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The short answer
An employee who resigns must give the notice in their contract, and for workers covered by the Labour Act at least the statutory minimum: one day up to three months' service, one week to under two years, two weeks to under five years, and one month after five years. All wages due must be paid on or before the notice expires, and final pay usually includes salary to the last day, accrued leave and any earned commission, less only lawful deductions.
Notice the employee must give
Section 11 of the Labour Act works both ways: "either party" may end the contract by notice. For covered workers the minimums are:
| Length of continuous employment | Minimum notice |
|---|---|
| Three months or less | One day |
| More than three months, under two years | One week |
| Two years to under five years | Two weeks |
| Five years or more | One month |
Notice of a week or more must be in writing, and the day notice is given does not count. The contract may require longer notice, which is common for managers, and it binds both sides. Under section 11(6), either party can waive notice or accept payment in lieu, so an employee can buy out a notice period, and an employer can let someone go early by paying for the rest of it.
When an employee leaves without serving notice
If an employee walks out without notice, they are in breach of contract. The employer's remedy is a claim for the loss caused, often set at the pay for the notice not served, and many contracts say that an employee who fails to give notice forfeits, or must pay, an amount equal to the notice period. For a covered worker, offsetting that against final wages is still a deduction and must respect section 5: no fines, and total deductions no more than one third of the month's wages. Anything beyond that has to be agreed or claimed separately.
Handover: can you hold final pay until it is done?
Section 11(7) is clear: "All wages payable in money shall be paid on or before the expiry of any period of notice." Holding the last salary until a laptop is returned or a handover note is written is therefore not lawful for covered workers. Plan the handover inside the notice period instead:
- Agree a handover list on the day notice is received: open tasks, passwords, customer contacts, keys, devices.
- Set a date for each item before the last day.
- Revoke system access on the last day, and change shared passwords.
- Recover company property by agreement; where something is not returned, the employer can seek its value through a written agreement or a claim, not by withholding wages.
Computing final entitlements
A typical final payment includes:
- Salary to the last day, pro-rated if the person leaves mid-month.
- Accrued annual leave not taken. Section 18(4) gives a minimum pro-rata payment where someone leaves after six to twelve months; the contract often gives more, and the contractual leave entitlement is what most employers pay out.
- Commission or bonus earned up to the last day, under the plan's rules.
- Pay in lieu of any notice the employer waived, on basic money wages excluding overtime and allowances.
- Expenses due for reimbursement.
And it may lawfully deduct:
- PAYE and the employee's pension contribution on the final pay;
- the unrecovered part of a salary advance, within the one-third ceiling;
- overpayments made in the three months before discovery; and
- other deductions the employee has agreed to in writing, such as a staff loan, within the ceiling.
Worked example
Example only. An employee on ₦220,000 a month (₦150,000 basic plus ₦70,000 allowances) resigns with the contract's one month's notice and leaves on 15 June. June has 22 working days, of which they work 11. They have 6 days of contractual leave untaken and an unrecovered advance of ₦40,000.
| Item | Calculation | Amount |
|---|---|---|
| June salary to the 15th | ₦220,000 × 11 ÷ 22 | ₦110,000 |
| Untaken leave (6 days at full daily pay, per contract) | ₦220,000 ÷ 22 × 6 | ₦60,000 |
| Gross final pay | ₦110,000 + ₦60,000 | ₦170,000 |
| One-third ceiling on deductions | ₦170,000 ÷ 3 | about ₦56,667 |
| Advance recovered | Within the ceiling | ₦40,000 |
PAYE and pension are then worked out on the gross, and the pension for June remitted within seven working days of the final payment; see how to remit staff pension. Whether PAYE and pension count within the one-third ceiling is a point to confirm with an adviser.
Receiving the resignation
Ask for the resignation in writing, with the intended last day, even where the contract allows one day's notice. Reply in writing too: acknowledge the date, confirm the notice period and last working day, list what final pay will include and when it will be paid, and set out the handover plan. If you want the person to leave early, say whether you are waiving notice and paying in lieu, or asking them to stay away while still on pay; the two have different effects on the last day of employment and on when final wages fall due. A short, dated exchange like this prevents most later disputes about dates and money, and it is the record a labour officer or the court will ask for if one arises.
Where Pryme fits
Final pay can be sent from a Pryme Business Account through payroll with each item on its own line, and the employee can receive a verifiable statement of the payment, produced with VerifyDoc.ai, for their next employer or a landlord. If you are letting someone go rather than accepting a resignation, see redundancy and what you must pay.
Questions people ask
How many days' notice must I give when resigning in Nigeria?
What your contract says, and for workers covered by the Labour Act at least one day to one month depending on length of service.
Can my employer hold my last salary until I hand over?
For covered workers, no. Section 11(7) requires wages due to be paid on or before the end of the notice period.
Can I pay my employer instead of serving notice?
Yes, if they accept. Section 11(6) allows either party to accept payment in lieu of notice.
Will I be paid for leave I did not take when I resign?
Usually yes. The contract normally sets the amount, and section 18(4) gives a minimum pro-rata payment for some leavers.
Sources
- Labour Act (Chapter 198 LFN 1990, now Cap L1 LFN 2004), full text · accessed Oct 2026
- ThisDay: CPS, what you should know about employees' rights (20 Mar 2023) · 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.