How to hire in Nigeria through an EOR

Nigeria requires written contracts for most workers, and for full-time hires, you'll almost always use an indefinite-term contract. Get this wrong and you risk misclassification claims, back payments, and fines.

Contract types

Most companies use indefinite-term contracts for ongoing roles. They're flexible and work well whether you're hiring developers, managers, or other professionals.

Avoid casual contracts that run past 6 months. A pending bill would require regularization after that point, with penalties for non-compliance.

What has to be in the contract

For workers covered by the Labour Act (manual or clerical roles), you need to provide a written contract within 3 months of their start date. If your contract doesn't cover something, Labour Act defaults kick in automatically.

Required elements include:

• Names of parties and organization
• Job title and duties
• Start date and duration (if fixed)
• Work hours and location
• Pay details, benefits, and payment intervals (no more than monthly without approval)
• Leave entitlements
• Notice periods for termination
• Dispute resolution

There's no specified language requirement, but English is standard practice. For professional roles, there's no legal writing mandate, but you should always use a written contract anyway. It's much easier to resolve disputes when everything is documented. Probation is capped at 3 months for most roles, and while you can end employment with minimal notice during that period, pay still applies if you terminate early.

Contractor vs. employee

The key test is control. Employees work under supervision, use company tools, and follow set hours (contract of service). Contractors decide how they work and are paid for results (contract for service). If you misclassify an employee as a contractor, courts will reclassify based on how the relationship actually works, not what the contract says.

The consequences are real. You could owe back pension contributions, leave pay, and taxes, plus fines from agencies like the National Pension Commission. If the worker takes you to the National Industrial Court for unfair dismissal, damages could include reinstatement or compensation of up to 12 months' pay.

Non-competes are difficult to enforce in Nigeria. Courts will void them unless they're reasonably narrow and don't work against public interest. A 6-12 month restriction might hold up if it's specific, but many don't survive legal scrutiny. IP assignment is enforceable if it's clearly written into the contract. Without that, employees own what they create.

Using an EOR for indefinite written contracts keeps you compliant without needing to set up a local entity. It's worth comparing a few providers to find one that fits your situation.

Nigeria's legal minimum for annual leave is six paid days after 12 months of service. In practice, you'll need to offer 10 to 20 days to compete for skilled talent, since that's what private sector employees typically expect.

Time off

Employees qualify for at least six working days of paid annual leave after 12 months of continuous service. Workers under 16, including apprentices, get 12 days. Leave accrues after a full year and must be taken by the end of the following year, though you can agree to defer it up to 24 months total.

If someone leaves after more than six months, you'll need to pay out any accrued leave on a pro rata basis. You can't pay in lieu of leave while someone is still employed, only at the end of the contract.

Nigeria has around 11 to 13 public holidays per year. They fall on fixed dates and are paid if they land on a working day.

All leave types

The Labour Act sets the baseline, primarily for unskilled workers, but most companies extend these protections to all staff. Job protection applies during statutory leave. Here's how it breaks down.

Other types, like casual leave (5 to 7 days) or study leave, tend to show up in public sector rules or individual company policies rather than law. Maternity and annual leave can overlap depending on how your policy is written. Many private firms offer more generous sick leave, up to 42 days with medical certification.

Mandatory benefits

You're required to contribute to pension and social security. There's no national health insurance mandate for private employers, though the National Health Insurance Authority covers public sector workers.

Workers are entitled to a one-hour rest break each day for meals. There's no legal requirement for meal vouchers or transport allowances, though some states adjust minimum wage expectations to reflect the cost of living. Senior and professional staff often negotiate additional benefits directly into their contracts.

What people actually expect

Legal minimums won't get you far when hiring for tech, finance, or other skilled roles. Most employees expect 15 to 30 days of annual leave, particularly at senior levels. Sick leave in the range of 12 to 42 days with pay is increasingly common.

Private health insurance is effectively standard in the market. Public healthcare coverage falls short for most people, so candidates at the mid-to-senior level will expect HMO coverage that includes their family. A 13th-month payment, performance bonuses, and housing or transport allowances are also common in Lagos and other major cities.

Remote work stipends or hybrid arrangements matter in cities where commuting is a real daily burden. Paternity leave at 14 days has become an expectation rather than a perk since 2022. Packages that reflect these norms tend to attract stronger candidates, while those that stick to the statutory floor often lose out to employers offering more.

Letting someone go in Nigeria isn't straightforward. Courts tend to side with employees, and damages for unfair dismissal are common. Document everything, and follow your contract's procedures before you act.

Firing someone

Technically, you can terminate most employees without giving a reason, as long as you provide notice or pay in lieu. In practice, the National Industrial Court of Nigeria expects fairness. Put a valid reason in writing. "Services no longer required" won't hold up in court.

Valid grounds include poor performance, misconduct like fraud or dishonesty, incapacity, or redundancy. For gross misconduct, you can dismiss without notice, but only if your contract lists it and you've followed a fair hearing process.

Unfair dismissal applies if you terminate based on pregnancy, union activity, disability, HIV status, or other protected categories. Redundancy has its own rules: you'll need to notify unions, apply last-in-first-out (with skill adjustments), and negotiate payouts. Wrongful termination claims are common here, and courts typically award damages rather than reinstatement.

Notice periods

The Labour Act sets minimums for workers. Your contract can require more, and either side can pay salary in lieu of notice.

Severance

Severance isn't automatic. It's required for redundancy or retirement, and the formula is typically one week's pay per year of service, though your contract may set a higher amount. Calculate it on basic salary, not bonuses.

There's no strict cap, but courts will look at whether the payout is fair. If you're dismissing for gross misconduct, no severance is owed.

Work permits and visas

You can hire foreign nationals through an EOR, but the EOR has to sponsor the work permit as the legal employer. Nigeria doesn't have a digital nomad visa.

The two main routes are the Combined Expatriate Residence Permit and Aliens Card (CERPAC) for long-term work, and the Temporary Work Permit (TWP) for stays under 6 months. You'll need a job offer, evidence the role can't be filled locally, and Ministry of Interior approval.

Processing runs 2-6 months and goes through the Nigerian Immigration Service and Nigeria Immigration Attachment (NIA) quota approval. EORs handle the sponsorship filings, but you'll need to demonstrate a genuine business need. Foreign workers on tourist visas who work remotely risk deportation.

A few other things worth knowing

Data protection is governed by the Nigeria Data Protection Act 2023. You'll need employee consent to process personal data, a data officer if you're handling sensitive information, and breach reporting within 72 hours. Non-compliance can mean fines of up to 2% of annual turnover.

Trade unions are active, particularly in oil, manufacturing, and the public sector. If your employee is a union member, consult the union before terminating or making significant changes. Check whether a collective bargaining agreement applies in your industry.

There's growing pressure heading into 2026 around age discrimination in hiring, with the Senate flagging strict age limits as unconstitutional. No major termination law changes have landed yet, but the Nigeria Tax Act 2025 repealed the old income tax rules, so factor that into any payouts. The monthly minimum wage reached NGN 70,000 in 2024, with reviews expected.

Use written contracts with clear termination clauses, and consider working with an EOR to stay on top of compliance. They handle permit filings, notices, and record-keeping. Skipping one step, like a fair hearing, can put you in front of a court facing back pay and damages.