Employer of Record in Nigeria

How hiring through an employer of record works in Nigeria

The local employer signs the Nigerian contract and runs payroll, while your managers direct the daily work. Section 7 of the Labour Act requires a written statement of the main terms within three months of the start date.

The employer registers with the relevant tax authority to deduct PAYE, which for a state resident is the state internal revenue service. Each employee opens a retirement savings account with a pension fund administrator, and the employer remits both pension shares within seven working days of paying salary.

Employer costs and contributions in Nigeria

The Pension Reform Act sets minimum rates of 10% for the employer and 8% for the employee on monthly emoluments, which cannot be lower than basic salary plus housing and transport allowances. Employers covered by the scheme must also keep group life cover of three times annual total emolument, which Toku's compliance guide flags as commonly missed.

NSITF takes 1% of total monthly payroll. The Industrial Training Fund levy is 1% of annual payroll and, since the Business Facilitation Act 2022, applies from 25 employees outside a free trade zone, replacing the 2011 test of five employees or NGN 50 million turnover. National Housing Fund contributions are optional for private-sector employees.

Toku's country data cites about 11% (10% pension plus 1% NSITF), which leaves out the training levy and group life cover.

Income tax and PAYE in Nigeria from 2026

The Nigeria Tax Act 2025 applies from 1 January 2026. Chargeable income is taxed at 0% on the first NGN 800,000, then 15% on the next NGN 2.2 million, 18% on the next NGN 9 million, 21% on the next NGN 13 million, 23% on the next NGN 25 million and 25% above NGN 50 million.

Deductions include pension, housing fund and health insurance contributions and rent relief of 20% of rent paid, up to NGN 500,000. The employer remits PAYE by the 10th of the next month and files an annual return by 31 January.

Pay, hours and leave rules in Nigeria

• Hours: section 13 leaves normal hours to agreement or collective bargaining, sets no overtime rate and gives one rest day in seven.
• Annual leave: six working days with full pay after twelve months, and money cannot replace leave during employment.
• Sick leave and maternity: twelve paid sick days a year, and maternity leave of up to six weeks before and six weeks after confinement, paid at no less than half wages after six months of service.

Probation, notice and redundancy in Nigeria

The Labour Act has no probation provision, so any probation period comes from the contract. Notice is one day up to three months of service, one week up to two years, two weeks up to five years and one month after that, and payment instead of notice is allowed. These rules apply to workers as section 91 defines them, which excludes professional and technical roles.

In a redundancy the employer informs the union or workers' representative, applies last in, first out and negotiates redundancy pay. The Nigeria Tax Act 2025 exempts compensation for loss of employment from tax up to NGN 50 million.

Getting paid in stablecoins, USDC, USDT, tokens and crypto in Nigeria

Short answer: Not settled. Section 1 of the Labour Act requires a worker's wages in legal tender, or by cheque or postal order with written consent, and voids other terms, but section 91 excludes administrative, executive, technical and professional roles from "worker", and no source opened rules on crypto pay for them. Salary stays valued in naira either way.

What the law says about the form of pay

Section 1 of the Labour Act (Cap. L1) says a worker's wages shall in all contracts be payable in legal tender and not otherwise, and voids a contract where any part is payable another way. The Central Bank of Nigeria Act 2007 makes the naira the unit of currency and its notes legal tender, and makes refusing the naira an offence, unless the CBN prescribes when other currencies may be used. Section 91 excludes administrative, executive, technical and professional roles from "worker", so the role decides whether section 1 applies.

What it means for employee salary

The CBN's December 2023 guidelines cover bank accounts for licensed virtual asset providers, not pay. Salary, PAYE, pension and NSITF run in naira, so any USDC or USDT element is something Toku confirms before an offer.

Contractors

No official source opened addresses paying contractors in crypto. The Joint Revenue Board's guidelines require withholding tax on payments to contractors and consultants, remitted by the last day of the following month. The SEC regulates virtual asset service providers under the Investments and Securities Act 2025.

Tax on crypto and tokens

The Nigeria Tax Act 2025 makes profits or gains from transactions in digital or virtual assets chargeable and defines digital assets to include crypto assets, and the Joint Revenue Board's guidelines require virtual asset service providers to report transactions. No official page opened says how crypto received as pay is valued for PAYE, so Toku confirms the treatment before an offer.

How Toku handles it

Separately from what the law in Nigeria allows, Toku offers stablecoin payroll, including USDC, in supported arrangements and pays contractors in USDC or USDT through contractor management. Token grants are a separate arrangement from salary, administered through token grant administration. This page does not say any of these is available for a hire in Nigeria: that is confirmed before an offer.

Reviewed November 7, 2026 against the official sources listed below. General information, not legal or tax advice. Tax on crypto or tokens received depends on local rules and where the person is resident, so confirm it with a local adviser.

How hiring through Toku works in Nigeria

1. Share the role, location, salary and start date.
2. Toku confirms coverage, the contract type and the right to work.
3. The local employer issues the contract and onboards the person.
4. Payroll, contributions and filings run each cycle.

Toku checks the role and contract terms before a start date is set. Prepare identification, bank details, the tax ID, any pension account details and the agreed naira salary. Your quote confirms the onboarding timeline for Nigeria.

What an employer of record costs in Nigeria

Where Toku supports the hire, its employer of record service starts at $599 per employee per month, with salary, employer contributions and benefit premiums itemized in your quote. Coverage in Nigeria is confirmed before an offer. See the published pricing.

More on hiring in Nigeria

• Payroll and hiring in Nigeria
• Nigeria full-time hiring compliance guide
• Employer of record coverage in 100+ countries