Is it better to contract or be employed in Nigeria?

At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in Nigeria: a contractor keeps about $150,680 against an employee's $119,392, a difference of $31,288. The break-even rate — where the two are equal — is about $79/hour. Personal income tax (PAYE); private health typical.

What hourly rate do I need to charge in Nigeria?

To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $89/hour, or a day rate around $710. That assumes $127,848 of gross revenue across 1440 billable hours.

Why is the contractor tax rate in Nigeria different from the employee rate?

A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 22% effective for a contractor against 18% for an employee. Personal income tax (PAYE); private health typical.

How accurate are these Nigeria figures?

These are single blended effective rates, not a bracket-by-bracket calculation, and Nigeria is outside the OECD series this site cross-checks against. Real liability depends on your regime, deductions and region. Estimates for comparison, not tax advice.

Contracting · Nigeria

Contractor or employee in 🇳🇬 Nigeria?

At $100/hour, contracting nets more than employment — the break-even rate is about $79/hour.

Side by side at $100/hour

	Contractor	Employee
Gross	$192,000	$145,600
Tax	$40,320	$26,208
Health insurance	$1,000	—
Net	$150,680	$119,392
Effective rate	22%	18%

Personal income tax (PAYE); private health typical. Run your own rate in the interactive calculator.

To take home $100,000 a year

You need to charge about $89/hour (day rate $710), billing 1440 hours across the year for $127,848 of gross revenue.

Change the target in the required-rate calculator.

Countries with a similar contracting premium

🇸🇬 Singapore — +13% for contracting
🇬🇧 United Kingdom — +13% for contracting
🇪🇪 Estonia — +14% for contracting
🇵🇭 Philippines — +12% for contracting

Questions

Is it better to contract or be employed in Nigeria?: At $100/hour against a salaried equivalent of $70/hour, 40 hours a week, contracting nets more than employment in Nigeria: a contractor keeps about $150,680 against an employee's $119,392, a difference of $31,288. The break-even rate — where the two are equal — is about $79/hour. Personal income tax (PAYE); private health typical.
What hourly rate do I need to charge in Nigeria?: To take home $100,000 a year after tax, health cover and unpaid time, you need roughly $89/hour, or a day rate around $710. That assumes $127,848 of gross revenue across 1440 billable hours.
Why is the contractor tax rate in Nigeria different from the employee rate?: A contractor usually pays both halves of social contributions where an employer would otherwise pay one, and often buys health cover privately. Here that works out at about 22% effective for a contractor against 18% for an employee. Personal income tax (PAYE); private health typical.
How accurate are these Nigeria figures?: These are single blended effective rates, not a bracket-by-bracket calculation, and Nigeria is outside the OECD series this site cross-checks against. Real liability depends on your regime, deductions and region. Estimates for comparison, not tax advice.

Estimates for comparison, not tax advice. Effective rates are blended, not bracket-by-bracket except where noted, and every country has regimes and deductions a single rate cannot express.