Withholding tax (WHT) in Nigeria: rates and how to calculate it
WHT rates for professional fees, rent, construction, supply of goods and more under the 2024 regulations, with a worked example.
Withholding tax (WHT) is an advance payment of income tax. When you pay certain suppliers, you deduct a percentage from their invoice, pay that amount to the tax authority, and give the supplier a credit note they can use against their own tax.
WHT rates (Deduction of Tax at Source Regulations 2024)
| Type of payment | Resident | Non-resident |
|---|---|---|
| Professional, consultancy, technical and management fees | 5% | 10% |
| Rent, hire or lease of property and equipment | 10% | 10% |
| Dividends, interest and other distributions | 10% | 10% |
| Royalties (company / individual) | 10% / 5% | 10% / 5% |
| Construction (roads, buildings, bridges, power plants) | 2% | 5% |
| Supply of goods (not a manufacturer's ordinary sales) | 2% | 5% |
| Brokerage fees | 5% | 10% |
| Insurance commission | 2% | 5% |
| Directors' fees (individuals) | 15% | 20% |
| Lottery, gaming and similar winnings | 5% | 5% |
| Any other service not listed | 2% | 5% |
If the supplier doesn't provide a Tax Identification Number (TIN), the rate is doubled.
How to calculate it
WHT is worked out on the amount before VAT. If the invoice includes VAT, take the VAT out first.
- Consultancy invoice: ₦500,000 + ₦37,500 VAT = ₦537,500
- WHT at 5% of ₦500,000 = ₦25,000
- You pay the consultant ₦512,500 and remit ₦25,000 as WHT
Small transactions and some businesses are exempt from WHT under the 2024 regulations. Check the rules for your case with a tax adviser.
