Almost half of Nigerian workers earn less than $150 monthly, report finds

A recent salary report by PaidHR, a Nigerian human resources and payroll startup, has revealed that nearly half of the country's workers earn less than $150 per month. The report analyzed payroll records for over 25,000 workers across more than 400 employers, providing insights into the formal labor market in Nigeria. The findings indicate a significant divide between the lowest and highest earners, with 46 out of 100 workers earning below $150 monthly, and only 10 earning at least $751.93.

PaidHR's CEO, Seye Bandele, explained that this distribution suggests Nigeria's workforce is not evenly distributed as a middle class, but rather a two-tier labor market with a large group earning low wages and a smaller group earning substantially more. In Q2 2024, Nigeria's labor force participation rate stood at 79.5%, with formal employment accounting for 7.0% to 7.3% of the total employed workforce.

However, only a small fraction of workers receive a regular wage from an employer. The median salary, representing the middle earner when all salaries are ranked from lowest to highest, is ₦217,000 ($163.17) gross and ₦199,972 ($150) net after deductions. At the lower end, 10 out of 100 workers earn below the national minimum wage, which was set at ₦70,000 ($52.64) in 2024.

The report also highlights the potential for stagnation in salary growth beyond the five-year mark with the same employer, as market rates may outpace company salary reviews. The report explains that this "five-year wall" occurs when staying with the same employer no longer results in the same salary gains as in the early years.

Additionally, the report reveals a gender pay gap, with women earning about 81 kobo for every dollar men earn at the median salary. Despite Nigeria's technology and fintech sector attracting significant venture funding, the report suggests that this funding does not necessarily lead to higher salaries. The gap in earning potential exists because workers' positions in the labor market, including factors like industry and experience, can greatly influence their salary growth.