Employer of record in Nigeria: costs and how to hire employees in 2026
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The confirmed employer cost on top of pay in Nigeria is the Contributory Pension Scheme, at least 10% of monthly emoluments, or $4,000 a year on a package worth USD 40,000, according to the National Pension Commission's (PenCom) 2023 FAQ, and on top of that published EOR fees start at $199 a month with Payoneer Workforce Management (formerly Skuad) and reach $699 with Oyster (prices checked October 2026). Where foreign employers slip is the pension base: emoluments may not be less than basic salary plus housing and transport allowances, so moving pay into housing or transport allowances does not shrink the 10%.
An employer of record in Nigeria is a Nigerian company that becomes the legal employer of your hire, runs naira payroll and pays the employer pension contribution, while you set the work.
- Minimum annual leave
- 6 working days after 12…
- Currency
- NGN
On this page
Nigeria's rules, read from the statutes
PenCom builds the pension base from basic salary plus housing and transport allowances, so the way you split a package matters. The Labor Act then sets minimum leave and notice that a contract can improve on.
- Pension (PenCom): employer at least 10%, employee 8%, of monthly emoluments, which may not be less than basic plus housing plus transport. The scheme is mandatory for private employers with 3 or more employees. PenCom's FAQ states no cap.
- Minimum wage: NGN 70,000 a month under the National Minimum Wage (Amendment) Act 2024, in force July 29, 2024 (Mondaq summary, August 2024, more than a year old). Establishments with fewer than 25 employees are exempt, and the review period is now 3 years.
- Annual leave: 6 working days after 12 months' continuous service (12 for workers under 16), section 18(1) of the Labor Act.
- Notice under section 11(2): 1 day for service of 3 months or less, 1 week from 3 months to under 2 years, 2 weeks from 2 to under 5 years, and 1 month at 5 years or more.
Still unverified on an official site: the NSITF employees' compensation contribution, the ITF training levy, the National Housing Fund deduction, group life insurance, probation, severance, public holidays and pay frequency. Ask the EOR to show each item and check them with PenCom, the NSITF and the Federal Ministry of Labor and Employment.
Employment costs and rules in Nigeria
| Item | Nigeria |
|---|---|
| Employer social contributions | 10% pension on monthly emoluments confirmed; NSITF 1% and ITF 1% of payroll not confirmed today (would make about 12%) |
| What the employer pays | Contributory Pension Scheme: employer at least 10% of monthly emoluments, which may not be less than basic salary + housing + transport allowances; mandatory for private employers with 3 or more employees |
| Caps and ceilings | No cap stated in the PenCom FAQ |
| Employee contributions | 8% pension of monthly emoluments (NHF 2.5% not confirmed today) |
| Minimum wage | NGN 70,000 per month (National Minimum Wage (Amendment) Act 2024, in force Jul 29, 2024); establishments with fewer than 25 employees exempt; review period now 3 years |
| Annual leave | 6 working days after 12 months' continuous service (12 for workers under 16) (Labor Act s18(1)) |
| Notice period | Labor Act s11(2): 1 day (service 3 months or less), 1 week (over 3 months to under 2 years), 2 weeks (2 to under 5 years), 1 month (5 years or more) |
| Sample salary used | Not computed (no official NGN rate read) |
Checked October 16, 2026. Source type: official (PenCom FAQ 2023) for pension; secondary (Mondaq, Aug 28, 2024) for minimum wage; Labor Act Cap L1 text from the PLAC Laws of Nigeria repository (secondary host). Sources are listed at the end of this page.
What an EOR charges to employ someone in Nigeria
| Provider | EOR fee per employee per month | Deposit | Entity model (provider claim) |
|---|---|---|---|
| Payoneer Workforce Management | from $199 | None listed | Claims owned entities across APAC, MEA, Europe and the Americas |
| Pebl | $399 | Not listed | About 90% of employees on Pebl-owned entities |
| Playroll | from $399 | One month's salary per employee, refundable | No clear owned-entity claim |
| Rivermate | $319 to $639 | Not stated | Claims 38 owned entities |
| Multiplier | $459 (annual) or $499 (monthly) | Sized from costs, fees and notice period (method published, no fixed amount) | Claims owned entities in 160+ countries |
| Rippling EOR | Quote only (third-party reference: $499) | Not listed | Claims Rippling entities; no partner mention |
| Deel | $599 | Not stated by Deel | Claims owned entities in 130+ countries |
| Remote | from $599 | Waived for startups; otherwise not stated | Claims 100% owned entities in 90+ countries |
| Atlas | from $599 | Not published | Claims owned entities in 160+ countries |
| Papaya Global | from $650 | Refundable deposit, amount not stated | Uses in-country partners |
| Oyster | $699 | At least one month of total service cost, refundable (per its terms) | Owned entities and partners |
| Globalization Partners (G-P) | Quote only | Not stated | Information page claims 100+ wholly owned entities |
Source: each provider’s pricing page, checked October 16, 2026. Fees are the provider’s charge on top of salary and the employer contributions above. Some providers adjust prices by country.
Pricing one Nigerian hire
No official NGN exchange rate was read for our data, so this example stays in US dollars and assumes the whole package counts as emoluments.
| Line | Basis | Per year (USD equivalent) |
|---|---|---|
| Gross pay (paid in naira) | $40,000 | |
| Pension, employer minimum | 10% of monthly emoluments | $4,000 |
| Confirmed portion | $44,000 | |
| EOR fee at $599 a month | $599 x 12 | $7,188 |
| Confirmed portion with the fee | $51,188 | |
| NSITF, ITF, group life insurance | not yet confirmed | not priced |
Source: National Pension Commission (PenCom) FAQ 2023 for the 10% employer and 8% employee pension rates; $599 is the Deel and Remote list price as of Oct 16, 2026. Shown in USD because no official NGN rate was read; assumes all pay counts as emoluments.
Ten percent of $40,000 is $4,000, so salary plus pension is $44,000. Twelve months of a $599 fee ($7,188) brings it to $51,188; Payoneer WFM at $199 makes it $46,388, Pebl or Playroll at $399 $48,788, and Oyster at $699 $52,388. This is not the full employer cost: the NSITF and ITF contributions and group life cover are still to add once confirmed.
Currency is the other open line. You fund a naira payroll from dollars, and the provider's rate matters. Multiplier says it adds no FX markup, which a Trustpilot reviewer disputed on August 5, 2026; Remote's terms reserve a transaction fee or margin. See EOR pricing and hidden fees and the EOR cost index.
Contractor or employee for a Nigerian developer
Paying a Nigerian engineer as a contractor avoids the 10% pension and the payroll setup. Exclusive, full-time work managed day to day by your team reads as employment, and unpaid pension becomes the back bill. For independent project work, contractor management software handles payments; a contractor of record adds a classification review.
Choosing an EOR to hire in Nigeria
Multiplier (79/100) and Oyster (64/100) top our EOR scores, with Remote a close third at 62. Confirm Nigeria is on the provider's list and whether the Nigerian employer is its own entity. Ask how it pays: Oyster reviewers on Trustpilot report held wages (July 29, 2026), while Remote's visible reviews include praise for on-time pay (we could not check its low-star reviews).
Our EOR shortlist ranks all of them, and separate write-ups cover Oyster and its pay complaints, Remote and its renewal terms and Deel and its unpublished deposit.
A Nigerian company instead of an EOR
Your own entity would register with PenCom once it has 3 or more employees, plus the tax and other agencies. Five EOR hires would run $35,940 a year in fees alone; our entity break-even analysis shows when a subsidiary wins. African comparisons: Kenya, South Africa and Egypt.
Frequently asked questions
What does an employer of record charge to hire in Nigeria?
What is the employer pension contribution in Nigeria?
Is there a national minimum wage in Nigeria, and who is exempt?
What is the statutory leave entitlement in Nigeria?
What notice period applies in Nigeria?
Sources (13)
- Payoneer Workforce Management (formerly Skuad): Skuad pricing (checked Oct 16, 2026)
- Pebl: Pebl EOR pricing (checked Oct 16, 2026)
- Playroll: Playroll pricing (checked Oct 16, 2026)
- Multiplier: Multiplier pricing (checked Oct 16, 2026)
- Deel: Deel pricing (checked Oct 16, 2026)
- Remote: Remote pricing (checked Oct 16, 2026)
- Oyster: Oyster pricing (checked Oct 16, 2026)
- Trustpilot: Multiplier reviews (checked Oct 16, 2026)
- Trustpilot: Oyster HR reviews (checked Oct 16, 2026)
- Trustpilot: Remote reviews (checked Oct 16, 2026)
- pencom.gov.ng/wp-content/uploads/2023/09/FREQUENTLY-ASK-QUESTION-20... (checked October 16, 2026)
- mondaq.com/nigeria/employee-benefits-compensation/1510034/the-natio... (checked October 16, 2026)
- lawsofnigeria.placng.org/laws/L1.pdf (checked October 16, 2026)
This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.