A client pays you less than you invoiced. That is withholding tax, and it is not a deduction — it is tax paid on your behalf, which counts against your own bill when you file.
Nigeria withholding tax calculator
See what reaches your account after a client in Nigeria withholds tax from your invoice, at the 2024 Withholding Regulations rates, with and without VAT.
The rates
Under the Deduction of Tax at Source (Withholding) Regulations 2024, in force since January 2025:
| Payment | Rate |
|---|---|
| Professional and consultancy services | 5% |
| Supply of goods, other than by the maker | 2% |
| Construction of roads, bridges, buildings and power plants | 2% |
| Rent | 10% |
| Dividends, interest and royalties | 10% |
A small supplier with a tax identification number is not withheld from where its dealings with that client come to no more than ₦2,000,000 in the month.
The two things people get wrong
VAT goes on, WHT comes off — and off the amount before VAT. If you charge VAT, you add 7.5% to your fee. The client then withholds tax worked out on the fee alone, not on the invoice total.
The evidence is the whole point. Without proof that tax was withheld and paid over, you cannot claim the credit, and you have simply been paid less. Ask for the receipt or credit note when you are paid, not at the end of the year.
Where it goes
If you are an individual living in Lagos, tax withheld from you belongs to the LIRS, and counts against your personal income tax. A company’s goes to the federal NRS. A client that remits yours to the wrong one has not lost you the money, but it will cost you letters to get the credit.
The VAT you charged was never your money
You collected it for the NRS and you owe it. Businesses that treat VAT receipts as income discover the problem at the worst possible moment.
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