JusticeSure
    Withholding Tax
    NRS / Federal Tax
    2024 WHT Regulations

    Withholding Tax (WHT) Rates & Remittance Guide for Nigerian Businesses (2026)

    Seen 5% or 10% "WHT" deducted from your invoice and wondered where it went? This guide covers the WHT rates by payment type under the Deduction of Tax at Source (Withholding) Regulations 2024, who must deduct and remit, the 21st-of-the-month deadline, how to claim your WHT credit notes against CIT or PIT, and the exemptions that protect small suppliers and manufacturers.

    WHT Rates by Payment Type (2024 Regulations)

    WHT is deducted by the payer at the point of payment, on the amount exclusive of VAT. The rate depends on the nature of the transaction and whether the recipient is a company or an individual/unincorporated business:

    Payment TypeCorporate RecipientIndividual Recipient
    Professional / consultancy / technical / management services5%5%
    Rent & hire of assets (incl. equipment leasing)10%10%
    Dividends & interest10%10%
    Royalties10%5%
    Construction — roads, bridges, buildings, power plants2%5%
    Commissions & brokerage5%5%
    Directors' fees—15%
    Supply of goods (non-manufacturer)2%2%

    Source: Deduction of Tax at Source (Withholding) Regulations 2024 (effective 1 January 2025); Companies Income Tax Act & Personal Income Tax Act as consolidated under the Nigeria Tax Act 2025. Treaty-country non-residents may enjoy reduced rates. A supplier with no valid TIN suffers deduction at double the standard rate.

    Key WHT Facts at a Glance

    🧾
    What WHT Is
    An advance payment of income tax, deducted at source by the payer
    📅
    Remittance Deadline
    21st of the month after deduction (NRS via TaxPro-Max)
    💼
    Services Rate
    5% on professional, consultancy, technical & management fees
    🏢
    Rent / Dividends / Interest
    10% deducted at source
    🏗️
    Construction
    2% for corporates on roads, bridges, buildings & power plants
    💳
    Credit Notes
    Offset WHT suffered against your CIT or PIT bill
    🛡️
    Small Supplier Relief
    ≤ ₦2M/month transactions with small companies (valid TIN) exempt
    ⚠️
    No TIN Penalty
    Suppliers without a TIN suffer double the standard rate

    How to Deduct, Remit and Claim WHT: Step by Step

    1

    Identify whether the payment is caught by WHT

    Check the transaction type against the 2024 Regulations schedule — services, rent, dividends, interest, royalties, construction, commissions, and non-manufacturer goods supplies are in; manufacturer sales of own goods, across-the-counter sales, and ≤ ₦2M/month payments to small companies with a valid TIN are out.

    2

    Apply the correct rate to the VAT-exclusive amount

    Compute WHT on the invoice value excluding VAT, using the corporate or individual rate for the recipient category. If the supplier has no valid TIN, the 2024 Regulations require deduction at double the standard rate.

    3

    Pay the supplier net and book the liability

    Pay the supplier the invoice amount minus WHT, and record the deduction as a liability to the tax authority. Keep the supplier's name, TIN, address, transaction description, gross amount, and tax deducted for the remittance schedule.

    4

    Remit by the 21st of the following month

    Remit corporate-supplier WHT to NRS via TaxPro-Max, and individual-supplier WHT to the relevant state IRS, with the full deduction schedule. WHT deducted in March must be remitted by 21 April.

    5

    Issue / obtain credit notes

    Remittance generates the evidence for WHT credit notes. As a payer, make sure your schedule carries each supplier's correct TIN. As a supplier, chase your customers for credit notes — the deduction is only usable once remitted and filed against your TIN.

    6

    Offset WHT suffered against your annual tax

    When filing your annual CIT self-assessment (or PIT return), claim total WHT credit notes as a credit against tax payable. Excess credit carries forward to future years (or is refundable in principle).

    Subject to WHT or Exempt? Common Situations

    Payment / SituationWHT?Why
    Consultancy or professional feesDeduct 5%Core WHT transaction — services attract 5% for both corporate and individual suppliers
    Office or equipment rentDeduct 10%Rent and hire of assets attract 10% at source
    Manufacturer selling its own productsExemptGoods manufactured or materials produced by the supplier are outside the WHT net under the 2024 Regulations
    Across-the-counter retail purchaseExemptSales in the ordinary course of business are not subject to WHT
    ≤ ₦2M/month payment to a small company with a TINExempt2024 Regulations relieve small suppliers with valid TINs on low-value transactions
    Dividend paid to a shareholderDeduct 10%Dividends attract 10% WHT, which is a final tax for individuals
    Supplier with no valid TINDeduct at 2× rateThe 2024 Regulations double the standard rate where the recipient has no TIN
    Bank interest & fees paid by direct debit to a Nigerian bankExemptExpressly exempted, alongside telephone charges, internet data and airline tickets

    Frequently Asked Questions

    Answers for Nigerian businesses deducting WHT — and suppliers who suffer it

    The Deduction of Tax at Source (Withholding) Regulations 2024 introduced meaningful exemptions: (1) compensating payments under a registered securities lending transaction; (2) goods manufactured or materials produced by the person making the supply — a manufacturer selling its own products is generally not subject to WHT on the sale; (3) imported goods where the transaction does not create a taxable presence in Nigeria; (4) any payment where the transaction value is ₦2 million or less in a month AND the supplier is a small company with a valid TIN; (5) interest and fees paid to Nigerian banks by way of direct debit of funds domiciled with the bank; (6) telephone charges, internet data, and airline tickets; (7) out-of-pocket reimbursements that are properly separated from service fees. Also note across-the-counter sales in the ordinary course of business ('sales in the ordinary course of business') are outside the WHT net. Small suppliers should ensure their TIN appears on every invoice — a missing TIN attracts deduction at double the standard rate under the 2024 Regulations.

    Failure to deduct, or deducting and failing to remit, makes the payer liable for: (1) the unremitted tax itself — the authority recovers the principal from the payer, not the supplier; (2) an administrative penalty — historically 10% per annum of the tax not withheld/remitted for companies under CITA (and up to 200% in older FIRS practice for agents of collection), with the current framework applying ₦25,000 for the first month of default and ₦5,000 for each subsequent month for late filing of returns, plus (3) interest at the prevailing Central Bank of Nigeria Monetary Policy Rate. Persistent default can also block your own Tax Clearance Certificate (TCC) and trigger a tax audit covering all your other taxes. Because the exposure sits with the payer, treat WHT compliance as part of your accounts-payable process: no qualifying invoice should be paid without the deduction being computed, booked, and scheduled for the 21st-of-the-month remittance run.

    Stop losing WHT credits you already paid for

    JusticeSure tracks the WHT deducted from your invoices, chases the credit notes, and lines them up against your CIT filing — so every naira withheld at source comes back as a tax credit, not a write-off.

    Related guides: Company Income Tax (CIT) · NRS VAT Guide · PAYE for Employers · Bookkeeping for Nigerian SMEs
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    What is Withholding Tax (WHT) in Nigeria?

    Withholding Tax (WHT) is not a separate tax — it is an advance collection mechanism for income tax. When a Nigerian business pays for certain services or transactions (consultancy, rent, dividends, interest, construction, commissions), the payer must deduct a percentage at source and remit it to the tax authority on the supplier's behalf. The supplier then uses the WHT credit note as a credit against its final Company Income Tax (CIT) or Personal Income Tax (PIT) bill. WHT deducted from companies goes to the Nigerian Revenue Service (NRS, formerly FIRS); WHT deducted from individuals and unincorporated businesses goes to the relevant state Internal Revenue Service. The legal basis is the Companies Income Tax Act and Personal Income Tax Act as consolidated under the Nigeria Tax Act 2025, together with the Deduction of Tax at Source (Withholding) Regulations 2024, which took effect from 1 January 2025.

    What are the current WHT rates in Nigeria?

    Under the Deduction of Tax at Source (Withholding) Regulations 2024 (effective 1 January 2025), the common rates are: professional, consultancy, technical and management services — 5% for companies and individuals (2.5%/5% in some categories under the new regulations); rent and hire of assets — 10%; dividends, interest and royalties — 10% (royalties to individuals 5%); construction of roads, bridges, buildings and power plants — 2% for corporates (other construction-related activities 5%); commissions and brokerage — 5% (10% for individuals in some cases); directors' fees — 15% for individuals; supply of goods and materials by a manufacturer or producer — exempt in many cases under the 2024 Regulations, otherwise 2%. Non-resident recipients from treaty countries may enjoy reduced treaty rates (commonly 7.5% on dividends, interest and royalties). Always check the 2024 Regulations schedule for the exact rate for your transaction type and recipient category, because the new regime differentiates between corporate and non-corporate recipients.

    Who is required to deduct and remit WHT?

    The obligation falls on the payer, not the supplier. All companies (including small companies for payments to taxable persons), government ministries, departments and agencies, statutory bodies, and — for certain transactions — individuals and unincorporated entities operating a business must deduct WHT when making qualifying payments. Under the 2024 Regulations, small companies (turnover ≤ ₦25 million) are exempted from the obligation to deduct WHT on payments where the supplier has a valid Tax Identification Number (TIN) and the transaction is ₦2 million or less in a month. If you fail to deduct, or deduct and fail to remit, YOU (the payer) become personally liable for the tax plus administrative penalties and interest — the tax authority does not chase your supplier for it.

    When must WHT be remitted, and how?

    WHT deducted must be remitted to the relevant tax authority by the 21st day of the month following the month of deduction. So WHT deducted on payments made in March must reach NRS (for corporate suppliers) or the state IRS (for individuals) by 21 April. Remittance is done electronically via the NRS TaxPro-Max portal (or the relevant state platform), accompanied by a schedule listing each supplier's name, TIN, address, nature of transaction, gross amount, and tax deducted. On remittance, the system generates evidence used to issue WHT credit notes to the suppliers. Late remittance attracts an administrative penalty (₦25,000 for the first month and ₦5,000 for each subsequent month under the current framework, alongside interest at the prevailing CBN rate) and, more importantly, exposure for the unremitted principal.

    What is a WHT credit note and how do I use it?

    A WHT credit note (or WHT receipt) is the official evidence that tax was deducted from your invoice and remitted to the tax authority in your name. It states the payer, your company's name and TIN, the transaction, and the amount of tax withheld. You use it to offset your final income tax: when filing your annual CIT self-assessment (or PIT return for individuals), you claim the total WHT suffered during the year as a credit against the tax payable, attaching the credit notes as proof. If WHT suffered exceeds the tax due, the excess can be carried forward against future tax or refunded (refunds are possible in principle but slow in practice, so most businesses carry the credit forward). Practical tip: actively chase your customers for credit notes — under TaxPro-Max the credits are increasingly visible electronically against your TIN, but the deduction only becomes usable to you once the payer actually remits and files the schedule with your correct TIN.

    How is WHT different from VAT, and can both apply to one invoice?

    Yes — WHT and VAT routinely apply to the same invoice, and they must never be mixed up. VAT (7.5%) is a consumption tax the supplier adds ON TOP of the invoice value and collects from the customer; WHT is income tax deducted FROM the supplier's own money. Example: a consultant invoices ₦1,000,000 + 7.5% VAT = ₦1,075,000. The paying company deducts 5% WHT on the ₦1,000,000 service value (not on the VAT-inclusive amount) = ₦50,000, and pays the consultant ₦1,025,000. It then remits ₦50,000 WHT to the tax authority (and, if it is appointed to self-account for VAT, the ₦75,000 VAT as well). WHT is always computed on the amount exclusive of VAT. The consultant claims the ₦50,000 as a credit against its income tax — it has not lost the money, it has prepaid tax.

    Which transactions and suppliers are exempt from WHT?

    The Deduction of Tax at Source (Withholding) Regulations 2024 introduced meaningful exemptions: (1) compensating payments under a registered securities lending transaction; (2) goods manufactured or materials produced by the person making the supply — a manufacturer selling its own products is generally not subject to WHT on the sale; (3) imported goods where the transaction does not create a taxable presence in Nigeria; (4) any payment where the transaction value is ₦2 million or less in a month AND the supplier is a small company with a valid TIN; (5) interest and fees paid to Nigerian banks by way of direct debit of funds domiciled with the bank; (6) telephone charges, internet data, and airline tickets; (7) out-of-pocket reimbursements that are properly separated from service fees. Also note across-the-counter sales in the ordinary course of business ('sales in the ordinary course of business') are outside the WHT net. Small suppliers should ensure their TIN appears on every invoice — a missing TIN attracts deduction at double the standard rate under the 2024 Regulations.

    What are the penalties for failing to deduct or remit WHT?

    Failure to deduct, or deducting and failing to remit, makes the payer liable for: (1) the unremitted tax itself — the authority recovers the principal from the payer, not the supplier; (2) an administrative penalty — historically 10% per annum of the tax not withheld/remitted for companies under CITA (and up to 200% in older FIRS practice for agents of collection), with the current framework applying ₦25,000 for the first month of default and ₦5,000 for each subsequent month for late filing of returns, plus (3) interest at the prevailing Central Bank of Nigeria Monetary Policy Rate. Persistent default can also block your own Tax Clearance Certificate (TCC) and trigger a tax audit covering all your other taxes. Because the exposure sits with the payer, treat WHT compliance as part of your accounts-payable process: no qualifying invoice should be paid without the deduction being computed, booked, and scheduled for the 21st-of-the-month remittance run.