Nigeria Employment Law & Compliance Guide for Employers
Key employment laws in Nigeria: what employers need to know
Employment in Nigeria is governed mainly by the Labour Act (Cap L1, 2004), the National Minimum Wage Act as amended in 2024, the Pension Reform Act 2014 and, from 1 January 2026, the Nigeria Tax Act 2025. Foreign employers are often surprised by how much is left to the contract: the Labour Act sets few rules on hours or overtime, while pension, PAYE in each state and expatriate quota approvals are strictly enforced. This page summarises the core employer rules for 2026, with sources for each fact.
Nigeria employment rules at a glance
| Topic | What the rule is | Official source |
|---|---|---|
| Minimum wage | NGN 70,000 a month under the National Minimum Wage (Amendment) Act 2024, signed on 29 July 2024. No increase had been enacted as of October 2026, although labour unions were pressing for a review. | Channels Television – Minimum wage remains NGN 70,000 (9 October 2026) |
| Standard working hours | No statutory working week: normal hours are set by agreement or collective bargaining (Labour Act, s.13). A working day of 6 hours or more needs at least 1 hour of rest breaks, and workers get 1 rest day of 24 hours in every 7. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Overtime pay | No statutory overtime premium. Hours beyond normal hours are overtime, paid at the rate agreed in the contract or collective agreement (Labour Act, s.13), so state the rate in writing. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Paid annual leave | At least 6 working days of paid leave after 12 months' continuous service (12 for workers under 16) (Labour Act, s.18). Leave may be deferred by agreement, but not beyond 24 months' service, and cannot be replaced by pay while employment continues. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Public holidays | Declared each year by the Federal Government through the Ministry of Interior. They include New Year, Good Friday, Easter Monday, Workers' Day, Democracy Day (12 June), Independence Day (1 October), Christmas, Boxing Day and the Eid holidays. | Federal Ministry of Interior – Public holiday press releases (official) |
| Sick leave | Up to 12 working days of paid sick leave a year for temporary illness certified by a registered medical practitioner (Labour Act, s.16). Contracts and collective agreements can give more. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Maternity and parental leave | 12 weeks: up to 6 weeks before and 6 weeks after confinement, paid at no less than 50% of wages after 6 months' service, plus two 30-minute nursing breaks a day (Labour Act, s.54). The Act has no paternity leave. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Probation period | No statutory maximum in the Labour Act. State the probation length, and the notice that applies during probation, in the contract or written statement of terms. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Notice period | Labour Act minimums: 1 day (up to 3 months' service), 1 week (3 months–2 years), 2 weeks (2–5 years), 1 month (5 years or more). Notice of a week or more must be written; pay in lieu is allowed. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Severance pay | No statutory severance. For redundancy, the employer must inform the union, apply last-in-first-out subject to skill and merit, and use its best endeavours to negotiate redundancy pay (Labour Act, s.20). Contracts and collective agreements often set terminal benefits. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Employer social contributions | Pension at least 10% of monthly emoluments (basic + housing + transport), NSITF employee compensation 1% of payroll, ITF 1% of annual payroll (5+ staff or NGN 50m turnover) and group life cover of at least 3x annual pay. Total about 12% plus insurance. | PwC Worldwide Tax Summaries – Nigeria, corporate other taxes (professional source) |
| Employee social contributions | Pension at least 8% of monthly emoluments (basic + housing + transport). The National Housing Fund (2.5% of monthly income) is no longer compulsory for private-sector employees. | PwC Worldwide Tax Summaries – Nigeria, individual other taxes (professional source) |
| Income tax on salaries | PAYE withheld monthly and paid to the State Internal Revenue Service. From 1 January 2026 (Nigeria Tax Act): first NGN 800,000 a year at 0%, then 15%, 18%, 21%, 23% and 25% above NGN 50 million. | PwC Worldwide Tax Summaries – Nigeria, significant developments (professional source) |
| Mandatory bonuses and 13th-month pay | None required by law. The Labour Act sets no bonus or 13th-month pay; year-end bonuses are contractual or discretionary. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
| Work permits for foreign nationals | The Nigerian employer obtains Expatriate Quota approval from the Ministry of Interior. The worker then gets an Employment (Expatriate) visa, class R2A (STR), valid 90 days, and an e-CERPAC residence permit. Short assignments use Temporary Work Permit visas. | Nigeria Immigration Service – Employment Visa (Expatriate) R2A (official) |
| Employment contract requirements | A written statement of terms must be given within 3 months of starting work (Labour Act, s.7), covering the job, pay, hours, holidays, sick pay and notice. Changes must be notified in writing within 1 month. | Labour Act, Cap L1 LFN 2004 (statute text via PLAC Laws of Nigeria) |
Employer obligations in Nigeria, topic by topic
Filter by primary service relevance
Does an employment contract in Nigeria have to be in writing?
Does Nigerian law set working hours and overtime pay?
What is the minimum wage in Nigeria in 2026?
How much leave must an employer give in Nigeria?
What does an employee cost in Nigeria on top of gross salary?
How much notice and severance does an employer owe when ending employment in Nigeria?
How can a company hire a foreign national in Nigeria?
Is it risky to engage independent contractors instead of employees in Nigeria?
Key employment laws in Nigeria and official sources
- Labour Act, Cap L1, Laws of the Federation of Nigeria 2004 — Sets written terms, notice, annual and sick leave, maternity leave and redundancy rules for workers.
- National Minimum Wage (Amendment) Act 2024 — Sets the national minimum wage at NGN 70,000 a month, with reviews planned every 3 years.
- Pension Reform Act 2014 — Requires minimum pension contributions of 10% (employer) and 8% (employee), prompt remittance and group life insurance.
- Nigeria Tax Act 2025 — Sets personal income tax bands, reliefs and PAYE rules from 1 January 2026.
- Employee’s Compensation Act 2010 — Requires employers to contribute 1% of payroll to NSITF for workplace injury compensation.
- Industrial Training Fund Act (as amended 2011) — Requires employers with 5+ staff or NGN 50 million turnover to pay a 1% training levy on annual payroll.
- Immigration Act 2015 — Governs Expatriate Quota, employment visas, e-CERPAC and other permits for foreign workers.
FAQs: hiring employees in Nigeria
Can a foreign company hire employees in Nigeria without a local entity?
Not directly in most cases. PAYE registration with state tax authorities, pension enrolment with a Pension Fund Administrator and Expatriate Quota approvals all assume a Nigerian employer. Foreign companies without an entity usually hire through an Employer of Record, which employs staff locally, runs payroll and handles statutory registrations while the client directs the work.
How much does an employee cost in Nigeria on top of gross salary?
About 12% of pay, plus insurance. The employer pays at least 10% pension on basic, housing and transport pay, 1% NSITF and 1% ITF (for qualifying employers), and must buy group life cover worth at least 3 times annual pay. Many employers also provide private health insurance and a 13th-month or year-end bonus by contract.
What is the minimum wage in Nigeria in 2026?
The national minimum wage is NGN 70,000 a month, set by the National Minimum Wage (Amendment) Act 2024, which was signed on 29 July 2024. It was unchanged in October 2026, although labour unions were demanding a review, and the government has committed to reviews every 3 years. Employees earning no more than the minimum wage pay no income tax.
How much notice and severance does an employer owe when dismissing an employee in Nigeria?
The Labour Act sets minimum notice of 1 day (up to 3 months’ service), 1 week (up to 2 years), 2 weeks (up to 5 years) and 1 month (5 years or more), or the longer contractual period. There is no statutory severance. In a redundancy, the employer must consult the union and negotiate redundancy pay in good faith.
Can a company hire a foreign national in Nigeria, and what permit is needed?
Yes. The Nigerian employer first obtains Expatriate Quota approval from the Ministry of Interior. The worker then gets an Employment (Expatriate) visa, class R2A, applied for as an STR visa, and an e-CERPAC residence permit from the Nigeria Immigration Service. Short specialist assignments can use a Temporary Work Permit visa instead.
Is it risky to engage contractors instead of employees in Nigeria?
Yes, when the contractor works under your control like an employee. Courts look at control, integration and exclusivity, not the contract label. Reclassification can lead to claims for notice and benefits, back pension contributions with penalties, and unpaid PAYE assessed by the state tax authority. Use contractors only for independent, project-based work.
Related NNRoad resources for Nigeria: Employer of Record in Nigeria · Payroll in Nigeria · Hiring foreign employees in Nigeria · Contractors and on-demand talent in Nigeria · Nigeria employer cost calculator
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Regulation Updates in Nigeria
FG DECLARES FRIDAY, 1ST MAY, 2026 AS PUBLIC HOLIDAY TO MARK 2026 WORKERS' DAY CELEBRATION
What it is: The Federal Government declared a public holiday on May 1, 2026, for International Workers’ Day.
What it changes: This public holiday alters employer obligations related to working time and may require payroll adjustments for employees who work or are paid for the day.
Who is affected:
- Workers or employers explicitly mentioned or clearly implied by the policy summary.
What employers should do:
- Review and adjust working time and payroll considerations for May 1, 2026.
- Ensure records reflect the public holiday for staff who work or are paid for the day.
Notes: Effective month: 2026-05.
Oct 2025: Gov Fubara Approves N85,000 Minimum Wage for Rivers State Workers
Rivers State approved a ₦85,000 minimum wage for civil servants in October 2024, with implementation reported from November 2024. The state-level rate is higher than Nigeria’s national ₦70,000 minimum wage. Private employers operating in Rivers State should distinguish between the state civil-service wage policy and the national minimum wage rules that apply more broadly across Nigeria.
Update first published on NNRoad in Oct 2025. The current rules are summarised in the sections above.
Oct 2025: Nigeria employment policy: Nigeria launches job centre initiative 2025
Nigeria’s Federal Government has launched a nationwide network of employability hubs on October 15, 2025, aiming to improve employment opportunities and reduce unemployment across the country. This initiative is part of the Labour Employment and Empowerment Programme (LEEP), which seeks to connect jobseekers directly with employers and streamline workforce matching processes.
Update first published on NNRoad in Oct 2025. The current rules are summarised in the sections above.
Discover the latest employment and compliance updates in Nigeria — helping you stay ahead in a changing regulatory landscape.