How to Calculate Leave Bonus in Nigeria 

Employees in Nigeria are entitled to paid time off work for at least six working days a year, according to the Nigerian Labour Act 1990 and other amendments. During this time off, employees can rest, engage in personal development, travel, go on vacation, or do whatever they feel is best for them. Aside from employees being entitled to their full salary when off work, the law also mandates employers to pay employees leave bonuses. In this article, we’ll be exploring key insights about annual leave benefits in Nigeria. Read on. 

How to Calculate Leave Bonus in Nigeria 

 How to calculate leave bonuses in Nigeria would be discussed below:

  • What is the Duration of Leave in Nigeria?

According to the provisions of the Nigerian Labour Act, employees in Nigeria who have worked for a minimum of 12 consecutive months are entitled to leave with full pay. If the employee is an adult, he/she is entitled to at least six working days off work, but for apprentices and teenagers under the age of 16 years, the leave duration is a minimum of twelve days. The law also provides that employees can accumulate their annual leave for a maximum of two years. And if after the second year, an employee fails to go on the accumulated leave, it will be forfeited. 

It is important to note that approved public holidays, such as New Year’s Day (1st January), Good Friday, Easter Monday, Worker’s Day (1st May), National Day (1st October), Christmas Day (25th December), Eid ul Fitr, Id el Kabir, and Id el Maulud, cannot be counted as part of an employee’s annual leave. In addition, sick leave is not annual leave deductible as the number of days spent attending to ill health cannot be deducted from an employee’s annual leave. 

  • What is the Procedure for Granting Annual Leave in Nigeria? 

When an employee might have worked for twelve continuous months and wants to go on his/her annual leave, there are procedures to follow. The first step would be for the employee to make a formal request for annual leave on or before the completion of one year of continuous service. 

The application for annual leave should be made through the employee’s immediate supervisor; who will endorse the same and send it to the Human Resources department. Why it is advised for employees to go through this route is to ensure the organization’s operation is not affected due by a shortage of manpower as a result of absence from work the worker.  

The HR normally puts the approval for the annual leave of employees in writing, stating the date the leave is to start and when the employee is expected to report back to work. Employees may be expected to state in the application form where they would be spending their leave. The reason for this is to enable HR to easily reach out to them should there be any operational exigency requiring the worker to be present.

When the employee’s application for leave has been approved, it should be copied to the worker’s line manager/direct supervisor and the Finance and Account department for processing of leave allowance. In addition, the employee’s leave application and approval letter ought to be kept in both the employee’s file and the HR file. 

  • What is Leave Bonus and How is it Calculated In Nigeria?

The Nigerian Labour Act mandates employers of labour in Nigeria to pay employees their full salary during the period they are off duty due to leave. The law, however, forbids employers to provide their employees with monetary compensation in place of their entitled holiday, unless the employee’s employment is terminated.  

Aside from employees being entitled to their full salary during the period of their leave, they are also entitled to leave benefits for the number of days they stay off work. However, there is no one-size-fits-all approach to calculating the leave bonus of employees in Nigeria. How leave bonus is calculated for employees is usually dependent on the organization they work with, their contract of employment, or collective agreement. 

Having established that there is no standard method to calculate the leave bonus an employee is entitled to in Nigeria, there are some popular methods some employers use for calculating leave allowances in Nigeria. One of those methods is that some employers calculate their employees’ leave allowance as a percentage of the basic/net/annual salary of the employee. For instance, an employer may choose to provide a leave bonus that equals 10% or 20% of the employee’s basic/net/annual salary. Another employer may choose to provide an employee with 50% of his monthly net salary as a leave bonus.

Another popular method some employers use for calculating leave bonuses for their employees is offering a fixed amount as a leave bonus. The fixed amount may be based on the salary level of the employees or based on their grade levels. For example, an employer may provide employees on leave with a bonus of N20,000 for each day, or N30,000 for Junior Executives, N40,000 for Mid-level Executives, and N60,000 for Senior Executives. 

Leave travel allowance is another method employers in certain industries or companies in Nigeria, compensate their employees during their leave period. This bonus is usually intended to cover the employee’s transport expenses during the leave period. 

Regardless of the type of method an employer uses to calculate the leave bonus of an employer, the payment of the leave bonus should be made to the employee before he/she proceeds on leave. 

  • Can an Employee Be Entitled to Leave Bonus for Working Less Than a Full Year? 

Although the Nigerian Labour Act specifies that employees in Nigeria are entitled to annual leave after attaining twelve months of continuous service, circumstances such as redundancy, termination of appointment, and incapacitation, may make an employee qualified for a leave bonus without attaining twelve months of continuous service. However, the employee must have completed:

  • Less than twelve but not less than six months in the continuous employment of an employer; or
  • Not less than six months of continuous employment of an employer since last qualified for a holiday

In the above situations, such an employee is entitled to be paid a leave bonus calculated proportionally by days. That is to say, an employee that worked for six continuous months shall be entitled to a leave bonus of at least three working days. 


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