, ensure a seamless hiring process, and empower your business to build a strong and diverse team in Nigeria. Our dedicated team understands all the nuances of the local Nigerian market, offering valuable insights into cultural dynamics and industry specifics. 

Other platforms that can help you acquire new talent in Nigeria include:

  • Jobberman - With an audience of over 600,000 job seekers, Jobberman is currently the leading job board in Nigeria. Apart from job postings, Jobberman also provides a wide range of other HR services. 
  • Indeed - Another global board in Nigeria is Indeed, which offers both paid and free job postings.
  • Glassdoor - Other than company reviews, Glassdoor is also known to provide free and premium job listings to individuals who wish to source talent from various countries. 
  • Snaphunt - One of the best features of this global platform is that it enables employers to search for candidates by city, country, region, or time zone. It is currently one of the leading global hiring platforms in Nigeria.
  • Joblist Nigeria - With over 500,000+ active users, Joblist Nigeria features job advertisements and is a leading provider of recruitment sources, aiming to connect individuals to different organizations.

Compliance Risks of Hiring Employees in Nigeria

Hiring employees in Nigeria comes alongside compliance risks that businesses must be aware of. One significant aspect is the legal and regulatory framework governing employment in the country. Nigerian labor laws can be intricate, and non-compliance may lead to penalties or legal consequences.

On that note, some compliance risks that you need to consider when hiring in Nigeria include,

  • Employment Contracts - It is paramount for every business or employer to ensure that they have clear and comprehensive employment contracts that comply with Nigerian labor laws. Failure to do the same can lead to serious legal repercussions.
  • Minimum Wage Requirements - Nigeria has a monthly minimum wage requirement of NGN 30,000. Non-compliance with minimum wage regulations can lead to fines and other penalties.
  • Health and Safety Standards - Employers must also comply with safety and health requirements to offer their employees a secure place to work. Failing to comply with this may result in legal proceedings and workplace harm or accident claims for compensation.
  • Employee Benefits - Ensure that you are providing the mandatory employee benefits in Nigeria as required by law, which include sick leaves and severance pay, among others. 

How to Hire Talent in Nigeria

Hiring talent in Nigeria can be approached through various methods, each with its own considerations. A few examples include,

Option 1: Establish a Subsidiary

  • By setting up a subsidiary in Nigeria, you will have complete control over the business operations and hiring.
  • A subsidiary provides a long-term presence in the country, which can especially benefit strategic growth.
  • Establishing a subsidiary involves significant legal and regulatory requirements, which can be extremely time-consuming and costly.

Option 2: Hire As A Contractor

  • Contrary to the practice of hiring full-time employees, enterprises can enjoy enough flexibility by following this method, especially for short-term projects.
  • It is usually much quicker and simpler than establishing a subsidiary.
  • There may be challenges in maintaining a cohesive company culture among contractors.

Option 3: Partner with an Employer of Record (EOR) - Skuad

  • By partnering with an EOR such as Skuad, you streamline the hiring process, handling administrative tasks, payroll, and compliance.
  • Reduced liabilities and ensure
  •  compliance with local labor laws.

Hiring Trends in Nigeria in 2023

Nigeria’s business landscape is evolving rapidly, keeping up with the latest global trends and practices. With the growing young workforce, there has been a complete demographic shift. Organizations are now focusing on talent acquisition and seeking ways to retain employees. Two of the major hiring trends in this aspect include

Remote Work and Flexibility: With the advent of the Covid-19 pandemic, there has been a significant acceleration in the adoption of remote work. Nigeria is no exception to it, either. Many Nigerian companies are now embracing flexible work arrangements.

Technological Advancements: The rapid utilization of AI (Artificial Intelligence), especially in hiring, is another significant trend. Thanks to AI, these have become much more efficient and effective, from analyzing candidate profiles to assessing competency and designing targeted training programs.

Hiring in Nigeria, made hassle-free with Skuad

Partnering with Skuad can help you simplify the hiring process by providing comprehensive services, especially when dealing with the complexities of hiring in a foreign market. 

Skuad offers many services tailored to your hiring needs in Nigeria, from payroll management to compliance assurance and workforce mobility. Book a demo with Skuad!

FAQs

What is the difference between an employee and an independent contractor in Nigeria?

An employee is often directed and controlled by the employer. In this instance, the employer can dictate how, where, and when the task is completed. A self-employed contractor, on the other hand, provides paid work to other people. This implies they are not entitled to the same benefits as employees, such as paid time off, sick leave, or a basic salary.

How do I hire employees in another country?

There are typically three main ways of hiring employees in another country. Those include setting up a legal entity in a foreign land where you wish to hire workers, collaborating with an EOR to employ workers on your behalf, and hiring international contractors to work on specific projects or for a specific time frame.

What are the rights of employees in Nigeria?

Employees in Nigeria are entitled to various rights and protections under labor laws. This includes minimum wage, leave entitlement, health and safety, equal opportunities and non-discrimination, and termination rights. 

limited-offer-banner
EOR in 
Nigeria
Monthly
Annually
(Save upto 15%)
$
169
/month
(billed annually)
Start Hiring Now

Employ contractors and employees in 160+ countries

Get started
limited-offer-banner
EOR in 
Nigeria
$
169
/month
(billed annually)
$
199
/month
(billed monthly)

Employ contractors and employees in 160+ countries

Table of Content

Building a remote team?

Employ exceptional talent, anywhere, anytime!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Looking to hire employees and contractors in Nigeria? Skuad's EOR platform can help!

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