An employer of record in Nigeria employs your hire through a Nigerian entity, issues a written employment contract, runs payroll in naira, withholds PAYE income tax, remits pension contributions and carries the legal employer obligations, while you keep day-to-day direction of the work. Nigeria is a common EOR destination because it combines a large English-speaking talent pool with an entity setup process most foreign companies do not want to run for one or two hires. The statutory frame is the Labour Act plus the Pension Reform Act 2014, and the figures below come from those instruments as published; contract documents control, and nothing here is legal advice.
The written contract and what the Labour Act requires
Nigerian law requires the employment contract to be given to the worker in writing within three months of the start of employment, stating the parties, the nature of the job, pay, working hours, holidays, sick pay and the notice required to terminate. The written particulars may point to documents the worker can access, such as a staff handbook, and the employer must notify workers of changes to terms within a month. In practice the Labour Act's protective provisions are aimed at workers rather than managerial staff, and a large share of professional employment in Nigeria runs on contract terms above the statutory floor; an EOR's template should still meet the Act's requirements on its face, because the floor is what a dispute gets measured against. Probation has no statutory maximum and commonly runs three to six months by agreement.
Notice periods under Section 11
Section 11 of the Labour Act sets the minimum notice to terminate by length of service: one day for a contract of up to three months, one week for service of more than three months but under two years, two weeks for two years but under five, and one month for five years or more. Notice of a week or longer must be written, the day notice is given does not count, either party may waive notice or pay in lieu, and all wages payable in money must be paid on or before the notice period expires. Contracts routinely improve on these minimums, and for professional hires a month on each side is common; what the contract says governs, provided it is not below the statutory floor. Ask your EOR to state the notice clause it uses for your hire's seniority before the contract is signed.
Pension and the rest of the cost stack
Nigeria's Contributory Pension Scheme, under the Pension Reform Act 2014, requires employers with five or more employees to contribute a minimum of 10% of monthly emoluments, with the employee contributing 8%, a combined 18% into the worker's retirement savings account. Emoluments for this purpose means basic salary plus housing and transport allowances, excluding irregular payments, and contributions must be remitted within seven working days of salary payment. On top of pension, an employer carries PAYE withholding and levies that vary with payroll size, so the true cost of a hire sits meaningfully above gross salary. A competent EOR itemises the stack on a specimen invoice: salary, pension, statutory levies, any private health insurance, and its own fee. Treat a quote that shows only salary plus fee as incomplete and ask for the rest in writing.
What to check in a Nigeria EOR
First, the employing entity: is it the EOR's own Nigerian company or a local partner, and is it registered with the pension regulator as an employer. Second, remittance discipline: pension contributions are due within seven working days of paying salary and PAYE by the tenth of the following month, so ask how the provider evidences on-time remittance, because unremitted deductions are the classic failure mode in this market and the regulator actively recovers from defaulting employers. Third, the contract: written within the statutory window, notice at or above the Section 11 floor, and clear on benefits in kind. Fourth, currency: agree whether the invoice is in naira or dollars and who carries exchange movement between invoice and payroll, since the gap can be material. A provider that answers all four in writing is doing the job; one that will not is the risk you were trying to avoid.
Questions people ask about employer of record nigeria
What notice period applies to ending employment in Nigeria?
The statutory minimum scales with service: one day up to three months, one week from three months to two years, two weeks from two to five years, and one month beyond five years, with notice of a week or more in writing. Contracts may set longer periods and commonly do for professional roles; pay in lieu is permitted.
What pension contributions does an employer make in Nigeria?
Employers with five or more staff contribute a minimum of 10% of monthly emoluments and the employee 8%, remitted to the worker's retirement savings account within seven working days of salary payment, under the Pension Reform Act 2014.
Does my hire need a written contract?
Yes. The written statement of particulars must reach the worker within three months of starting, covering the parties, the role, pay, hours, leave and notice. An EOR that cannot show you its Nigeria template before signature is not one to use.
Can I hire Nigerians as contractors instead?
You can engage genuine contractors, but a full-time person working under your direction on your tools is an employee in substance, and misclassification leaves unpaid PAYE and pension exposure with penalties. The EOR route exists precisely to make that person a lawful employee without your own entity.