Nigeria PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Nigeria without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Nigeria, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Nigeria labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Nigeria. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Nigeria - Country Overview
Nigeria is the largest economy (21st largest in the world) and the most populous country in Africa. It has an emerging market and a re-emergent manufacturing sector that caters to the demands of the West Africa subcontinent. Nigeria is largely dependent on its oil and natural gas exports for its economy, but the country encourages the inflow of foreign investments for industrial diversification. Foreign and domestic investors are treated equally, especially those companies are encouraged that are interested in joint ventures and long-term investment.
Hausa, Igbo, Yoruba, Urhobo
Federal Presidential Republic
Lagos, Benin City
Employment Contracts in Nigeria
The Labour Act makes it mandatory for employers to provide a written contract to employees, with all the important details of the employment, 3 months before their employment commencement date.
An employment contract may stipulate a probationary period, which may be extended. Except when it is an apprenticeship contract, any person under age 16 is not allowed to enter into an employment contract.
Working Hours in Nigeria
Regular work schedule is set by a mutual employer-employee agreement or with a collective bargaining agreement within an organization or industry.
The Labour Act prohibits children under age 16 from working more than 4 uninterrupted hours or more than 8 hours per day.
The weekly time off may be substituted with compensatory time off, in case circumstances do not permit a rest day in a particular week, within the following 14 days or the payment of overtime wages.
Employers must get an hour of rest after working 6 or more hours a day. Female workers are not allowed to engage in manual labor during night shifts. Minors are not allowed to work in night shifts.
The Labour Act of Nigeria does not specify a wage rate for overtime. Employment contracts or collective bargaining agreements establish the payment for overtime in the country.
Employee Leave in Nigeria
- Jan. 1: New Year’s Day
- Good Friday
- Easter Monday
- May 1: Worker’s Day
- May 29: Democracy Day
- Oct. 1: Nigerian National Day
- Dec. 25: Christmas Day
- Dec. 26: Boxing Day
In addition, the following Islamic holidays are also celebrated. Those dates vary every year:
- Eid al-Fitr
- Eid al-Adha
Employees working on a public holiday receive 200% of their usual pay. Public holidays falling on a weekend are not shifted to another date.
Employees are entitled to annual leave for a minimum of 6 working days at full pay after 12 months of uninterrupted service. Workers aged less than 16 years, including apprentices, must get fully paid annual leave of 12 working days.
Employees and employers may delay taking or granting accrued annual leave for up to 24 months, but employers are not allowed to pay remuneration in lieu of annual leave.
A pregnant employee gets 12 weeks of maternity leave which commences 6 weeks prior to her due date. If she has worked for the employer for 6 months or more before the beginning of her maternity leave, the employer is required to pay at the rate of 50% of her regular wages during maternity leave.
A pregnant employee is not allowed to work for 6 weeks after delivery. After returning to work, she gets an additional 30 minutes nursing time twice a day to feed or look after her child.
There is no provision for paternity leave in Nigeria.
An employee gets paid sick leave for 12 days per year, subject to certification by a health care provider.
An employee can take compassionate leave for certain events in the family such as the death of a loved one. The duration of absence will depend on the situation in question. The employer needs to continue paying the worker’s salary fully or partially in this period.
Employee Benefits in Nigeria
Pension & Social Security
There is no standard retirement age in Nigeria. The retirement age is determined by an individual worker’s terms and conditions of employment. However, if an employee retires before age 50, there will be a 6-month waiting period to commence benefits.
In the case of companies with 15 or more employees, the total social security pension contribution is 18% (10% for employers and 8% for employees) of the employee’s total earnings specified in the employment contract, shall not be less than a total sum of basic salary, housing allowance and transport allowance.
An employer may take full responsibility for the pension contribution. In such cases, the total contribution rate will be 20% of employees’ monthly earning.
Employers in Nigeria need to make a minimum contribution of monthly payroll’s 1% into the Employees’ Compensation Fund.
Employees or their survivors qualify to claim compensation from the fund in cases of a disease, death, injury, mental stress, disability and hearing problems that arise during employment. In addition to compensation, the fund provides rehabilitation, vocational and counseling services for injured employees.
Employers are required to provide a life insurance policy for each of their employees to guarantee a lump sum payment equaling 3 times the employee’s annual income or more.
Mandatory Health Insurance
Nigeria requires all employers to provide employees with an approved health insurance as part of its National Health Insurance Program. The plan guarantees employees with some minimum benefits and is regulated by the National Health Insurance Scheme (NHIS).
All employers in the organized private sector employing 10 or more workers are required to withhold contributions for National Health Insurance Scheme (NHIS) and make some additional contributions too.
Employers are required to contribute 10% of employee salary and withhold 5% of employee salary. Additional charges apply to employees who wish to get their spouse and up to 4 children enrolled in the scheme.