If you're a freelancer in Nigeria, there's a good chance you're paying more tax than you legally need to. Not because you're doing something wrong, but because you simply don't know about all the deductions available to you.

Under the Nigeria Tax Act 2025, freelancers and self-employed individuals can claim several legitimate business expenses that reduce their taxable income. The problem? Most people don't know they exist.

In this guide, we'll walk through the 5 most commonly missed deductions and show you exactly how to claim them.

Why Freelancers Overpay Tax

Unlike salaried employees who have their taxes calculated and deducted automatically, freelancers are responsible for their own tax calculations. This means:

• You need to track all your income yourself
• You need to know what qualifies as a business expense
• You need to keep proper records and receipts
• You need to file correctly and on time

Most freelancers get the income part right but completely miss the deductions part. Let's fix that.

1. Home Office Expenses

Do you work from home? Whether it's a dedicated room or a corner of your living room, you can claim a portion of your housing costs as a business expense.

What you can claim:

• A percentage of your rent (based on the space your office occupies)
• Electricity costs (proportional to business use)
• Generator fuel (proportional to business use)
• Maintenance and repairs to your workspace

How to calculate: Measure your home office space and divide by your total home size. If your office is 10 square meters in a 100 square meter apartment, you can claim 10% of your rent and utilities as business expenses.

Example: If you pay ₦1.2 million annually in rent and your office takes up 15% of your apartment, you can deduct ₦180,000 from your taxable income.

2. Internet & Phone Bills

As a freelancer, your internet connection and phone are essential business tools. Yet many people forget to claim these costs.

What you can claim:

• Monthly internet subscription
• Mobile data costs
• Phone bills (for business calls)
• VPN subscriptions

Important: If you use your phone and internet for both personal and business purposes, you can only claim the business portion. A common split is 70% business, 30% personal, but be prepared to justify this if questioned.

Example: If you spend ₦15,000 monthly on internet and ₦10,000 on phone bills, claiming 70% gives you an annual deduction of ₦210,000.

3. Equipment & Software

That laptop you use for work? The software subscriptions? All deductible.

What you can claim:

• Computers, laptops, and tablets
• Monitors, keyboards, mice
• Chairs and desks (office furniture)
• Software subscriptions (Adobe, Microsoft 365, design tools)
• Cloud storage (Google Drive, Dropbox)
• Project management tools (Notion, Asana, Trello)

Depreciation: For expensive equipment, you may need to spread the deduction over several years through depreciation rather than claiming it all at once. Consult with a tax professional for items above ₦500,000.

4. Professional Development

Investing in your skills? The government wants to encourage that—so they let you deduct these costs.

What you can claim:

• Online courses related to your work
• Professional certifications
• Industry conferences and seminars
• Books and learning materials
• Professional association memberships

Example: That ₦50,000 Coursera course on advanced JavaScript? Deductible. The ₦200,000 Google certification? Also deductible.

5. Pension Contributions

This is the big one that many freelancers miss entirely. Under the Pension Reform Act, self-employed individuals can contribute to a Retirement Savings Account (RSA) and deduct those contributions from their taxable income.

The benefit: You can contribute up to 20% of your annual income to pension and deduct it all from your taxable income.

Double benefit: Not only do you save on taxes now, but you're also building a retirement fund. The money grows tax-free until you withdraw it in retirement.

Example: If you earn ₦5 million annually and contribute 20% (₦1 million) to pension, your taxable income drops to ₦4 million. At the 18% tax bracket, that's ₦180,000 saved in taxes, plus you now have ₦1 million growing for your retirement.

How to Claim These Deductions

Knowing about deductions is one thing. Claiming them properly is another. Here's what you need to do:

1. Keep all receipts: Every purchase, every subscription, every payment. Digital copies are fine—use a folder on your phone or cloud storage.
2. Track business vs personal use: For shared expenses like internet and phone, document how you calculated the business percentage.
3. Use accounting software: Tools like KeepAm make it easy to categorize expenses and calculate deductions automatically.
4. File on time: The annual filing deadline is March 31st. Don't wait until the last minute.

The Bottom Line

Nigerian freelancers often pay thousands—sometimes hundreds of thousands—more in taxes than they need to. By understanding and claiming these five deductions, you can significantly reduce your tax bill while staying fully compliant with FIRS requirements.

Don't leave money on the table. Start tracking your expenses today, and when tax time comes, you'll be glad you did.

Next steps:

• Create a free KeepAm account to start tracking expenses
• Use our tax calculator to see your potential savings
• Read our complete tax guide for more tips