Employer of Record in Nigeria

An Employer of Record (EOR) in Nigeria is a company that legally hires employees on your behalf. This third-party organization handles all the administrative and legal responsibilities of employment. Think of them as your local HR team. They manage payroll, taxes, benefits, and ensure you comply with Nigerian labor laws. Using an EOR allows you to hire talent in Nigeria without setting up a local legal entity. For companies looking to hire in Nigeria, an EOR provider like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Nigeria

Using an EOR in Nigeria follows a straightforward process. You find the talent, and the EOR handles the rest.

1. You find your ideal candidate. You are still in charge of recruiting and selecting the person you want to hire.
2. The EOR drafts a compliant employment contract. They create an employment agreement that follows all local labor laws in Nigeria.
3. The EOR onboards your new employee. They handle all the necessary paperwork and registrations with local authorities.
4. They manage payroll and benefits. The EOR processes salary payments in the local currency and manages statutory contributions for things like pensions and health funds.
5. You manage your employee's day-to-day work. While the EOR is the legal employer, you maintain control over your employee's tasks, projects, and performance.

Benefits of Using an EOR for Hiring in Nigeria

Using an EOR to hire in Nigeria offers several advantages. It simplifies your expansion and allows you to focus on your core business operations.

• Enter the market faster. You can hire employees quickly without the time and expense of establishing a legal entity in Nigeria.
• Ensure legal compliance. EORs have expert knowledge of Nigerian labor laws, reducing the risk of non-compliance and potential penalties.
• Reduce administrative burden. The EOR handles all HR-related tasks, freeing up your time and resources.
• Access a wider talent pool. You can hire the best talent in Nigeria without geographical limitations or the need for a physical office.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Nigeria includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Nigeria.

Hiring in Nigeria is full of opportunity. The country has a large and growing talent pool. But, navigating the local employment landscape can be complex. You need to understand the rules to hire compliantly and effectively. This guide breaks down the key things you need to know.

Employment contracts & must-have clauses

In Nigeria, you must provide a written employment contract within three months of an employee's start date. This contract is the foundation of your relationship. It sets clear expectations for both you and your employee.

While verbal agreements can be recognized, a written contract provides the best protection for everyone. Make sure your contracts are clear and straightforward.

Here are the essential clauses to include:

• Party details: Full names and addresses of both the employer and employee.
• Job specifics: The employee's title, duties, and responsibilities.
• Compensation: Clearly state the salary and any other benefits.
• Work hours: Define the expected working hours.
• Termination: Outline the conditions and notice periods for ending the contract.
• Confidentiality: Include clauses to protect your company's information.

Probation periods

Probation periods are common in Nigeria. They allow you to assess a new employee's suitability for a role. For the employee, it is a chance to understand the job and company culture.

There is no law setting a specific length for probation, but it typically lasts between three and six months. If you want to extend a probation period, you need the employee's agreement. The terms of the probation, including its length, must be clearly stated in the employment contract.

Working hours & overtime

Standard working hours in Nigeria are typically 8 hours a day and 40-48 hours per week. Any work done beyond these hours is considered overtime.

There are no legally mandated overtime pay rates. These are usually determined by the employment contract or a collective agreement. However, a common practice is:

You must give employees at least one rest day of 24 consecutive hours in every seven-day period.

Public & regional holidays

Employees are entitled to paid time off for public holidays. Here is a list of the public holidays in Nigeria for 2025:

• January 1: New Year's Day
• March 30: Eid El-Fitr
• March 31: Eid El-Fitr Holiday
• April 1: Eid El-Fitr Holiday
• April 18: Good Friday
• April 21: Easter Monday
• May 1: Workers' Day
• June 6: Id el Kabir
• June 9: Id el Kabir additional holiday
• June 12: Democracy Day
• September 5: Id el Maulud
• October 1: National Day
• December 25: Christmas Day
• December 26: Boxing Day

Hiring contractors in Nigeria

Hiring independent contractors can be a flexible way to access specialized skills. It can also be a cost-effective solution for project-based work. When you hire a contractor, you need a clear contract that outlines the scope of work, payment terms, and project timeline.

A major risk with hiring contractors is misclassification. This happens when a contractor is treated like an employee. If a court determines a contractor is actually an employee, you could be liable for back taxes, benefits, and other penalties.

An Employer of Record (EOR) can help you avoid these risks. An EOR legally employs workers on your behalf. This means the EOR takes on the responsibility for compliance with local labor laws, taxes, and benefits. Using an EOR ensures your workers are classified correctly, which reduces your legal and financial risks. It allows you to focus on your business while the EOR handles the complexities of employment in Nigeria.

Navigating compensation and payroll in Nigeria requires understanding a few key rules. The system is designed to be straightforward, but you need to know the basics to stay compliant. This guide breaks down what you need to know about paying your team in Nigeria.

Payroll cycles & wage structure

In Nigeria, employers typically pay their employees on a monthly or bi-weekly basis. Monthly pay cycles are the most common. The wage structure is usually a fixed amount agreed upon in the employment contract. While hourly pay is uncommon, it is possible.

Overtime & minimums

The national minimum wage in Nigeria is NGN 30,000 per month. However, businesses with fewer than 50 employees are exempt from this requirement. There are no specific laws that regulate overtime work. Instead, you and your employee must agree on overtime terms and pay rates.

Employer taxes and contributions

As an employer in Nigeria, you have several responsibilities for tax withholding and social contributions. These are based on your employee's salary and your company's size.

Employee taxes and deductions

Employees in Nigeria also contribute to taxes and social funds. You are responsible for withholding these amounts from their pay. Nigeria uses a Pay-As-You-Earn (PAYE) system for income tax.

In Nigeria, providing the right mix of benefits and leave is key to attracting and keeping great people. It's not just about what's required by law. It's about creating a supportive work environment. Understanding the local landscape of employee entitlements is the first step to building a competitive benefits package that helps your business and your team succeed.

Statutory leave

Nigerian law sets out the minimum leave employees are entitled to.

• Annual Leave: After 12 months of continuous service, an employee is entitled to a minimum of six days of paid annual leave. Younger workers, under 16, get at least 12 days of paid leave.
• Sick Leave: Employees can take up to 12 days of paid sick leave per year. You can require a medical certificate from a registered doctor for an employee to be eligible for this paid leave.
• Maternity Leave: Female employees are entitled to 12 weeks of maternity leave at 50% of their regular salary. This can begin six weeks before the expected date of birth. In the public sector, this is extended to 16 weeks at full pay.
• Paternity Leave: There is no national law for paternity leave in the private sector. However, some states, like Lagos and Enugu, have their own rules, offering two and three weeks of paid leave, respectively.

Public holidays & regional holidays

Your employees are entitled to paid days off for national public holidays. Some holidays are based on the lunar calendar, so their dates can vary.

Typical supplemental benefits

To stand out, many companies offer more than the legal minimum. Here’s a look at both required and common extra benefits.

How an EOR can help with setting up benefits

Setting up a comprehensive benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Nigeria. This means you don't have to set one up yourself. They handle all the administrative and legal requirements of hiring employees.

Here's how an EOR can help you with benefits:

• Compliance: An EOR ensures your benefits package complies with all of Nigeria's labor laws.
• Local Expertise: They understand the local market and what benefits are competitive to attract top talent.
• Administration: An EOR manages the enrollment and administration of all benefits, saving you time and resources.
• Speed: You can get your team set up with competitive benefits much faster than if you were to do it all on your own.

By partnering with an EOR, you can offer your employees in Nigeria a great benefits package without the headache of navigating a new legal system.

When an employee leaves your company in Nigeria, the process needs to be handled correctly. This is known as termination and offboarding. It covers everything from the final paperwork to making sure all legal requirements are met. Managing this process with care protects your business and respects the departing employee. A smooth offboarding process ensures that you remain compliant with local labor laws, which is crucial for avoiding legal issues.

Notice periods

In Nigeria, you are generally required to give employees advance notice before termination. The length of this notice period depends on how long the employee has worked for you.

It's important to check the employment contract, as it may specify a longer notice period. If so, the contract's terms take precedence. Notice must always be given in writing.

Severance pay

Nigerian law does not have a mandatory severance pay requirement for all terminated employees. However, severance is often applicable in cases of redundancy. If an employee is being let go because their role is no longer needed, you will likely need to negotiate a severance package. The terms of any severance pay are typically detailed in the employment contract or a collective bargaining agreement.

How Rivermate handles compliant exits

We make sure that every step of the offboarding process is handled correctly and in compliance with Nigerian law. We take care of the details so you can focus on your business.

Here is how we manage the process:

• Documentation: We prepare and issue a formal written termination letter. This letter clearly states the reason for termination, the effective date, and details about the notice period and final pay.
• Final Payments: We ensure the employee receives all outstanding wages, payment for any unused vacation time, and any other money they are owed.
• Compliance Check: We review the employment contract and local laws to ensure all legal obligations, including notice periods and severance (if applicable), are met.
• Asset Recovery: We manage the return of all company property, such as laptops, phones, and access cards.
• Clear Communication: We maintain clear and professional communication with the departing employee throughout the process to answer their questions and ensure a smooth transition.

Navigating visas and work permits in Nigeria requires a clear understanding of the process. For anyone looking to work in the country long-term, you will need more than just a visa. The primary route involves a two-step process. First, you obtain a "Subject to Regularization" (STR) visa before you travel. Once in Nigeria, you must then get a Combined Expatriate Residence Permit and Aliens Card (CERPAC), which allows you to legally work and live in the country.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Nigeria and sponsor work visas for foreign employees. This is a practical route if your company doesn’t have a legal entity in the country. The EOR handles the complex legal and administrative requirements, making the process smoother.

However, there are realities to consider. Nigeria has an expatriate quota system. This system limits the number of foreign nationals a company can employ. An EOR’s ability to sponsor a visa is subject to these quotas. This means that while an EOR provides a viable pathway, it is not a guaranteed solution for every role. The position often needs to be one where local talent is not readily available.

Here’s a simplified look at what’s involved:

• Sponsorship: An EOR can sponsor the necessary work permits.
• Local Entity: This avoids the need for you to set up your own company in Nigeria.
• Expatriate Quota: Sponsorship is dependent on the government's quota for foreign workers.

Business travel compliance

For short-term business trips, you need to follow a different set of rules. You cannot work on a business visa. These visas are for specific, non-employment activities.

A business visa allows you to:

• Attend meetings and conferences.
• Negotiate contracts.
• Participate in trade fairs.

This visa is typically valid for up to 90 days and does not permit employment.

Nigeria also offers a Visa on Arrival (VoA) for business travelers. It's important to know that this is not a visa you get when you land without any prior steps. You must receive a pre-approval letter before your trip. The VoA is intended for short-term business activities and is usually valid for a 30-day stay.

To stay compliant: