Depends who’s asking. If you’re a Nigerian company hiring Nigerian staff, it’s pretty standard, nothing weird. If you’re a foreign company, even with just one foreign shareholder, you’re looking at a completely different set of rules, built around a ₦100,000,000 capital requirement almost nobody mentions. Both are covered below, kept separate so you can skip to the one that’s actually you.
Which situation are you in?
- Nigerian company, Nigerian staff: registration is just ₦100,000 in share capital. No importing capital, no Business Permit, no expatriate quota. Next section covers this.
- Foreign company, any ownership share: you need ₦100,000,000 in share capital, plus a Business Permit and NIPC registration. That starts from “Why the ₦100,000 figure isn’t the real cost for a foreign company” below.
Cost to hire someone in Nigeria as a Nigerian company
- Registration: ₦100,000 minimum share capital with CAC. Do it yourself and you’re paying ₦30,000-100,000 in fees. Use an agent or law firm and it’s ₦60,000-250,000+.
- Employer pension: you pay 10% of Basic+Housing+Transport on top of salary. The employee’s own 8% comes out of their pay, not yours.
- NSITF: 1% of gross pay, paid monthly, comes entirely from you. Funds workplace injury and disability cover.
- ITF: 1% of annual payroll, but only once you’ve got 5+ employees or ₦50,000,000+ turnover. Paid once a year, and you can claim back up to half of it if you document staff training spend.
- NHF: 2.5% of basic salary, but that one comes out of the employee’s pay, not yours.
- Ongoing compliance: ₦10,000/year for CAC annual returns, plus whatever else is covered further down.
No ₦100M capital, no Business Permit, no CCI needed. So the whole EOR-vs-direct-entity question further down doesn’t even apply to you, there’s no capital wall to get around in the first place. Really your choice is direct hire or contractor, not direct hire or EOR, because EOR’s whole selling point is dodging that wall, and you never hit it.
Why the ₦100,000 figure isn’t the real cost for a foreign company
- ₦100,000 only applies if the company is fully Nigerian-owned.
- The moment there’s a foreign shareholder, even one, that jumps to ₦100,000,000 (about $71,000), under CAMA 2020.
- CAC enforces it, and it’s tied to the Business Permit process at the Ministry of Interior.
- A law firm, a legal directory, and several compliance consultancies all back this up independently.
Is the ₦100M real money, or just a number on paper?
Sources disagree.
- Some say you don’t actually need it sitting in a bank account, it’s just a number your company is registered at.
- Others, including a law firm’s own compliance guide, say you have to bring the money in through a Nigerian bank and get a Certificate of Capital Importation before you can get your Business Permit.
- Realistically: you can issue the shares on paper without depositing instantly, but to actually operate and get your Business Permit, the money does need to move through the banking system at some point. Best to treat it as locked up, not money you can spend elsewhere.
An important exception the ₦100M claim itself doesn’t universally hold
- One Nigerian compliance firm says the ₦100M is really tied to the Business Permit and expatriate quota process, not just to having a foreign shareholder.
- Their take: if you’re not sponsoring foreign staff or applying for a Business Permit, you might only need the standard ₦100,000.
- That goes against a law firm and a legal directory, who both say ₦100M applies the moment there’s any foreign ownership, no exceptions.
- Even the same firm admits the CAC is increasingly applying the ₦100M rule to everyone anyway.
- Bottom line: if you’re only hiring Nigerian staff, there’s one credible source saying you might get away with ₦100,000. Don’t bank on it though, get a Nigerian corporate lawyer to confirm before you budget for the lower number.
The full cost to hire someone in Nigeria directly, added up
- Stamp duty: 0.75% of your share capital, paid to FIRS. On ₦100,000,000, that’s ₦750,000, about $536.
- Registration and legal fees: ₦100,000 to ₦250,000 through a CAC-accredited agent. Go with a commercial law firm and expect to pay more.
- NSITF: 1% of gross pay, paid monthly, on you regardless of whether the company’s foreign or Nigerian-owned.
- ITF: 1% of annual payroll once you hit 5+ employees or ₦50,000,000 turnover, same deal, ownership doesn’t matter.
- Ongoing compliance: ₦10,000/year just for CAC filing fees. Miss the deadline and you’re looking at ₦5,000-10,000/year in penalties, plus ₦1,000 per director. Add audit and company secretary costs and the real number runs ₦10,000-300,000+/year.
- Setup timeline: full breakdown further down.
What the registration timeline for a foreign-participated entity actually involves
A fully Nigerian-owned company can register in 5-14 working days. Add a foreign shareholder and you’ve got several more steps, each one waiting on the last:
- File with the CAC, declaring the ₦100M share capital, reserving your name, submitting the constitutional documents.
- Register with NIPC, the Nigerian Investment Promotion Commission, needed before you can start operating.
- Bring the capital in and get your e-CCI, importing it through an authorized bank and getting the Certificate of Capital Importation.
- Apply for the Business Permit at the Federal Ministry of Interior.
- Apply for an expatriate quota, but only if you’re posting foreign staff into Nigerian roles.
Each step waits on the last, that’s why the real total is weeks to a few months, not days. Nobody I found gave one solid total figure, so be skeptical of anyone who quotes you an exact day count.
Can a foreign company hire in Nigeria without incorporating at all?
Generally, no.
- Nigerian law says you need your own Nigerian entity to do business here, and a court has already backed that up.
- There are a few narrow exceptions, like companies invited by government for one specific project, but regular commercial hiring isn’t one of them.
- An EOR already has its own Nigerian entity set up. You hire through that instead of setting up your own.
Can a Nigerian employee legally be paid in US dollars?
Genuinely unresolved.
- If a foreign company pays a Nigerian remote worker directly in USD, no Nigerian entity in the picture, that’s generally fine.
- Whether a Nigerian-incorporated company, your own subsidiary or an EOR’s local entity, can legally pay its own employee in USD is genuinely unclear. Nigerian lawyers call it a real gap in the Foreign Exchange Act, and nobody’s settled it.
- What everyone agrees on: whatever currency you pay in, PAYE gets calculated on the naira equivalent, using the CBN’s official rate on the day you pay.
Cost to Hire Someone in Nigeria: Direct Entity vs. EOR vs. Contractor (Foreign Companies)
This is for foreign companies weighing the three routes above, a Nigerian company doesn’t need to think about this, check the section near the top instead. EOR pricing itself isn’t one number either: some providers charge a flat monthly platform fee, others, including Betternship, charge a percentage of the employee’s gross salary instead (15%).
Those two models scale completely differently, so both are shown below. Using a ₦5,000,000 salary and real 2026 PAYE, pension, and NHF numbers from Betternship’s average salary in Nigeria breakdown, for one mid-level software engineer in year one:
| Route | Year 1 cash cost (approx.) | What it excludes |
|---|---|---|
| Direct entity | ~$4,500-4,800 | ₦100M (~$71,000) capital, tied up not spent; Business Permit fee not confirmed here |
| EOR, flat-fee model ($299-599/mo) | ~$7,400-11,000 | No capital needed, no setup time |
| EOR, percentage model (Betternship, 15% of salary) | ~$4,400 | No capital needed, no setup time |
| Independent contractor | ~$3,600-12,000 | No statutory costs, but real risk if it gets reclassified |
The pricing model matters as much as the provider. A flat monthly fee is the same whether the hire earns $10,000 a year or $80,000, so it gets relatively cheaper the higher the salary. A percentage fee moves with the salary, so it stays proportionally the same at any level. Roughly, a flat fee around $299-599/month only beats a 15% fee once the role’s annual salary passes about $24,000-48,000 (the exact crossover depends on which flat fee it’s compared against).
Below that, which covers most individual contributor roles in Nigeria, a percentage-based EOR is usually the cheaper EOR option, and at this piece’s ₦5,000,000 example salary, it lands close to direct entity’s cash cost too, without the $71,000 tied up.
So why does almost everyone still choose EOR for their first Nigerian hire?
- Not always the cash cost — with a flat-fee EOR, direct entity can win on year-one cash. With a percentage-based EOR like Betternship’s, the gap mostly closes.
- Capital: tying up $71,000 for one or two hires is a real decision to make, and that money just sits there doing nothing, no matter which EOR pricing model you compare it against.
- Speed: setting up an entity takes weeks to months. An EOR gets you hiring in days.
- At scale it flips: spread that capital and setup time across a bigger team and it stops mattering, while EOR fees, flat or percentage, keep adding up per person. Betternship’s EOR vs Direct Hire in Nigeria guide covers the compliance and misclassification side if you want more on that.
Contractor cost to hire in Nigeria, and why the savings are conditional
- Nigerian IT contractors run $300-$1,000/month, per Betternship’s contractor hiring guide, and you skip pension, PAYE, and NHF entirely.
- The catch: if you’re setting their hours, treating them as exclusive, or supervising them day to day, Nigerian labor authorities can call that employment no matter what the contract says. Then you owe all the statutory costs you were trying to avoid, plus penalties.
What this means for how much you actually budget to hire in Nigeria
- Direct entity: cheapest in cash for one hire, but $71,000 tied up and weeks to months before you’re operating.
- EOR: costs more per hire, but no capital needed and you’re hiring within days.
- Contractor: can be the cheapest option, but only if it’s a genuine contractor relationship, not employment in disguise.
Tech vs. non-tech: how much the role and experience level change the total
The percentages stay fixed, but the salary they’re calculated on swings a lot by role and experience:
| Role | Level | Monthly salary (₦) | Total year-1 cost via EOR |
|---|---|---|---|
| Software Engineer (tech) |
Entry (established local company) | ₦400,000-600,000 | $4,300-6,400 |
| Mid | ₦350,000-900,000 | $3,700-9,600 | |
| Senior | ₦700,000-2,000,000 | $7,400-21,300 | |
| Data Analyst (tech) |
Entry | ₦150,000-300,000 | $1,600-3,200 |
| Mid | ₦250,000-450,000 | $2,700-4,800 | |
| Senior | ₦500,000-700,000+ | $5,300-7,400+ | |
| Administrative Assistant (non-tech) |
Entry (small-org floor, not confirmed as standard) | ₦60,000-100,000 | $640-1,100 |
| Mid | ₦80,000-200,000 | $850-2,100 | |
| Senior/exec (multinational) | ₦200,000-400,000+ | $2,100-4,300+ | |
| Accountant (non-tech) |
Entry (Big Four firms) | ₦180,000-300,000 | $1,900-3,200 |
| Mid (ICAN/ACCA qualified) | ₦250,000-500,000 | $2,700-5,300 | |
| Senior/finance manager | ₦600,000-1,500,000+ | $6,400-15,900+ | |
| Marketing Manager (non-tech) |
Entry (small-company floor, not confirmed as standard) | ₦150,000-300,000 | $1,600-3,200 |
| Mid (all sectors avg.) | ₦250,000-600,000 | $2,700-6,400 | |
| Senior (multinational) | ₦800,000-1,500,000+ | $8,500-15,900+ |
Entry-level pay across established, normal-sized employers clusters higher than a first glance at “entry-level” salary content suggests, most published “entry” figures online quote the smallest-company floor, not the standard. Senior pay is where the categories really pull apart, tech and marketing roles reach ₦1.5-2 million a month at the top, while admin tops out lower.
Within any single role, entry-to-standard-senior is usually a 3-5x spread, not the 8-10x a floor-to-ceiling comparison implies. Level is the bigger cost driver, not the tech label, but “entry-level” data online is itself worth reading carefully for which tier it’s actually describing.