Table of Contents


Table of Contents


Nigerian Naira

Payroll Frequency

Monthly, Bi-weekly, or Weekly

Employer Taxes


About Nigeria

Nigeria has the largest population of all African countries. It also has one of the fastest developing economies in the world. The country has suffered government coups, a civil war, several constitutional changes, as well as military rule. Today, Nigeria has a federal republic system of government influenced by colonial English, traditional and Islamic laws. Nigeria relies largely on oil as an export, followed by agricultural and industrial raw materials and products. Half the population of Nigeria is Muslim while the other half is Christian or Indigenous. The country’s official language is English, but other local languages such as Yoruba, Igbo, and Hausa are also used widely. Nigeria is a community-oriented country where extended family members are closely involved in an individual’s day-to-day activities. Age, seniority, and social status are also very important as a way of signifying respect and honor.

Employment Relationship

• Permanent Employment

Nigerian labor law distinguishes between "workers" (those who perform manual and clerical work) and "employees" (or "non-workers") who perform executive, administrative, technical, or professional work. The law states that the Labour Act applies to workers, while employment relationships with employees are governed by the applicable employment contracts and common law. However, this distinction no longer holds in practice – the Employees Compensation Act and the Labour Act are generally considered to cover any employed person who has signed a contract with an employer on a long-term or fixed-term basis. Contracts that do not specify a fixed expiry date are considered permanent. Such contracts are terminated by giving a notice or in any other way in which a contract is legally terminable or held to be terminated.

• Fixed-Term or Specific-Purpose Contracts

The Labour Act of Nigeria does not specify the maximum duration of fixed-term contracts or the number of renewals allowed. Additionally, it is not prohibited to hire on fixed-term contracts for tasks of a permanent nature. However, the employer must be very clear about the nature of an employment relationship in the employment contract and successive fixed-term contracts lasting many years may be construed by the courts as creating permanent employment. 

• Temporary Employment Contratcs

Nigeria's labor law does not differentiate between permanent and temporary employees. Casual or temporary workers are recognized under the Employees Compensation Act and are entitled to earn the minimum wage. The Trade Unions Act of Nigeria recognizes temporary workers and allows them to form trade unions.

Probationary Period

There are no provisions or guidance on probationary periods, but the standard best practice is for the probationary period not to exceed 90 days.

Working Hours

Under the new National Minimum Wage Act 0f 2019, general full-time working hours are fixed by agreement or collective bargaining within the enterprise or industry. When there is no arrangement for collective bargaining, an Industrial Wages Board may set the general working hours. The Labour Act does not indicate a standard number of weekly working hours.

Holidays / PTO

• Statutory Holidays

New Year’s Day – January 1; Good Friday – date subject to change every year; Easter Monday – date subject to change every year; Workers Day – May 1; Democracy Day – June 12 (declared as the official day of celebration for Democracy Day and changed from May 29); Independence Day – October 1; Eid ul Fitr – date subject to change every year; Id el Kabir – date subject to change every year; Id el Maulud – date subject to change every year; Christmas Day – December 25.

• Paid Annual Leave

An employee who has worked for a continuous period of 12 months is entitled to a paid leave of at least six working days. Employees under 16 years of age are entitled to 12 days of annual leave. Annual leave is paid as the employee's basic pay, excluding all allowances and overtime pay.  Annual leave must be taken by the end of the year in which it is earned, but it can be deferred by mutual agreement for a maximum of 24 months. Both earned and deferred leave has to be taken within these 24 months.

• Sick Leave

An employee is entitled to 12 days of paid sick leave per year, provided that the temporary illness is certified by a registered medical practitioner. Benefits for sick leave are paid as the employee's basic pay, excluding all allowances and overtime pay. 

• Maternity Leave

A female employee is entitled to six weeks of maternity leave before and six weeks after the expected date of childbirth, provided that the employee has obtained a medical certificate from a registered medical practitioner. Maternity leave is paid at a rate of at least 50% of the wages the employee would have earned had they not been absent, provided that the employee had been working for the same employer for a period of 6 months before the leave. The employer is not liable to pay for any medical expenses incurred by a female employee during pregnancy or childbirth. Employers are prohibited from terminating a female employee during an absence after maternity leave if this absence is due to inability to resume work related to conditions arising from delivery. Extended maternity leave is unpaid.

• Paternity Leave

The Labour Act of Nigeria offers no provisions regarding paternity leave for private employees. However, married male public servants are given two weeks of paid paternity leave. Paternity leave is also available in case of adoption of a baby less than four months old. 

Termination of Employment

• Notice Period

The notice period is calculated based on the length of employment: One day, where the employment has lasted three months or less One week, where the employment has lasted for more than three months but less than two years Two weeks, where the employment has lasted between two years and less than five years One month, where the employment has lasted for five years or more Any notice period of more than one week has to be in writing. The notice period requirement can be waived by paying the employee's basic wages (excluding overtime and other allowances) in lieu of notice. Contracts can be terminated without notice in case of gross misconduct by either party.  

• Severance Benefits

Severance payments are not mandatory under the law but may be specified in employment contracts or collective bargaining agreements. In addition, the Labour Act gives the Minister of Labour the authority to enact regulations on severance pay for redundant workers.