Employer of record services in Nigeria
Flexi-Personnel’s Employer-of-Record (EOR) service enables you to expand your operations in Nigeria without the hassle of setting up a legal entity or dealing with employment regulations.
Nigeria overview
Nigeria is located in West Africa, with a population of approximately 220 million people. The country’s capital is Abuja, and other major cities include Lagos, Kano, Ibadan, and Kaduna. The official language of Nigeria is English, with Yoruba, Igbo, Fula, and Hausa being the major regional languages spoken.
Nigeria has a diversified economy with a Gross Domestic Product (GDP) of $432.29 billion in 2021, making it the largest economy in Africa. The country’s economy is heavily dependent on oil exports, which account for over 90% of the country’s total exports. However, Nigeria has been trying to diversify its economy, with the agriculture and services sectors showing significant growth in recent years.
Payroll Processing
Flexi-Personnel handles all aspects of payroll processing, including calculating employee salaries, taxes, and deductions, processing payments, and generating payslips. They also manage employee reimbursements and handle any payroll-related queries.
Tax Compliance
At Flexi- Personnel we ensure that you comply with all relevant tax laws and regulations in Nigeria. We handle tax registrations, deductions, and filings on your behalf.
Benefits Administration
Our team offers a range of employee benefits, such as health insurance, retirement plans, and vacation policies. We manage all aspects of benefits administration, including enrollment, claims processing, and compliance.
Legal Compliance
Our legal team helps you and your company to comply with all relevant labor laws and regulations in Nigeria. Our lawyers handle employment contracts, termination procedures, and employee grievances.
Recruitment and Staffing
Flexi-Personnel provides recruitment and staffing services to its clients. They help companies find and hire the right talent for their needs, including temporary, permanent, and contract positions.
Employment Law in Nigeria
Nigeria has a comprehensive employment law framework that regulates the relationship between employers and employees. The employment laws in Nigeria provide a legal framework that protects employees’ rights and interests, and at the same time, provide guidelines for employers to follow in their conduct of employment-related matters.
There are three main laws related to employment in Nigeria, namely the Nigeria Labor Act, the Employee’s Compensation Act, and the Trade Union Act.
Nigerian Labor Act
Regulates the employment relationship between employers and employees in Nigeria. The Act provides guidance on various issues, such as the minimum age for employment, working hours, employment contracts, leave entitlements, and termination of employment. The Act also covers aspects such as wages, pensions, and industrial relations between employees and employers.
The Employee’s Compensation Act
Provides compensation for employees who suffer injuries or die in the course of their employment. Under the Act, employers are required to take out insurance cover for their employees to provide compensation in the event of work-related injuries or death.
The Trade Union Act
Provides the legal framework for trade unionism in Nigeria. The Act provides for the registration of trade unions and the rights of employees to join a union. It also regulates the conduct of trade unions, including their ability to engage in collective bargaining and industrial action.
Fixed-term Employment Contract
A fixed-term employment contract is a type of contract that has a predetermined end date. This type of contract is typically used for temporary work or for specific projects. The following table outlines the details of a fixed-term employment contract in Nigeria:
Probation period | The probation period for a fixed-term contract is typically three months, but it can be extended up to six months. |
Termination | The contract automatically ends on the specified end date. However, either party can terminate the contract before the end date if there is a breach of the contract or if there is a mutual agreement to terminate. |
Severance pay | If the employer terminates the contract before the end date without cause, they are required to pay the employee the balance of their salary for the remaining period of the contract. If the employee terminates the contract before the end date without cause, they are required to pay the employer for any losses incurred due to the early termination of the contract. |
Indefinite Contract
An indefinite contract is a type of employment contract that does not have a predetermined end date. It’s used for permanent employees who are expected to work for the employer for an indefinite period. Additionally, it comes with specific terms and conditions that both the employer and employee must adhere to.
Features | Details |
Probation Period | Up to 6 months |
Termination | Can be terminated by either party with notice or payment in lieu of notice |
Severance Pay | One month’s salary for every year of service if terminated without cause by the employer |
Benefits | Entitled to various benefits, including leave entitlements, medical insurance, and pension contributions |
The standard working hours for most employees is 8 hours a day and 40 hours a week, as stipulated by the Labor Act.
Additionally, the Labor Act requires that employers provide rest periods and breaks during the workday. Employees who work for 6 hours or more in a day are entitled to at least one hour of break or two 30-minute breaks. These provisions help ensure that employees are not overworked and can maintain their physical and mental well-being.
Public Holidays in Nigeria
Nigeria has a total of 11 public holidays, including religious and secular observances.
Temporary Work Permit (TWP): Issued to foreigners who plan to work in Nigeria for a short period of time, usually up to 90 days. Suitable for individuals attending business meetings, conferences, or short-term assignments.
Subject to Regularization (STR) Visa: Issued to foreigners who have been offered employment by a Nigerian company. Allows the holder to stay and work in Nigeria for up to 90 days while the company applies for a work permit on their behalf.
Combined Expatriate Residence Permit and Aliens Card (CERPAC): A long-term work permit valid for up to 2 years and renewable. Issued to foreigners who have been offered employment in Nigeria for a period of more than 90 days. Also serves as a residence permit, allowing the holder to enter and exit Nigeria without the need for a re-entry visa work permits in Nigeria.
In Nigeria, employers are required to withhold and remit taxes from their employees’ salaries to the relevant tax authorities. Employers are also required to obtain a Tax Identification Number (TIN) and register with the relevant tax authority.
These taxes include:
- Pay-As-You-Earn (PAYE) tax: This is a tax on the income of employees and is deducted from their salaries. Employers are responsible for deducting the tax and remitting it to the relevant tax authority on behalf of their employees. The tax rates vary between 5% to 25%, depending on the employee’s income level.
- Value Added Tax (VAT): This is a tax on goods and services and is charged at a rate of 7.5%. Employers are required to register for VAT and remit the tax to the relevant tax authority.
- Pension Fund Contribution: Employers are required to contribute 10% of their employees’ monthly salaries to a pension fund on behalf of their employees.
- National Housing Fund (NHF) Contribution: Employers are required to contribute 2.5% of their employees’ monthly salaries to the NHF on behalf of their employees.
Why choose Flexi-Personnel employer of record services in Nigeria
Compliance with Nigerian employment laws:
Company will be fully compliant with Nigerian employment laws and regulations. We stay up-to-date on the latest employment laws, ensuring that your company remains in good standing with the relevant authorities.
Reduced administrative burden:
Managing payroll, taxes, and employment contracts can be a time-consuming and complicated process. Our EOR service takes care of all these tasks, freeing up your company's time and resources to focus on core business operations.
Quick and easy onboarding:
Our experts offer a streamlined onboarding process, allowing your company to start operating in Nigeria quickly and efficiently. We handle all the necessary paperwork and legal requirements, ensuring a smooth transition into the Nigerian market.
Flexibility and scalability:
We offer flexibility and scalability to meet your company's unique needs. Whether you need to hire one employee or an entire team, we can provide customized solutions to support your business growth.
Risk mitigation:
Operating in a new market can come with inherent risks, but our EOR service can help mitigate those risks. We handle all legal and compliance matters, reducing the risk of penalties or legal issues.
