Employer of Record Nigeria — Hire Without a Local Entity

What is an Employer of Record in Nigeria?

An Employer of Record (EOR) is a third-party organisation that acts as the legal employer for your workforce in a country where your company has no registered entity. The EOR signs the employment contracts, handles all statutory registrations, remits payroll taxes and social security contributions, and takes on the legal obligations of an employer under local law — while you retain complete day-to-day management of the employee and their deliverables.

Two Max Group operates as your Employer of Record in Nigeria, employing your designated team members under Nigerian law from our registered entity. We manage contracts compliant with Labour Act Cap L1 LFN 2004 · Employees' Compensation Act 2010 · Pension Reform Act 2014, calculate and remit PAYE to the Ethiopian Revenue and Customs Authority, administer all statutory social security and pension obligations, and provide ongoing HR advisory support in-country.

What you retain: full control of the employee's work objectives, performance management, reporting lines, projects, and daily tasks. The employment relationship is transparent — your employee knows who they are working for. The EOR structure simply ensures the legal and statutory framework is handled correctly, eliminating the need to incorporate a local company before you can begin hiring.

Nigeria has Africa's most complex multi-body statutory payroll compliance framework. Employers must manage five separate regulatory bodies: State Internal Revenue Services for PAYE (each state has its own SIRS — Lagos State IRS for Lagos-based employees), PenCom for pension (10% employer + 8% employee into individual RSAs), the Industrial Training Fund (1% of annual payroll), the National Housing Fund (2.5% of basic salary employee deduction), and NSITF for employees' compensation (1% of gross salary). The Labour Act Cap L1 LFN 2004 governs employment, supplemented by the Employees' Compensation Act 2010. Nigeria also has 36 state-level employment laws that can differ from the federal framework. Two Max Group manages compliance at both federal and state levels.

Nigeria Employment Law — What Employers Must Know in 2026

The principal employment legislation governing the Nigeria labour market is the Labour Act Cap L1 LFN 2004 · Employees' Compensation Act 2010 · Pension Reform Act 2014. This framework mandates written employment contracts for all employees, establishes minimum entitlements for leave, notice, and termination, and sets out the requirements for statutory deductions. Non-compliance is not a minor administrative matter — the relevant revenue authorities and labour tribunals actively enforce obligations, and penalties accumulate quickly.

PAYE obligations apply from the first day of employment, with rates running 7% – 24% progressive (6 bands). Contributions must be withheld from the employee's salary each payroll cycle and remitted to the relevant authority by statutory deadlines. Employer pension contributions of 10% of gross emolument (PenCom) must be matched on top of the employee's own contribution of 8% of gross emolument (PenCom). These are not optional — they are statutory obligations with defined penalties for late or incorrect remittance. In addition, health insurance contributions apply at NSITF 1% of gross salary · ITF 1% of annual payroll (employer) and NHF 2.5% of basic salary (National Housing Fund) (employee).

Leave entitlements under Nigerian law include a minimum of Minimum 6 days (Labour Act); 12–21 days typical in practice of paid annual leave per year, and 12 weeks paid of maternity leave. Notice periods of at least Contract-dependent; minimum 1 month standard professional must be observed on both sides. Two Max Group's employment contracts are drafted to meet or exceed these minimums, and our payroll system tracks all entitlements automatically — ensuring year-end tax certificates and leave records are accurate and available on demand.