What is Withholding Tax (WHT)?
Quick Answer
Withholding Tax (WHT) is an advance payment of income tax deducted at source. Companies and individuals must deduct WHT (typically 5-10%) from payments for contracts, services, rents, dividends, and royalties. WHT deducted can be claimed as credit against your final tax liability.
Registration Threshold
Any business or individual making qualifying payments to contractors, suppliers, or service providers must deduct WHT. There is no turnover threshold for WHT obligations.
Who Must Register for Withholding Tax (WHT)?
How to Register for Withholding Tax (WHT)
Identify Qualifying Payments
Determine Correct WHT Rate
Deduct WHT at Source
Issue WHT Certificate
Remit to FIRS
WHT Quick Facts
What is Withholding Tax in Nigeria?
Withholding Tax (WHT) is an advance income tax payment deducted at source by the payer. When a company pays a contractor, they deduct 5% (or 10% for rent/dividends) and remit it to FIRS. The contractor claims this as credit against their final tax liability.
What is the WHT rate in Nigeria?
WHT rates in Nigeria are: 5% for contracts, consultancy fees, and commissions; 10% for rent, dividends, interest, and royalties. Non-residents generally pay 10% on all payment types.
Withholding Tax Rates 2026
| Payment Type | Resident Rate | Non-Resident Rate |
|---|---|---|
| Contracts (general) | 5% | 10% |
| Consultancy / Professional fees | 5% | 10% |
| Technical services | 5% | 10% |
| Management fees | 5% | 10% |
| Rent (land and buildings) | 10% | 10% |
| Dividends | 10% | 10% |
| Interest | 10% | 10% |
| Royalties | 10% | 10% |
| Commission | 5% | 10% |
| Directors fees | 10% | 10% |
Resident vs Non-Resident: A resident is someone who lives in Nigeria or a Nigerian company. Non-residents typically pay 10% WHT on all payment types.
How to Claim WHT Credit
WHT deducted from your payments is not a final tax—it's an advance payment. You can claim it as credit against your final tax liability when filing your annual return.
Collect WHT Certificates
Request WHT credit certificates from all payers who deducted WHT from your payments.
File Annual Return
Include WHT credits when filing your annual tax return on FIRS TaxPro Max.
Offset or Claim Refund
WHT credits reduce your tax liability. If WHT exceeds tax owed, apply for a refund.
Can I get a WHT refund in Nigeria?
Yes, if the total WHT deducted from your income exceeds your final tax liability for the year, you can apply for a refund from FIRS. Submit your annual return with all WHT certificates and apply for refund through TaxPro Max. Refunds typically take 3-6 months to process.
WHT Calculation Examples
Freelancer Paid ₦500,000
The freelancer receives ₦475,000 and a WHT certificate for ₦25,000 to claim as tax credit.
Landlord Receiving ₦2,000,000 Rent
The landlord receives ₦1,800,000 and claims ₦200,000 WHT credit on their annual return.
How to Remit WHT to FIRS
Login to TaxPro Max
Access taxpromax.firs.gov.ng with your company credentials.
Navigate to WHT Remittance
Select "Withholding Tax" from the services menu.
Enter Payment Details
Provide payee TIN, payment amount, WHT amount, and payment category.
Make Payment
Pay via bank transfer or card. Remittance must be within 21 days of deduction.
Generate WHT Certificate
Download the WHT credit certificate and provide to the payee.
Compliance Checklist
Penalties for Non-Compliance
| Violation | Penalty | Notes |
|---|---|---|
| Failure to deduct WHT | Payer becomes liable for the tax + 10% penalty | - |
| Late remittance (after 21 days) | 10% of tax due + interest at CBN rate + 2% | - |
| Failure to issue WHT certificate | ₦25,000 per certificate not issued | - |
| Late filing of WHT returns | ₦25,000 per month of default | - |
Avoid penalties: Set up reminders for all filing deadlines. KeepAm sends automatic notifications before each due date.
Frequently Asked Questions
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