Employer of Record in Nigeria: 2026 Cost and Compliance Guide

Nigeria has Africa's largest population, with Lagos and Abuja the main business centres, an English-speaking workforce and a time zone one hour ahead of GMT.

Statutory employer costs are moderate: a pension contribution of at least 10% of monthly emoluments, 1% for the Employees' Compensation Scheme run by NSITF and a 1% training contribution to the Industrial Training Fund, plus a group life insurance policy the employer must buy.

The point to understand first is who the Labour Act protects. Its minimum notice, leave and sick pay rules apply to 'workers' doing manual or clerical work, and the definition leaves out people in administrative, executive, technical or professional roles. For most professional hires, the employment contract sets those terms. An Employer of Record (EOR) can employ your hire under a Nigerian contract and run payroll, so you don't need a company first. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record is a company with a Nigerian entity that employs staff on behalf of foreign businesses. It issues the employment contract, registers the employee with a pension fund administrator, remits pension, NSITF and ITF contributions, withholds income tax (PAYE), runs payroll and handles leave and terminations under Nigerian law and the contract.

You direct the employee's work; the EOR carries the formal employer obligations and invoices you monthly.

Some providers employ through their own Nigerian company and others through a local partner. Ask which, and ask for the name and registration number of the entity that would sign the contract.

New to EORs? Our guide to what an Employer of Record is answers the 30 most common questions, from who the legal employer is to what happens if a provider fails.

The Labour Act defines a 'worker' as someone working under a contract for manual labour or clerical work, and leaves out people exercising administrative, executive, technical or professional functions (s. 91). Its minimum notice periods (s. 11), annual holiday (s. 18), sick pay (s. 16) and maternity protection (s. 54) are written for workers in that sense.

For a software engineer, analyst, manager or other professional hire, those terms come from the employment contract, so the contract your EOR issues matters more in Nigeria than in countries whose minimums cover every employee. The pension, NSITF and ITF contributions apply to employees generally, whatever their role.

What to agree in the contract

Nigerian employment cost has three layers: gross pay, statutory employer contributions (pension, NSITF and ITF, plus group life insurance) and the EOR fee.

Pay is usually set out as basic salary plus allowances. The pension contribution is on monthly emoluments, which can't be less than basic salary plus housing and transport allowances. The estimator applies it to the whole salary you enter, so if part of the package is other allowances, the real pension cost is lower.

Annual cost at example salaries

What these figures include and exclude

• The employee's 8% pension contribution and income tax (PAYE) are deducted from pay and are not employer costs.
• Group life insurance is compulsory but priced by the insurer, so it isn't in the totals; ask your EOR what it charges.
• Up to 50% of the ITF contribution can be reimbursed if the employer's training meets the ITF's reimbursement scheme.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive. For worked examples at four salary levels, see cost to hire an employee in Nigeria.

Minimum conditions for manual and clerical workers are set by the Labour Act; pensions by the Pension Reform Act 2014. Key rules below.

Who the Labour Act covers

A 'worker' is anyone working under a contract for manual labour or clerical work. The definition excludes people exercising administrative, executive, technical or professional functions, members of the employer's family and some others, so the Act's notice, leave and sick pay rules don't set terms for most professional hires.[5]

Labour Act, s. 91.

Notice of termination

Either party can end the contract by notice of one day (three months' service or less), one week (more than three months to under two years), two weeks (two to under five years) or one month (five years or more). Notice of a week or more must be in writing, and either side can waive notice or accept pay in lieu.[5]

Labour Act, s. 11. Pay in lieu counts only wages paid in money, excluding overtime and allowances.

Annual leave

After 12 months' continuous service, a worker is entitled to at least six working days' holiday with full pay (12 for under-16s). It can be deferred by agreement, but not paid out while employment continues.[5]

Labour Act, s. 18. A worker leaving after six to twelve months gets a proportionate payment.

Sick pay

Up to 12 working days' wages a year for absence through temporary illness certified by a registered medical practitioner.[5]

Labour Act, s. 16.

Maternity

A woman can stop work six weeks before the expected birth with a medical certificate and may not work for six weeks after it. If she has six months' continuous service, she is paid at least 50% of her wages while absent. She may not be given notice of dismissal during this absence, and while nursing gets two half-hour breaks a day.[5]

Labour Act, s. 54.

Working hours

Normal hours are fixed by agreement, collective bargaining or an industrial wages board; hours beyond them are overtime. A worker on six hours or more a day must get rest intervals totalling at least one hour.[5]

Labour Act, s. 13.

Redundancy

The employer must tell the trade union or workers' representative the reasons for and extent of the redundancy, apply 'last in, first out' within the affected category subject to skill, ability and reliability, and use its best endeavours to negotiate redundancy payments. The Act sets no amount.[5]

Labour Act, s. 20.

Pension

Private employers with 15 or more employees must contribute at least 10% of each employee's monthly emoluments, and deduct at least 8% from the employee, into the employee's retirement savings account. Monthly emoluments can't be less than basic salary plus housing and transport allowances. Employers with fewer than three employees can join voluntarily.[1]

Pension Reform Act 2014, ss. 2(2)–(3), 4(1) and 120.

Group life insurance

Every employer must maintain a group life insurance policy for each employee, for at least three times the employee's annual total emoluments, with the premium paid before cover starts. An employer that fails to must pay death claims itself.[1]

Pension Reform Act 2014, s. 4(5)–(6).

Employees' compensation

Every registered employer remits 1% of total monthly payroll to NSITF's Employees' Compensation Scheme, which covers work-related injury, occupational disease and death on a no-fault basis.[3]

Training contribution (ITF)

Employers with five or more employees, or fewer with annual turnover of ₦50 million or more, contribute 1% of total annual payroll to the Industrial Training Fund each year, and must accept students on industrial attachment. Up to 50% can be reimbursed for training that meets the ITF's scheme.[4]

How Nigeria compares

• EOR pricing in Nigeria and other countries: Lowest published provider fee, employer costs and the monthly total.
• Employer social security: how Nigeria compares: Every mandatory employer contribution, with rates and ceilings.
• Minimum wage: how Nigeria compares: Official rates, annual equivalents and a US-dollar comparison.
• Employer pension contributions by country: Rates, earnings ceilings and scheduled increases.

These EOR providers publish a Nigeria page. Prices are their own published starting rates in USD, from our pricing tracker; a Nigeria quote can differ. Delivery models are as each provider's own Nigeria page states them.

In Nigeria, ask whether the provider employs through its own Nigerian company or a partner, how the contract handles notice, leave and redundancy for a professional hire, and what it charges for group life insurance.

Compare providers for Nigeria

• Remote vs PlayrollIn Nigeria: US$599 vs US$399 a month (published starting prices).
• Remote vs RemotePassIn Nigeria: US$599 vs US$349 a month (published starting prices).
• Remote vs RivermateIn Nigeria: US$599 vs US$349 a month (published starting prices).
• Remote vs Globalization PartnersIn Nigeria: US$599 vs US$599 a month (published starting prices).

For each provider's products, pricing model and fit signals, see the EOR provider directory.

The usual alternative is a private company limited by shares registered with the Corporate Affairs Commission (CAC). You then register as an employer for PAYE, pension, NSITF and ITF, and buy group life insurance yourself.

Ongoing costs include accounting, annual CAC returns, tax filings and payroll. Get local quotes before comparing.

What a team costs through an EOR

Annual cost of a team of mid-level professionals on NGN 15,000,000 each, with statutory employer costs from our cost model and an EOR fee of NGN 794,741 per employee per month (a common published starting price of US$599). Providers may price differently for larger teams, so ask for a quote. US-dollar amounts use the US Treasury rate of 1326.78 NGN per US$1 (30 September 2026).

The salaries and employer costs are the same whoever employs the team. The difference is the EOR fees: NGN 47,684,460 a year for 5 employees, NGN 238,422,300 a year for 25 employees and NGN 476,844,600 a year for 50 employees. A Nigerian private company limited by shares (Ltd) becomes cheaper once running it, including payroll, costs less than that.

Work out your own break-even with the EOR vs entity calculator, or see the step-by-step method in EOR vs local entity: a break-even framework.

1. 1

   Define the role and packageDay 0

   Agree the salary and how it splits into basic salary, housing, transport and other allowances, since the pension base depends on it.

2. 2

   Check work authorisationDay 0–2

   Nigerian citizens can start straight away. Foreign nationals need immigration approval to work; ask whether the provider supports it.

3. 3

   Ask who the employer is1–3 days

   Get the name and registration number of the Nigerian entity that would sign the contract, and whether it's the provider's own company or a partner.

4. 4

   Compare itemised quotes1–3 days

   Request Nigeria quotes covering the fee, deposit, pension, NSITF, ITF, group life insurance and offboarding. Use the estimator to sanity-check totals.

5. 5

   Agree the contract termsDays

   For a professional hire, set notice, annual leave, sick pay, parental leave and redundancy terms in the contract, since the Labour Act's minimums are written for manual and clerical workers.

6. 6

   Ongoing administrationMonthly

   Monthly payroll, PAYE, pension and NSITF remittances, the annual ITF contribution and the group life policy renewal.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   Pension Reform Act 2014

   National Pension Commission (PenCom)

   Ss. 2(2)–(3) (private employers with 15 or more employees), 4(1) (at least 10% employer and 8% employee), 4(5)–(6) (group life insurance of at least three times annual total emoluments) and 120 (monthly emoluments: at least basic salary plus housing and transport allowances).

2. 2
   Notice to all employers/employees: compliance with PRA 2014 on group life insurance

   National Pension Commission (PenCom)

   Every employer must maintain a group life policy of at least three times employees' annual total emolument.

3. 3
   Services: Employees' Compensation Scheme payments

   Nigeria Social Insurance Trust Fund (NSITF)

   Monthly contribution of 1% of total monthly payroll, remitted by every registered employer under the Employees' Compensation Act 2010.

4. 4
   8th Revised Training Reimbursement Scheme

   Industrial Training Fund (ITF)

   Under the ITF Act as amended in 2011, employers with five or more employees, or fewer with turnover of ₦50 million or more, contribute 1% of total annual payroll; up to 50% reimbursable.

5. 5
   Labour Act, Cap L1, Laws of the Federation of Nigeria 2004

   National Library of Nigeria (Compendium of Acts relating to the jurisdiction of the National Industrial Court of Nigeria)

   Ss. 11 (notice), 13 (hours), 16 (sick pay), 18 (annual holiday), 20 (redundancy), 54 (maternity) and 91 (definition of 'worker').

6. 6
   Labour leaders praise President Tinubu over approval of N70,000 minimum wage

   State House, Abuja

   18 July 2024: the federal government's agreement with the NLC and TUC on a ₦70,000 national minimum wage, to be reviewed after three years.

7. 7
   Employer of Record & Payroll Services: Nigeria

   Remote

   States that Remote owns its own legal entity in Nigeria (read 26 October 2026).

8. 8
   Corporate Affairs Commission

   CAC

   Company registration.

Nigeria's statutory employer costs are moderate: at least 10% for pension, 1% each for NSITF and the ITF, and a compulsory group life policy. Through an EOR, total cost depends mostly on the salary split, the insurance premium and the provider's fee.

The Nigeria-specific issue is that the Labour Act's minimums are written for manual and clerical workers, so for professional hires the contract does the work. Choose a provider that tells you which entity employs your hire and sets clear notice, leave and redundancy terms.

If you're building a team, compare an EOR against your own company early with our EOR vs local entity guide. For another African market, see South Africa.