- Gross salary.
- Employer costs of about 12.0% at a NGNÂ 15,000,000 salary: NGNÂ 1,800,000 a year, of which the largest is pension (employer).
- An EOR fee, if you hire without your own entity. The providers in our Nigeria guide publish starting prices of US$349–599 per employee per month.
Mandatory employer costs at a NGNÂ 15,000,000 salary (mid-level professional). Employee contributions and income tax come out of gross pay and aren't included.
| Employer cost | Rate or amount | At NGNÂ 15,000,000 |
|---|---|---|
| Pension (employer) | 10% of gross | NGNÂ 1,500,000 |
| Employees' Compensation Scheme (NSITF) | 1% of gross | NGNÂ 150,000 |
| Industrial Training Fund contribution | 1% of gross | NGNÂ 150,000 |
| Total employer costs | 12.0% of salary | NGNÂ 1,800,000 |
Contribution ceilings mean employer costs can be a smaller share of higher salaries. Figures exclude the EOR fee.
| Annual salary | Employer costs | Total before EOR fee |
|---|---|---|
| NGNÂ 6,000,000 (junior / support) | NGNÂ 720,000 (12.0%) | NGNÂ 6,720,000 |
| NGNÂ 15,000,000 (mid-level professional) | NGNÂ 1,800,000 (12.0%) | NGNÂ 16,800,000 |
| NGNÂ 30,000,000 (senior professional) | NGNÂ 3,600,000 (12.0%) | NGNÂ 33,600,000 |
| NGNÂ 50,000,000 (lead / manager) | NGNÂ 6,000,000 (12.0%) | NGNÂ 56,000,000 |
- Employer pension: At least 10% of monthly emoluments (employee 8%)
- Employees' Compensation (NSITF): 1% of monthly payroll
- ITF training contribution: 1% of annual payroll
- Group life insurance: Required: cover of at least 3× annual emoluments
- Annual leave: At least 6 working days after 12 months (Labour Act 'workers')
- 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.
Without your own entity in Nigeria, an Employer of Record can employ your hire for a monthly fee. The alternative is setting up your own Nigerian private company limited by shares (Ltd). See the comparison in our Nigeria guide and EOR vs local entity.
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- 1Pension 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).
- 2Services: 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.
- 38th 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.
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