The minimum wage is ₦70,000 — but the number on the payslip is only part of what an employee actually costs you. If you employ people, or are about to, here is the full picture.
Nigeria’s national minimum wage is ₦70,000 a month. That figure is settled in law, but two things about it confuse small business owners. The first is who it actually applies to. The second is that the wage itself is not the full cost of employing someone — and the gap between the two is where unprepared businesses get hurt.
Does the ₦70,000 floor even apply to you?
Generally, businesses with fewer than 25 employees fall outside the strict statutory minimum-wage requirement. If you run a five-person shop, the law is not forcing you to pay each person ₦70,000. That said, enforcement across the economy is uneven and driven more by union pressure and government-contract conditions than by routine inspection. Lagos State pays its own workers ₦85,000, several northern states have struggled to implement the ₦70,000 figure at all, and organised labour is already pushing for a rise toward ₦154,000.
So the practical reality is mixed: many small employers are not legally compelled to hit ₦70,000, but paying fairly is increasingly a matter of staff retention and reputation rather than pure compliance.
The hidden costs: what an employee really costs
This is the part that catches people. When you formalise an employee, the salary is only the beginning. Depending on your size and sector, you may also be responsible for pension contributions (PenCom), the National Social Insurance Trust Fund (NSITF), the Industrial Training Fund (ITF), and, where applicable, housing (NHF) and health contributions. Each has its own rate, its own agency and its own remittance deadline.
Budget the full employment cost — salary plus statutory contributions — not just the take-home pay you negotiated.
The lesson is simple but easy to miss: when you agree a salary, you have not agreed your total cost. A business that budgets only for take-home pay will be surprised by its real payroll burden, and that surprise usually arrives as a cashflow problem.
One piece of good news on tax
Under the 2026 tax rules, employees earning up to the minimum wage are exempt from PAYE income tax. That puts a little more in your lowest-paid staff’s pockets without costing you more — a small win worth knowing about when you structure pay.
Plan for the increase that’s coming
The statutory wage-review cycle was shortened from five years to three, and unions are agitating for an upward revision sooner. Treat ₦70,000 as a floor that is more likely to rise than fall, and build a little headroom into your payroll planning so a future increase does not blindside you.
| ✓ YOUR ACTION CHECKLIST |
| ❑ Count your employees — are you above or below the 25-staff line where the wage floor bites? |
| ❑ If the floor applies, ensure no employee’s basic pay sits below ₦70,000. |
| ❑ Calculate the FULL cost per employee: salary plus pension, NSITF, ITF and NHF where they apply. |
| ❑ Register staff for PAYE and remit correctly — minimum-wage earners are now PAYE-exempt. |
| ❑ Set aside a contingency for a possible wage increase during the year. |
| ❑ Keep payroll to a healthy share of total costs — track it monthly with a cashflow tool. |
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