Payroll
/
Nigeria
Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
NGN N (Nigerian Naira)
Employer contributions
~10% employer pension + 1% NSITF
Minimum wage
NGN 70,000/month (2024 federal minimum; states may be higher)
Payment frequency
Monthly
Calendar year (Jan 1 - Dec 31)
Capital
Abuja / Lagos
Timezone
WAT (GMT+1)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~NGN 660,000 total
/month
For a gross salary of
NGN 600,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~10% employer pension + 1% NSITF
Mandatory extras
Annual Bonus
Monthly admin
Monthly payroll - PAYE by 10th - pension by month-end - annual return March 31
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
+
A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
+
Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~NGN 660,000 total
Example gross salary
NGN 600,000 gross/month
~NGN 462,000 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~NGN 60,000 pension
Employer contributions on that salary
Employer contributions
~10% employer pension + 1% NSITF
Employee contributions
~8% employee pension + income tax (PAYE)
Total cost above gross
~10% above gross
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~NGN 300,000
Per month
Lagos
NGN 400,000 - 1,500,000
~50%
Abuja
NGN 350,000 - 1,200,000
~40%
Monthly gross. National average salary per year:
~NGN 3,600,000
Minimum wage
NGN 70,000/month (2024 federal minimum; states may be higher)
Paid:
Monthly
Extra pay
Annual Bonus
Discretionary, 13th month common in multinationals
December
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
7% up to NGN 300,000 / 11% / 15% / 19% / 21% / 24%
Tax year:
Calendar year (Jan 1 - Dec 31)
Filing calendar
Monthly by 10th (PAYE) / pension by end of month
Social security payments
March 31 (annual PITA return)
Income tax
March 31
Employee tax certificate
Annual Tax Clearance Certificate (TCC)
March 31
Annual return
Annual PITA (Personal Income Tax) Return
Late payment penalties
Late PAYE: 10% penalty + 19% annual interest; late pension: 2% monthly
Who collects what
FIRS / SIRS (State IRS)
PAYE income tax (state-based for employees)
NSITF
Social insurance / workplace injury
Ministry of Labour and Employment
Labour law enforcement
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave
6 days (first year) / 12 days (after 1 year) / escalating by seniority
Public holidays
~12 public holidays
Sick leave
Sick Leave
12 days/year full pay from employer
Maternity leave
12 weeks (84 days) maternity + 2 weeks paternity
Full pay from employer
The contracts you can use, and what ending an employment relationship costs.
Permanent
Permanent Employment Contract
Fixed term
Fixed-Term Contract
Independent contractor
Contract for Service
Collective agreements
Collective Agreement
Ending employment
Gratuity / Redundancy Pay
How it is calculated
Per company policy; statutory minimum per Labour Act
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
State vs Federal PAYE Jurisdiction Confusion
Risk Level: HIGH
Nigeria's PAYE is administered by each State's Internal Revenue Service (SIRS) - not the federal FIRS - based on where the employee is resident. Companies operating in multiple states must register and remit PAYE separately to each relevant SIRS. Filing with the wrong state is a common error generating duplicate assessments.
Pension Contribution Underpayment
Risk Level: HIGH
Nigeria's Pension Reform Act requires 10% employer + 8% employee contributions calculated on monthly emoluments (basic + housing + transport allowances). Many employers contribute only on basic salary. PenCom auditors assess the full emolument base retroactively with 2% monthly penalty.
1 of 6
Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
150+
countries
$49
per contractor per month
1 run
to pay your whole team
USD
Global Account for every contractor
FAQ
+
Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
+
Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
+
Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
+
Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
+
Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
+
When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
+
Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.