Kemi runs a consulting firm in Abuja. Last month a client paid her ₦380,000 instead of ₦400,000 and said "we deducted WHT." She had no idea what rate they used, whether it was correct, or what to do with the credit note they sent.
If you have ever been in that position — or if you are the client trying to work out what to deduct — this page has the answer in one place.
These rates are set by the Nigeria Tax Act 2025 (NRS) and are in force from 1 January 2026. The payer (your client, or your company if you are making the payment) deducts the percentage shown from the gross amount before paying.
If your income type is not on this list, your client should not be deducting WHT. Ask them which category they applied and request a corrected payment if they have deducted in error.
The rate applies to the gross amount — the full invoice value before VAT and before any deduction.
Her client remits the ₦40,000 directly to the Nigeria Revenue Service (NRS), formerly known as FIRS. Kemi receives a WHT credit note for ₦40,000.
That ₦40,000 is not lost. It is an advance payment of her income tax for the year. When she files her annual Company Income Tax (CIT) or Personal Income Tax (PIT) return, she deducts it from what she owes.
When a company deducts WHT from your payment, they are legally required to give you a withholding tax credit note (sometimes called a receipt or certificate).
This document shows:
Keep every WHT credit note you receive. They are the evidence you submit with your annual tax return to claim the credit. A lost credit note means you lose the offset.
Not every client who pays you is required to deduct WHT. The obligation depends on the type of organisation making the payment:
So if a sole trader buys your consulting services, no WHT applies. If a registered company does the same job, they must deduct 10%.
Three situations where WHT is not deducted even when the payer is a company:
This is the part most business owners miss. The WHT your clients deduct is not extra tax on top of your regular bill — it is part of your regular bill, paid in advance.
At the end of your financial year:
① You file your CIT or PIT return and work out the total tax you owe on your profit.
② You add up all the WHT credit notes you received during the year.
③ You subtract the WHT total from your tax bill.
④ You only pay the difference to NRS.
If the WHT total is more than your tax bill, you can apply the excess to a future year or request a refund (refunds take time in practice — applying the excess forward is usually faster).
She does not owe NRS anything this year — the WHT her clients already deducted covered the bill entirely.
It happens. The most common errors:
If the wrong rate was deducted, the payer must file a correction with NRS. The credit note should reflect the corrected amount. This can take time to resolve — which is why it is worth catching the error quickly.
Always check the credit note against the rate table above when you receive a payment.
Lucrive's Tax Calculator lets you enter your gross income from each WHT category — dividends, rent, consultancy, construction, and so on — and it applies the correct rate to show your total WHT credit for the year. That figure feeds directly into your overall tax liability estimate, so you can see at a glance whether your WHT credits will cover your CIT or PIT bill before you file.
For context on how WHT fits into your full tax picture — alongside VAT, CIT or PIT, and PAYE — see the complete guide: Withholding Tax in Nigeria: A Complete Guide for Business Owners.
Bookmark this rate table. When a client sends you a short payment with a WHT deduction, you can check the category, verify the rate, and make sure the credit note matches — all in under a minute.
Ready to see how your WHT credits reduce your actual tax bill? Try Lucrive's Tax Calculator — enter your income by category and it applies the correct WHT rate for each one automatically.
Sources & further reading