Hiring in Nigeria means navigating a two-tier system of employment law. The Labour Act sets minimum entitlements for a specific category of workers, while professional, managerial, and administrative staff fall largely outside its scope and rely instead on what their employment contracts specify. Understanding which rules apply to which staff is the starting point for building a compliant benefits package.
Nigeria’s statutory framework also requires employers to contribute to three mandatory schemes — pension, health insurance, and housing — on top of whatever leave entitlements they offer. Getting all of these right before your first hire saves significant rework later.
Who the labour act covers
Nigeria’s Labour Act draws a distinction between “workers” and everyone else. A worker is broadly defined as a person who performs manual labour or clerical work under a contract of service, and the Act’s minimum entitlements apply only to this group. Employees in professional, managerial, and administrative roles aren’t covered by most of the Act’s substantive provisions, which means their leave entitlements and sick pay terms must be set out clearly in their employment contracts.
This distinction matters because the statutory minimums are considerably lower than what the market expects for professional roles. Employers need to apply the right floor to the right group of staff.
Annual leave
The statutory minimum annual leave entitlement under the Labour Act is 6 paid working days per year for workers, accruing after 12 months of continuous service. The timing of leave is agreed between the employer and the employee based on operational requirements, which gives employers reasonable flexibility over scheduling.
In practice, 6 days is well below what professional and management staff expect. The de facto market standard for non-worker roles is 20 days per year, and most employers specify this figure — or something close to it — directly in the employment contract. Putting it in writing avoids ambiguity and sets clear expectations from day one.
Public holidays
Nigeria observes 11 mandatory national public holidays each year. Employees aren’t required to work on these days, and employers who need staff to work on a public holiday should review their contractual obligations and applicable compensation terms before doing so.
| Date | Holiday |
|---|---|
| January 1 | New Year’s Day |
| Date varies each year | Good Friday |
| Date varies each year | Easter Monday |
| May 1 | Workers’ Day |
| June 12 | Democracy Day |
| October 1 | Independence Day |
| December 25 | Christmas Day |
| December 26 | Boxing Day |
| Date varies each year (lunar calendar) | Eid al-Fitr |
| Date varies each year (lunar calendar) | Eid al-Adha |
| Date varies each year (lunar calendar) | Mawlid (Prophet’s Birthday) |
Good Friday and Easter Monday move each year with the Christian calendar. The three Islamic holidays follow the lunar calendar and are confirmed closer to the time each year.
Sick leave
Workers
Workers under the Labour Act are entitled to 12 paid working days of sick leave per year. A medical certificate is required after the first 2 days of absence, so employers should make this requirement clear to staff and set up a process for collecting certificates promptly.
Non-workers
The Labour Act doesn’t prescribe sick leave terms for professional and managerial employees. Their entitlements are determined by the employer’s sick leave policy, which should be documented in the employment contract or an employee handbook. Most employers apply a policy that’s at least as generous as the statutory minimum for workers.
Maternity leave
Female workers are entitled to 12 weeks of maternity leave in total, split between 6 weeks before the expected delivery date and 6 weeks after. For employees who have been continuously employed for at least 6 months immediately before taking leave, the employer pays 50% of the employee’s normal salary throughout the leave period.
On return to work, a nursing employee is entitled to two paid breaks of 30 minutes each per day for the purpose of breastfeeding. The timing of these breaks is agreed with the employer, so it’s worth having a short conversation with returning employees about how to accommodate this practically.
The Labour Act doesn’t set maternity pay terms for non-worker roles. In practice, many employers apply a similar or more generous policy for professional staff and specify the details in the employment contract. Making this explicit avoids disputes and signals that the employer takes family-friendly policies seriously.
Paternity leave
There’s no statutory paternity leave entitlement in Nigeria. Many employers offer between 1 and 5 days of discretionary paid leave for new fathers, and the best practice is to document this in the employment contract so the entitlement is clear and enforceable. Employers who haven’t yet formalised a paternity leave policy should consider doing so — it’s increasingly a factor in talent attraction.
Bereavement and compassionate leave
Nigerian law doesn’t mandate bereavement leave. Common employer practice is to offer 1 to 3 days of paid leave following the death of an immediate family member. As with paternity leave, specifying this in the employment contract is the most straightforward way to manage it consistently across the workforce.
Examination leave
Some sectors provide leave for employees who are taking approved professional examinations, but this isn’t a widespread statutory requirement. Employers in industries where professional development and certification are common — financial services, for example — often include examination leave in their contracts as a retention tool.
Statutory contribution schemes
Beyond leave entitlements, Nigerian employers are required to contribute to three government-mandated schemes. Each has its own rate, administrator, and compliance process.
Contributory pension scheme (cps)
The CPS is mandatory for employers with 15 or more employees. Contributions are calculated on monthly emoluments and remitted to the employee’s Retirement Savings Account (RSA) with a licensed Pension Fund Administrator (PFA) every month.
| Party | Contribution rate |
|---|---|
| Employer | 10% of monthly emoluments |
| Employee | 8% of monthly emoluments |
There’s no broad unemployment benefit scheme in Nigeria, so the pension system is the primary vehicle for post-employment income. Timely remittance is a legal obligation, and late payments attract penalties.
National health insurance authority (nhia)
Mandatory health coverage is governed by the NHIA Act 2022. Contributions are based on basic salary and are administered through licensed Health Maintenance Organisations (HMOs).
| Party | Contribution rate |
|---|---|
| Employer | 10% of basic salary |
| Employee | 5% of basic salary |
Employers should also be aware that some states have additional health scheme requirements. In Lagos, for example, the Ilera Eko scheme imposes separate obligations. Checking the state-specific rules for wherever your employees are based is an important step in the compliance process.
National housing fund (nhf)
The NHF is an employee-only scheme. Employees contribute 2.5% of their basic salary, and the employer deducts this and remits it directly to the Federal Mortgage Bank of Nigeria. There’s no employer contribution to the NHF.
Workers’ compensation
Employers are required to provide workers’ compensation cover for workplace injuries. This is fully funded by the employer — there’s no employee contribution. The scheme ensures that employees injured at work have access to compensation without the employer needing to self-insure against potentially large claims.
Market-standard supplementary benefits
Statutory minimums are rarely enough to attract and retain strong candidates in Nigeria’s competitive talent market. Most employers supplement the mandatory baseline with some combination of the following:
- Private health insurance: Many employers top up NHIA coverage with group medical insurance, which typically offers broader provider networks and higher treatment limits than the statutory scheme alone.
- Life insurance / group life cover: Group life policies are a common employee benefit, particularly for professional and management staff.
- Transport or vehicle allowances: Given traffic conditions in Lagos and Abuja, transport allowances are a practical and widely expected benefit.
- Meal or food allowances: Subsidised meals or a food allowance are common, especially in office-based roles.
- Housing allowances: Particularly relevant for senior hires and expatriate roles, where housing costs can be significant.
- Performance bonuses: Bonuses are enforceable only if they’re agreed in the employment contract. A discretionary bonus clause can give the employer flexibility while still giving employees something to work towards.
No statutory 13th-month pay or mandatory bonus
Nigeria doesn’t have a legal requirement for a 13th-month salary or any form of mandatory year-end bonus. Any bonus arrangement is only legally enforceable if it’s set out in the employment contract. Employers who operate in markets where 13th-month pay is standard should be careful not to create an implied contractual entitlement by paying it informally year after year without documenting the terms.
Hiring through an Employer of Record (EOR)
For companies hiring in Nigeria without a registered local entity, an Employer of Record (EOR) handles the employment relationship on behalf of the hiring company. That includes enrolling employees in the CPS and NHIA, deducting NHF contributions, administering leave entitlements, and ensuring payroll is compliant with the Labour Act. An EOR removes the need to set up a local entity before making your first hire. Companies that want to compare their options can also explore available EOR services to find the right fit.
If you’re working with independent contractors in Nigeria rather than employees, the benefit and leave obligations above don’t apply in the same way. However, misclassification is a real risk, and structuring contractor relationships properly from the start is important. A Contractor of Record can help manage that engagement compliantly.
RemotePass helps employers manage Nigeria’s leave entitlements and benefit requirements accurately, from pension contributions to NHIA enrolment and annual leave tracking. Visit https://remotepass.com/demo to see how the platform keeps your Nigerian workforce compliant.
