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The short answer
Most Nigerian restaurants pay cooks and supervisors a fixed monthly salary, waiters a base salary sometimes topped up from a service charge or tips, and casual staff per shift. The national minimum wage is ₦70,000 a month. If you add a service charge to bills, show it alongside the menu prices, because the FCCPA bars charging more than the displayed price, and set out in writing how it is shared with staff.
Staff are usually a restaurant's second-largest cost after food, and the area where informal arrangements cause the most trouble: verbal promises about service charge, cash wages with no record, deductions for broken plates. A clear structure costs nothing and protects both sides.
Common structures, by role
These are typical arrangements, given as examples rather than rules or market rates.
| Role | Common structure (example) | Notes |
|---|---|---|
| Head cook or chef | Fixed monthly salary | Sometimes a bonus tied to food cost or hygiene targets |
| Line cooks and kitchen assistants | Fixed monthly salary | Overtime or shift allowance for long days |
| Waiters | Base salary plus a share of service charge or tips | The base should stand on its own |
| Cashier or supervisor | Fixed salary, sometimes a cash-handling allowance | Responsible for reconciliation |
| Cleaners, dishwashers | Fixed salary or daily rate | Often part-time or casual |
| Casual event staff | Per shift | Written terms even for one-off shifts |
Minimum wage and PAYE
The national minimum wage is ₦70,000 a month, and under the Nigeria Tax Act 2025 employees earning the minimum wage or less are exempt from PAYE (DLA Piper, August 2026). Above that, PAYE applies: the first ₦800,000 of annual taxable income is at 0% and the next ₦2.2 million at 15%. Bonuses and 13th-month pay are taxable. If you employ three or more people, the Pension Reform Act applies (PenCom), with at least 10% from the employer and 8% from the employee (ThisDay, March 2023).
Service charge: the rules that apply
We found no Nigerian law that sets how a restaurant must share a service charge. Two rules do apply around it:
- Show it before the customer orders. Section 115 of the FCCPA 2018 requires prices to be displayed and bars requiring a consumer to pay more than the displayed price. A service charge that appears only on the bill is, in effect, a higher price than the one displayed. Put the charge on the menu, for example "a 10% service charge is added to all bills" (the percentage is an example).
- It is not tax. In Lagos, the 5% consumption tax is separate, borne by the customer and remitted to the state (LIRS, reported by TechEconomy, October 2023). Do not describe a service charge as tax, or merge the two on the bill.
A written service charge policy
If you tell staff the service charge is theirs, put the policy in writing and follow it. Decide:
- What share goes to staff (all, or a stated percentage after card processing costs).
- Who shares: front of house only, or kitchen too.
- How it is divided: equal shares, points by role, or hours worked.
- When it is paid: with monthly salary, through payroll, with a payslip line.
- How cash tips handed to individual waiters are treated.
Paying service charge through payroll keeps the record clean and means PAYE is handled correctly on what is, for the employee, part of their pay.
Worked example
Example figures. A restaurant collects ₦600,000 in service charge in a month and passes 80% to staff, keeping 20% for card costs and breakages under its written policy. Staff share ₦480,000 on points: 6 waiters at 3 points, 4 kitchen staff at 2 points, 1 supervisor at 4 points, which is 18 + 8 + 4 = 30 points, so ₦16,000 per point. Each waiter gets ₦48,000, each kitchen staff member ₦32,000 and the supervisor ₦64,000. Check: (6 × 48,000) + (4 × 32,000) + 64,000 = 288,000 + 128,000 + 64,000 = ₦480,000.
Casual and probation staff
Casual workers hired for busy weekends or events still need a record: name, shift, rate and signature on payment. New staff on probation should know in writing how long it lasts and what pay applies during it. Paying a lower rate during probation is a common practice, but it should still respect the minimum wage for full-time work.
What the Labour Act requires
- A written statement of terms within three months of starting: pay, how and when it is paid, hours, holidays, notice (s.7).
- Wages paid in legal tender; payment by cheque only with the worker's prior written consent (s.1).
- No deductions for fines. A deduction for loss caused by wilful misconduct or neglect needs the prior written consent of an authorised labour officer (s.5). Broken plates and cash shortages are not automatic deductions.
- Wages due at the end of the agreed period, at intervals of no more than a month (s.15).
For tax calculations, see how to calculate PAYE step by step and running payroll in Nigeria, and for the cash side of service, daily cash control for a restaurant.
What to check first
- Does every staff member have written terms?
- Is anyone paid below ₦70,000 a month for full-time work?
- Is the service charge displayed with your menu prices?
- Is there a written policy on how it is shared, and is it followed?
Where Pryme fits
Pryme Business Payroll can run salaries and service-charge shares in one approved batch with a payslip line for each.
Questions people ask
How much are waiters paid in Nigeria?
It varies by restaurant and city. Full-time staff must be paid at least the national minimum wage of ₦70,000 a month unless an exemption applies; many restaurants add a share of service charge or tips.
Is service charge compulsory in Nigerian restaurants?
No law requires restaurants to add one. If a restaurant does, it should display the charge with its prices, because the FCCPA bars charging more than the displayed price.
Do waiters get the service charge?
Only if the restaurant's policy says so. We found no Nigerian law setting how service charge is shared, so ask for the written policy.
Can a restaurant deduct broken plates from salary?
The Labour Act forbids deductions for fines. A deduction for loss from wilful misconduct or neglect needs the prior written consent of an authorised labour officer.
Sources
- DLA Piper Africa: FAQs on payroll taxes and employer liability (28 Aug 2026) · accessed Oct 2026
- Section 115, Federal Competition and Consumer Protection Act 2018 (LawGlobalHub) · accessed Oct 2026
- Labour Act, full text (Cap L1 LFN 2004) · accessed Oct 2026
- TechEconomy: LIRS tasks businesses on 5% consumption tax compliance (Oct 2023) · accessed Oct 2026
- ThisDay: CPS, what you should know about employees' rights (20 Mar 2023) · accessed Oct 2026
- PenCom: Framework for Micro Pension Plan · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.