Establishing and running payroll in Nigeria
Nigeria’s fast-growing population, well-connected West African location, and booming business culture all contribute to it being a fantastic place to build and expand a business. The country is brimming with opportunities for any organization willing to take the plunge.
If you are planning a Nigerian expansion, one of your first steps will be hiring a local workforce. To do this you will generally need a legal entity in the country and will need to establish an in-country payroll and employment infrastructure. This can be a long and difficult process in many cases, taking several months to complete and causing delays.
At New Horizons, we specialize in helping organizations spanning all industries expand internationally, including into Nigeria. We can handle your Nigeria payroll outsourcing setup and management, even if you don’t have a legal entity in Nigeria.
If you have an entity in Nigeria
If your organization has already registered an official entity in Nigeria, then you can outsource your payroll setup and management to us to get expert support and to fast-track your operations.
This level of outsourcing is perfect for larger organizations that are looking to expand into Nigeria long term.
If you don’t have an entity in Nigeria
For organizations that have not already established an entity in Nigeria, we offer our standard Nigeria payroll outsourcing services with the added use of our Nigerian subsidiary. Our subsidiary will act as employer of record for your local workforce, meaning you won’t have to go through the long and cumbersome process of registering a legal entity in Nigeria.
This service provides a low-risk, flexible, and scalable option for organizations interested in expanding into Nigeria.
How we can help you expand in Nigeria
Reliable Delivery
We guarantee that all payments will be on time, your data will be secure, and you can be up and running within just 48 hours.
An Established Presence
Our in-country subsidiary will act as employer of record, offering you a presence in Nigeria for legal local employment.
Flexible Solutions
Our team will manage all of the admin, payroll, HR, and taxes, so you can focus on building your business in Nigeria.
Up-To-Date Compliance
With the ever-changing Nigerian employment laws, we’ll ensure you stay fully compliant at all times.
A Single Point of Contact
Our centralized service gives you a single point of contact, simplifying the entire in-country employment process.
Proven Global Expertise
Our in-house teams of payroll and HR experts have already helped dozens of organizations expand globally.
Nigeria payroll guide
Taxation and withholdings requirements in Nigeria
Employers and workers in Nigeria are required to pay a percentage of salaries into pension funds. Employers must pay a minimum of 10%, and workers must contribute a minimum of 8%. Most workers will also need to pay 2.5% to the National Housing Fund.
In Nigeria, incomes are tax progressively, with high earners paying a higher percentage in taxes The income tax rates range from 7% to 24%.
For most companies in Nigeria, corporation tax is 30%.
|
Pension and disability
|
10%
|
|
Health Insurance
|
10%
|
| Accident |
1%
|
|
Total Employer Cost
|
21% |
Pension and disability | 8% |
Health Insurance | 5% |
Housing Fund | 2.5% |
| Total Employee Cost | 15.5% |
First NGN 300,000 | 7% |
Next NGN 300,000 | 11% |
Next NGN 500,000 | 15% |
Next NGN 500,000 | 19% |
Next NGN 1.6 million | 21% |
Above NGN 3.2 million | 24% |
Entitlements and terminations in Nigeria
Employers and workers are both able to end contracts of employment at any time in Nigeria. This is a similar system to the ‘at-will employment’ regulations in the USA. We always recommend providing a notice period when terminating employees, however.
Employees are not legally entitled to severance payments in Nigeria.
How to establish Nigeria payroll outsourcing
In most cases, a foreign organization looking to establish a payroll in Nigeria will need to register an official entity within the country. This can take longer than expected and requires you to closely follow the country’s complex employment regulations.
Another option is to outsource your payroll setup and management to New Horizons. We can offer the use of our Nigerian subsidiary to act as employer of record for your employees in Nigeria, so you can avoid the complex setup and management process, and can benefit from our solutions even if you don’t have a legal entity in Nigeria. Additionally, we can set up and run your payroll, HR, compliance, and any other associated work, allowing you to work on successfully expanding your businesses in Nigeria.
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Your all-in-one solution for Nigeria payroll outsourcing and global expansion
New Horizons’ Nigeria payroll services help your business to quickly and compliantly begin trading in Nigeria, without the complex process of establishing a local entity and navigating local regulations. This can help your business to commence its Nigeria operations in as little as 48 hours and has the potential to cut your expansion costs by more than 80%, whether or not you already have a registered entity in the country.
New Horizons can also manage your company’s payroll, benefits, and expenses in Nigeria. Additionally, we can oversee HR duties, as well as employment and tax compliance. And as the only global PEO with an in-house recruitment team, New Horizons will source, hire, and onboard your local workforce.
