Stablecoin Payroll in Nigeria

Enable stablecoin-linked compensation for teams in Nigeria while staying compliant with Nigerian labour law, tax (PIT/CGT), pensions, and statutory funds.

Highlights

• Wages must be paid in legal tender (naira) or via permitted channels (e.g., bank transfer). Contracts may not validly replace wages with non-legal-tender instruments. 
• Banks may service registered VASPs under the CBN VASP Bank Account Guidelines (Dec 22, 2023), but crypto is not legal tender and payroll obligations remain in NGN. 
• Digital-asset tax clarity: Finance Act 2023 brought 10% capital gains tax on disposal of digital assets; FIRS confirms CGT rate is 10%. 
• Payroll deductions remain in NGN: PAYE (PIT), pensions (PRA 2014), and Employees’ Compensation (NSITF/ECA) are computed and remitted in naira. 

Navigating Stablecoin Payroll in Nigeria

Nigeria’s regulatory posture now allows banks to open accounts for VASPs under CBN’s 2023 guidelines, subject to AML/CFT controls. This does not make crypto a lawful means of payment for wages or displace naira as legal tender. Structure compensation so that salary, deductions, and filings are handled in NGN, with any stablecoin portion treated as a separately agreed benefit valued in naira at the time of transfer. 

Employment Types & Treatment

Regular Employees

• Form & currency of pay: The Labour Act requires wages in legal tender (naira) or, with the worker’s written consent, by cheque/bank instrument; payment “in any other form” is illegal, null and void. Use NGN for payroll; any stablecoin should be additional consideration with a clear NGN valuation at payment time. 
• Payslips & records: Payslips should show gross (NGN), deductions (NGN), net (NGN) and, if applicable, a separate stablecoin transfer with its NGN equivalent for audit/tax. (Practice aligned to Labour Act’s legal-tender rule.) 
• Statutory remittances: PAYE/PIT via the relevant tax authority; pension at 10% employer / 8% employee (baseline) under PRA 2014; Employees’ Compensation Fund (NSITF/ECA) contributions generally 1% of total monthly payroll (subject to future risk-based assessment). All in NGN. 

Contractors / Freelancers

• Invoices & tax: Contractors paid in stablecoins should invoice in NGN equivalent at time of payment for income-tax/VAT purposes (apply the taxpayer’s normal currency-conversion/accounting rules). (General FIRS doctrine: taxable amounts and remittances are in NGN.)

Stablecoin Tax & Accounting Framework (Nigeria)

• Employment income: Any agreed crypto component constitutes taxable employment income in NGN equivalent at receipt for PIT and forms the base for any applicable levies/assessments. File/remit in NGN through standard PAYE processes (state/FIRS). 
• Disposals of digital assets: Finance Act 2023 amended the Capital Gains Tax Act to include digital assets as chargeable assets (CGT 10% on gains at disposal). FIRS states CGT rate is 10%. (Companies/individuals analyze whether profits are business income vs CGT; seek local advice.)
• Capital vs income: Frequent/organized trading may be treated as business profits (taxed under CITA/PITA) rather than CGT; apply conservative classification and maintain detailed records. (Use FA 2023 and PITA/CITA constructs.) 

Payroll Compliance Process (Nigeria)

1. Classify worker (employee vs contractor).
2. Contracting: State salary in NGN; if adding a stablecoin element, describe it as a separate benefit, define the NGN valuation method (rate source, timestamp), and allocate currency risk.
3. Run payroll in NGN: Compute gross → deductions → net in naira.
4. Remit statutory items:
   
   • PAYE/PIT to the relevant tax authority (FIRS/state). 
   • Pension contributions per PRA 2014 (typical minimum 10% employer / 8% employee).
   • NSITF / Employees’ Compensation Fund (commonly 1% of payroll baseline; confirm current rate/class). 
5. Transfer any stablecoin benefit separately; record NGN equivalent and transfer proofs.
6. Maintain evidence: contracts, payslips, conversion screenshots/rate sources, and remittance receipts for audit.

Regulatory & Compliance Framework (Key Sources)

• Legal tender / wage medium: Labour Act (payment only in legal tender, with limited cheque/postal-order exception); CBN Act affirms CBN as the sole issuer of legal tender (naira).
• Banking & crypto interfaces: CBN Guidelines on the Operation of Bank Accounts for VASPs (Dec 22, 2023): banks and other FIs may open/operate accounts for licensed VASPs subject to robust AML/CFT controls (does not make crypto legal tender).
• Capital-market rules for digital assets: SEC Nigeria – Rules on Issuance, Offering Platforms and Custody of Digital Assets (May 11, 2022)—registration and conduct framework for digital-asset entities in Nigeria.
• Taxation: Finance Act 2023 (digital assets added as chargeable for CGT); FIRS—CGT 10% overview; PIT administration guidance. 
• Pensions & employees’ compensation: Pension Reform Act 2014 (contribution ratios); NSITF / Employees’ Compensation Act (employer ECF contribution baseline 1% of payroll; confirm class/rate). ‍