Popay Payroll · Nigeria Payroll Software for Nigeria, Built for Scale
Why payroll processing in Nigeria breaks most systems
Running payroll in Nigeria means juggling PAYE tax calculations across 36 states, pension contributions to PFAs with 7 working days remittance deadlines, NSITF filings, NHIA for all private sector employers, and an ITF levy that catches most employers off guard.
The new Nigeria Tax Act 2025 (effective January 2026) rewrote the rulebook: new tax bands, abolished CRA, fresh deduction rules. Most payroll systems weren’t built for this complexity.
Popay’s cloud-based payroll platform was. Every statutory deduction, every salary calculation, every regulatory update, automated and always current.
Dive into...
Your payroll roadmap in Nigeria
- PAYE tax calculations, statutory deductions & pension remittance
- Employment contracts & compliance automation
- Leave management, employee self-service portal, labour unions, collective agreements & employer obligations
The national minimum wage was raised by 133%, to ₦70,000 /month based on 8 hours per day, 5 days per week. Effective May 1, 2024 (retroactive). Any payroll system not updated is generating non-compliant payslips right now. Applies to establishments with 25 or more employees.
Nigeria at a Glance
Capital
Abuja
Local Currency
Nigerian Naira (NGN / ₦)
Official Languages
English
Hausa, Yoruba, and Igbo widely spoken
Pay Frequency
Monthly (most common)
GDP Growth
+3.9% (2025)
Second time in a decade exceeding 4% (excl. post-pandemic rebound)
Standard VAT
7.5%
Lowest among major African economies
Minimum Wage
₦70,000 / month
Effective May 1, 2024 (signed into law July 29, 2024, retroactive). +133%
Based on 8 hours/day, 5 days/week. Applies to establishments with 25+ employees.
Employer Contributions
Pension 10%, NSITF 1%, ITF 1%, NHIA 10%
Rates vary; some apply above certain thresholds
Contract Termination
1 day to 1 month notice
Depends on length of service
Employee Protection
Moderate (Labour Act 2004 + strong union influence: NLC, TUC)
PAYE Tax Bands — Nigeria Tax Act 2025 (effective Jan. 2026)
| Annual Taxable Income (₦) | Tax Rate |
|---|---|
| Up to ₦800,000 | 0% (Tax-Free) |
| ₦800,001 – ₦3,000,000 | 15% |
| ₦3,000,001 – ₦10,000,000 | 18% |
| ₦10,000,001 – ₦25,000,000 | 21% |
| ₦25,000,001 – ₦50,000,000 | 23% |
| Above ₦50,000,000 | 25% |
Your Nigerian payroll processing, mastered from A to Z.
Popay's cloud-based payroll system automates everything: compliant payslips, PAYE tax calculations, pension remittances, NSITF, NHIA, ITF contributions, direct deposit to employee bank accounts, and full Labour Act compliance. Integration with your existing HRIS, ERP, and performance management tools comes built-in. Employee self-service portal for payslips, leave requests, and tax certificates.
Employment contracts & onboarding compliance
The Labour Act of 2004 governs employment contracts in Nigeria, and getting onboarding wrong creates compliance risk from day one. Written contracts must be provided within 3 months of hire. Your employee management software should auto-generate compliant contracts with all mandatory clauses. The Act primarily applies to “Workers” (manual/clerical employees), while “Non-Workers” (executives, professionals) follow individual contract terms. Popay’s HR software manages both categories and tracks every contractual obligation.
Employment Contracts in Nigeria
Contract Types
Permanent (default, open-ended) / Fixed-term (must be written)
Written contract required within 3 months of hire
Notice — up to 3 months
1 day's notice
For employees with up to 3 months of service
Notice — up to 2 years
1 week's notice
Notice > 1 week must be in writing
Notice — up to 5 years
2 weeks' notice
Same for employer and employee
Notice — 5+ years
1 month's notice
Payment in lieu of notice is acceptable
Mandatory Clauses
Job description, compensation, working hours, place of work, leave entitlements, termination procedures, manner of notice, wage payment terms
All contracts must include these elements. Place of work is essential for State Tax (PAYE) and prevents illegal forced transfers. Manner of notice defines how termination letters must be sent to be legally received.
Summary Dismissal
Permitted for grave misconduct: violence, theft, fraud, bribery, gross insubordination, serious negligence, or abandonment of duty. Employers must adopt the Principle of Fair Hearing before any dismissal.
Employee protection rights apply. The NICN (National Industrial Court) strictly enforces Fair Hearing. Wrongful dismissal may result in damages.
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Leave management & employee rights in Nigeria
Leave management is where compliance gets personal. The Labour Act guarantees statutory minimums for annual leave, maternity leave, and sick leave, but many companies offer more generous terms through contracts or collective agreements. Your payroll solution needs to track every entitlement, calculate accruals accurately, and give employees self-service access to their leave balances. Popay’s employee self-service portal handles this automatically, with real-time reporting and analytics for HR teams.
Types of Leave in Nigeria
Annual Paid Leave
Minimum 6 working days/year. Eligibility: after 12 months of continuous service
Many formal employers offer 15–25 days in practice
Maternity Leave
12 weeks (6 before + 6 after). Pay: at least 50% of wages. Eligibility: 6+ months of service
Protection against dismissal during maternity absence
Sick Leave
Up to 12 working days/year. Requires medical certificate. Full pay.
Statutory minimum under the Labour Act
Paternity Leave
Not statutory. Up to 14 days (federal civil service: 14 days, Lagos State: 10 days, private sector varies)
No statutory provision yet — contractual or policy basis
Time-off for Nursing
30 minutes twice daily during working hours
Section 54 of the Labour Act
Contract Protection
No dismissal during maternity absence. Sick leave suspends contract. Employee must be reinstated upon return.
Employee protection during leave periods
Free demo
In 30 minutes, see how Popay's payroll software handles your Nigerian payroll processing: with reporting and analytics dashboards built for HR teams and CFOs.
Labour unions, collective agreements & what your payroll system must handle
Nigeria has a strong trade union tradition led by the NLC (Nigeria Labour Congress) and TUC (Trade Union Congress), and their agreements directly impact your payroll processing. Sectoral unions negotiate wages, allowances (housing, transport, hazard), overtime premiums, and benefits that your payroll software must calculate correctly. Getting a collective agreement wrong doesn’t just mean a payslip error, it means a case before the National Industrial Court. Popay’s HR management platform maps every sectoral rule to your payroll configuration.
Key Labour Unions & Sectors in Nigeria
NLC & TUC (National umbrella)
National umbrella organizations
All sectors: federal, state, and private. Minimum wage negotiations, policy advocacy, strike coordination. (Negotiated the ₦70,000 minimum wage in 2024)
Banking & Financial Services
NUBIFIE (junior/non-management staff); ASSBIFI (senior staff)
Banks, insurance, financial institutions. Sector-specific wage scales, performance bonuses.
Oil & Gas
PENGASSAN, NUPENG
Upstream, downstream, services. Enhanced wages, hazard allowances, housing. (Highest-paying sector. Strong bargaining power)
Manufacturing & Food
NUFBTE
Food, beverages, tobacco manufacturing. Overtime premiums, shift allowances.
Aviation & Transport
NUATE, NURTW
Air and road transport. Sector-specific safety and wage provisions. (Regulated strike procedures)
Key Framework
Governed by: Trade Unions Act, Trade Disputes Act. Court: National Industrial Court (exclusive jurisdiction). Right to strike protected with procedural requirements. Employers must allow union membership.
Every employer must issue payslips compliant with the Labour Act, including all mandatory information (position, salary, overtime, statutory deductions, net pay, allowances). Your payroll software should generate these automatically. Payroll records must be maintained for at least 6 years. A cloud-based system with digital archiving makes this effortless.
PAYE must be remitted by the 10th of the following month to the relevant State Internal Revenue Service (SIRS). Pension contributions go to the PFA within 7 working days via direct deposit. Standard working hours are typically 8 hours/day, 40 to 48 hours/week depending on sector and collective agreement (the Labour Act does not prescribe a universal maximum). Your attendance tracking system must log hours accurately for overtime calculations. Identify and apply the correct collective agreement for your sector. A scalable payroll platform like Popay handles all of this from a single dashboard.
The Labour Code is evolving. Are you ready?
The Nigeria Tax Act 2025 took effect on January 1, 2026: new PAYE tax bands, abolished CRA, ₦800,000 tax-free threshold, Rent Relief deductions. If your payroll software wasn't updated, every payslip issued since is wrong. Late PAYE remittance: ₦100,000 for the first month, then ₦50,000 for each subsequent month. Discussions continue on Labour Act reforms and digitalization of NRS (formerly FIRS) filings.
Popay helps you anticipate and adapt with:
- Automatic regulatory updates
- Compliance always up to date
- Local & dedicated support
Present in Morocco and 40+ countries
We are proud to be the reference HR partner across Africa. Thanks to our local expertise and digital tools, we simplify HR management and legal compliance for every subsidiary.
Regions covered : South Africa, Zimbabwe, Ghana, Kenya, Ivory Coast, Senegal, Morocco, Tunisia, Egypt, etc.
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Book a call to discover our platform, our integrations, and how Popay can simplify your HR and legal management in Nigeria.
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