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Global Employer of Record (EOR) in Nigeria

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  1. Overview: Nigeria
  2. Global PEO and Payroll
  3. Global HR Compliance
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
  7. Global Payroll Calculator
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Global PEO and Payroll in Nigeria

When considering expanding globally, one of the first questions you may have is about the legal framework for different types of business entities. While this can be a complicated topic, there are some essential basics to help you understand:

All businesses, whether in your home state or another country, have a legal structure that dictates exactly how the business will be run and who is responsible for what. These structures will vary somewhat depending on where you’re doing business. Some structures are more complex and expensive than others, but they all have benefits and drawbacks. By learning about these factors, you can set your business up for success in its new international venture. This will likely include utilizing global PEO and payroll solutions in Nigeria to help reduce risks and costs.

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15 Burdens a Global PEO Can Relieve for Your In-House HR Department

  1. Global expansion complexity
  2. Global payroll administration
  3. Employee benefits administration
  4. Lengthy onboarding
  5. Complex and risky offboarding
  6. Background checks
  7. Workforce compensation administration
  8. Compliance assistance
  9. Immigration and relocation support for your ex-pat workforce, such as visa sponsorship and securing work permits
  10. Lack of institutional knowledge
  11. IP right protection
  12. Lack of local and international legal support
  13. Convert local contractors into full-time employees
  14. Business transitions: acquisitions, mergers, close-downs
  15. Need to deal with multiple global employment service providers

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What is a Global PEO?

A Global PEO can expand your business footprint in a new market by providing a single management point for administrative, HR, payroll, and tax compliance functions.

A Global PEO helps you focus on operating your business and doesn’t burden you with managing payroll, taxes, benefits, and compliance matters across multiple jurisdictions.

Co-Employee Arrangement and partnering with a Global PEO allows for expansion to a new market without costly re-organizations or redundancies.

A Global PEO can help businesses establish a presence in foreign markets by helping them recruit local and global talent, create an international HR structure, and meet all regulatory requirements.

The economies of scale, global reach, and technology resources of a global professional employer organization (PEO) allow businesses to achieve operational efficiencies that positively impact business results.

What Services Does a Global PEO (Professional Employment Organization) Provide?

  1. Global Payroll management;
  2. Compliance with local tax rules (file & deposit) of the country where the EOR company is located;
  3. Handling compliant employment contracts:
  4. Background, education, and other checks;
  5. Onboarding and termination processes, as well as employee compensation;
  6. Arranging visas and work permits for employees;
  7. Ensuring the working process is organized under local labor laws;
  8. Processing workers’ medical insurance and other benefits (day-offs, bonuses, and more);
  9. Global employment process maps, matter maps, employment guides, and other documentation.

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Global Employment Challenges and Pitfalls to Avoid

When you’re hiring a staff to work overseas, some challenges come with that far beyond the nuts and bolts of finding and vetting candidates. These challenges are often overlooked by companies when they think only of locally-hired employees, but can have extreme consequences for businesses who employ people internationally.

Why is this? Because if you’re not careful, you might find yourself unwittingly breaking one employment law regulation or another in your new country. This could lead to fines, other legal issues, and negative public exposure for your brand. It’s not just about being bad for your business, though; it’s also about being bad for the people who work in your company.

Employment Taxes

There are many different types of taxes that businesses have to pay, but employment taxes are one of the most important. These taxes can vary significantly from country to country and can be a large portion of a monthly salary.

In-country Employee Registration

It is essential to ensure that employees are properly registered with the local authorities before they start work. Failing to do so can result in penalties for both the employee and the employer.

Payroll Calculations: Country-specific Requirements

In many countries, payroll calculations vary significantly. For example, employees in some countries may receive a 13th and 14th-month salary halfway through the year or at Christmas as standard. Thus, it’s important to be aware of the payroll practices in your country of employment.

Some countries have different rules when it comes to employment contracts. To avoid any surprises, it is crucial to understand how payroll calculations work in your new country. In some cases, you may be responsible for paying your employees for the entire duration of their contract even if they are not performing as expected or you want to end their employment early. This can be a financial shock to foreign employers who are not used to this practice.

For this reason, it is essential to ensure that you review and understand the terms of the employee’s contract before hiring them, so you know what to expect.

End of Financial Year Reporting

The financial year for many countries ends in March and companies that have a presence in more than one country need to produce financial reports for each country and send them to the relevant government bodies. With the end of the financial year approaching, accountants are busy at work preparing reports, some of which can be complex and difficult to navigate through as they may be on foreign websites with little or no English language support. It is important that you get these reports lodged on time as it could result in late payment penalties.

A lot of these reports need to be completed in the local language, so it is recommended that you use an accountant specializing in the country you are based in to ensure compliance before lodgement deadlines.

This is the reason why many companies outsource payroll management to a global Professional Employer Organisation (PEO) as they have experts with deep knowledge of local labour laws and tax regulations in each jurisdiction. In such cases, a Global PEO will ensure compliance with local employment and tax requirements.

Local Employment Contracts Compliance

As an employer, it is crucial to have local employment contracts that are compliant with the law of the jurisdiction in which your employees work. These contracts should be provided in both English and the local language. Do not simply copy and paste your existing contract template from your home country – this could result in non-compliance and serious legal consequences.

When recruiting employees for your business, it is critical to ensure that their employment contract is appropriate for the country where they will be working. A Spanish employment contract may not be valid in Latin America, simply because they are both Spanish-speaking countries.

The language of the employment contract is a crucial detail to keep in mind during the recruitment process, as non-compliance to target country employment laws or any mistakes with the paperwork could cost you money, time, and potentially your business’s reputation.

Employment Contract Termination

The employment termination process can be just as important as the hiring process. This part of employment that should not be taken lightly as it can have many implications and consequences, both for the employer and the employee. Therefore, it is important to carefully consider all aspects of the situation before making a decision.

The start of termination process begins when the employee signs the employment contract. If the termination guidelines are clear and precise from terminating an employee will be much smoother.

When setting out the terms of employment, it is important to be clear about the notice period (making sure it’s aligned with the country-specific regulations), and what is expected in terms of returning company equipment and a credit card or cash float balance. Non-compete clauses protecting your intellectual property are also important considerations. Doing so will help avoid misunderstandings and potential legal problems down the road.

If an employer does not have clear procedures for the termination in their employment contract, they may face litigation. If an employee feels they have been mistreated, they may become disgruntled and contest the termination legally. This can be costly and difficult, especially if the dispute is in another country with a different time zone and language.

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How to Choose a Global PEO (Professional Employer Organization) in Nigeria?

The globalization of businesses, including outsourcing domestic positions and opening overseas offices, has created a greater demand for professional employer organizations (PEOs). These companies provide human resources (HR) services to their clients. They are categorized as third-party global employment businesses that handle payroll and benefits administration, tax withholdings, compliance with employment regulations, and other client HR-related obligations. PEOs offer their services through contracts that can be long-term or short-term in nature. A PEO is a good choice if you plan to outsource your global employment and HR functions or open an office in another country or a set of countries.

The first step in choosing a global PEO is understanding how these companies operate. Their primary function is to manage all the HR activities of the company they work with. This includes providing payroll services, managing employee benefits and finances, offering legal advice on employment issues, and handling training programs and other related functions.

Global PEOs can also help you if you’re looking to expand your business operations overseas by providing support for establishing an office abroad. They can help you determine the best location for your new operation based on the local employment cost, key personnel availability, available infrastructure and talent pool, immigration compliance, cost of living, legislation compatibility, government regulations and incentives by country, ease of business travel, and more.

Acumen International – Your Single Point of Truth and Global Employment PEO Solutions Provider in Nigeria

  1. 100 % compliant, quick, easy market entry. Acumen Global PEO is your local legal entity, helping you reduce the cost and time associated with incorporating.
  2. Immediate global employment service coverage in 190 countries
  3. Both a single point of contact and a dedicated account manager for your project for all target countries.
  4. Compliant and secure global employment operations. We help you adhere to all local laws and regulations in 190 countries
  5. A single contract for all in-country services (employment, immigration, legal, etc.)
  6. A single PEO provider assumes full responsibility for your international employees in multiple countries
  7. Payments are made within the UK or to the UK bank company account
  8. Fully compliant with standardized procedures and reporting systems
  9. You can delegate to Acumen Global PEO all HR responsibilities, Payroll & benefits administration, background checks, and HR helpdesk
  10. Standard payroll breakdowns for all target countries
  11. As soon as we receive your request for a project in any country, we will send you a payroll breakdown and offer within 2 working hours
  12. Full 100% fee money-back guarantee for the employee or contractor payment delays.
  13. Tailored and 100% compliant employment contract drafts
  14. With Acumen in your corner, you can quickly and easily onboard and compensate your employees without the risk of legal repercussions
  15. Acumen Global PEO and Payroll solution protects your company’s Intellectual Property rights

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What Makes Acumen International’s Global PEO Different?

As your organization looks to expand globally, many potential benefits will be gained. However, many companies face various challenges before these benefits can be realized. By being aware of these potential hurdles, your company can be better prepared to overcome them and reap the rewards of global expansion.

Acumen International is a leading provider of global EOR and PEO services, offering secure and efficient solutions for businesses that manage international payroll, HR & benefits administration across 190 countries. Our full-service management solutions are tailored to each client’s needs and can include everything from legal talent employment to benefits management and compliance with payroll and taxation.

Global Payroll Calculator: Accurate Global Employment Cost Estimation

You may not choose the most cost-effective and business-friendly country when hiring employees and contractors globally.

  • Do you know which country is the most cost-effective place to hire employees?
  • What are the costs of entity establishment and legal representation?
  • What are the payroll costs and management fees?
  • What are your ongoing annual tax compliance costs?
  • Are you fully aware of banking implications?
  • Did you know that labor laws and hidden costs could make your company less efficient when choosing a country to run your business?
  • Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?
  • How to hire international teams without setting up a local entity?

Countries have different labor laws, compliance, and tax regulations. What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labor, and immigration requirements, you could have all the information of 190 countries at your fingertips?

The Global Payroll Calculator is built by Acumen International to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.

Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.

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International Global Payroll and Taxation in Nigeria

Employment-related taxes

Personal income tax (PIT). Individuals resident in Nigeria are taxable on their worldwide income.

In the case of employment, a non-resident person is liable to tax in Nigeria if the duties of employment are wholly or partly performed in Nigeria, unless:

  • The duties are performed on behalf of an employer in a country other than Nigeria.
  • The employee’s remuneration is not borne by a fixed base of the employer in Nigeria.
  • The employee’s remuneration is liable to tax in that other country under the provisions of a double taxation treaty (DTT) with that other country.

Nontaxable payments. The following income streams are tax-exempt:

  • Reimbursement of expenses incurred by the employee in the performance of their duties, and from which the employee is not expected to make any profit
  • Retirement gratuities and compensation for loss of office
  • Interest on loans for developing an owner-occupied residential house.

Payroll Cycle in Nigeria

Wages must not be paid at intervals of more than one month, or on certain premises, except if the employee is employed on the premises.

Non-payroll Taxes in Nigeria

Zero-rated items include non-oil exports, goods and services purchased by diplomats, and goods and services purchased for humanitarian donor-funded projects.

Government agencies and oil and gas companies are required to deduct at-source VAT charged by their suppliers and remit it to the tax authority. All other organizations must collect VAT charged on their invoices from their customers for filing and payment to the tax authority.

The Finance Act has introduced a reverse charge mechanism for services from which no tax invoice was received. VAT returns is now to be filed on cash basis.

The FIRS has implemented a platform for auto tracking and remittance of VAT known as FIRS VAT-Collect. Some of the system’s users are domestic airlines (for instant VAT remittance on ticket sales) and other retailers.

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How Acumen’s International PEO and Payroll Service can Benefit Your Business in Nigeria

Compensating your local and foreign workforce in Nigeria and closely adhering to Nigerian taxation requirements can divert your attention and resources from activities that help your business grow. A reliable global employment solution like Acumen’s Global PEO and Payroll service can take a substantial burden off your shoulders so you can focus on running your company.

Outsourcing the administrative and compliance tasks involved in employee payroll is one approach, but we have a better solution. Acumen International offers a global PEO and payroll solution that goes beyond outsourcing. We hire and compensate your global workforce on your behalf and take care of all the payroll details while ensuring full compliance with Nigerian labor and taxation laws.

Our comprehensive global PEO and payroll services are just some benefits of partnering with Acumen International. We make it easy for you to achieve your business goals in Nigeria by officially employing and compensating your best-selected global talent – local and foreign – without concerns for legal and compliance risks faced by global employers.

It is important to note that Acumen does not provide international global payroll services as a standalone solution, but only as a part of our global PEO and Payroll solution.

Disclaimer: Any of the above information is subject to changes imposed by Nigerian laws. To get the latest updates on taxation in Nigeria and in 190 countries worldwide, contact Acumen’s team of global employment experts.

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