NIGERIA – Expatriate Employment Levy Introduced

March 12, 2024

After significant pushback, Nigerian authorities have paused the controversial Expatriate Employment Levy (EEL) that was introduced by President Bola Tinubu earlier this month.

Originally intended to encourage Nigerian companies to hire local talent where possible in order to reduce unemployment rates, the original iteration of the EEL required employers to pay a significant annual fee for each of their foreign employees. In addition to the EEL’s high cost, the implementation and deadline dates (15 March 2024 and 15 April 2024 respectively) did not provide sufficient time for affected companies to plan and budget for the increased costs.

The Nigerian Ministry of the Interior advised that the pause will allow for additional “dialogue among stakeholders.” At the time of this writing, the future of the EEL remains unknown.


Expatriate Employment Levy

A full draft of the EEL Handbook has been published by the NIS and is available here.

The most notable details of this handbook include:

  • To whom and for which companies does the EEL apply?
    • Employers are liable to pay the EEL for each applicable foreign national employee. This applies to all private sector companies of all sizes and in all industries.
    • Foreign employees must be employed for a duration not less than 183 days within a year, which is calculable on aggregate over one (1) fiscal year.
      • Holders of Temporary Work Permits for seasonal and short-term employment shall use this 183-day threshold to determine whether an EEL will apply.
    • Cross-border assignments and secondments will be subject to the EEL where the foreign national employee occupies a Quota Position for the Nigerian company.
    • Foreign nationals employed in the public sector, accredited staff of Diplomatic Missions, and government officials and their dependents are exempt from the EEL.
  • How much is the EEL?
    • Director-level employees: USD 15,000 per employee per year
    • All other employees: USD 10,000 per employee per year
  • How is the EEL paid?
    • Employers will be able to pay the EEL via the EEL Management System (EELMS) online portal here:
    • Employers may be required to provide proof of EEL payment at the time of an expatriate’s work permit issuance, contract renewal, or change of employment.
  • Are there any documents issued after paying the EEL?
    • Yes – upon payment of the EEL, an EEL card will be issued. The Nigerian authorities have advised that this card will be required for foreign employees to enter and exit Nigeria.
  • What are the potential consequences for non-compliance with the EEL?
    • Employers that fail to file an EEL within the required timeframe, fail to register a new employee, provide false or forged information, and that fail to renew an EEL prior to its expiry date, will possibly face a monetary fine of NGN 3,000,000 for each violation.

Newland Chase Insights

Nigerian companies who currently employ foreign nationals or with upcoming plans to employ them must take close note as the implementation and enforcement of this new EEL is quickly arriving. Combined with the significant annual cost of the levy per foreign employee, companies with foreign talent may be considerably impacted.

This will be particularly challenging for companies and industries who currently employ and rely on foreign workers as the EEL payments for this group of employees will all be due prior to 15 April 2024.

Newland Chase continues to monitor this situation closely and will report on any further announcements from the Nigerian authorities. It is expected that the NIS will provide further updates shortly, especially regarding the implementation process.

This immigration update is for informational purposes only and is not a substitute for legal or scenario-specific advice. Furthermore, it is important to note that immigration announcements are subject to sudden and unexpected changes. Readers are encouraged to reach out to Newland Case for any case- or company-specific assessments.