Withholding Tax Calculator
Withholding Tax (WHT) is that little cut the government takes before you even get paid, like an automatic tiny tax collection. If you pay people for services, you are the one responsible for the deduction, not them. This calculator makes sure you cut the right amount every time. No more guessing.
Withholding Tax (WHT) Calculator
Nigeria 2025 • Quick Calculations
How to Use the Nigeria Withholding Tax Calculator
Calculating tax in Nigeria often feels like a guessing game that leads to underpayments or penalties. If you get the Withholding Tax (WHT) rate wrong, you risk losing money or facing issues with the FIRS (Federal Inland Revenue Service). This calculator simplifies the process by applying the correct 2025 rates to your payments instantly. You can stop worrying about manual math and start paying your vendors or landlords with total confidence.
What is this tool?
The Nigeria Withholding Tax Calculator is a web-based utility that determines how much tax you must deduct from a payment before sending the balance to a recipient.
- Inputs: Gross payment amount, type of transaction (rent, dividend, etc.), and the recipient category.
- Outputs: Total WHT deduction, the net amount payable to the recipient, and the specific rate applied.
Key Features
- Pre-set 2025 Rates: Includes 5% and 10% options for common Nigerian transactions.
- Recipient Logic: Switches between individual and company categories.
- Custom Rate Input: Allows for specific rates not covered by standard buttons.
- Instant Results: Shows a breakdown of gross, tax, and net totals on one screen.
Prerequisites
- The total (gross) invoice amount.
- Knowledge of whether the recipient is an individual or a registered company.
- The nature of the service provided (e.g., a contract for supplies vs. a professional fee).
Step-by-Step Guide
1. Select the Payment Type
Click the icon that matches your transaction. For example, choose Rent for office space or Professional Fee for a consultant. You will see the button turn blue to confirm your selection.
Common Error: Choosing “Contract” (5%) for a legal fee which should be “Professional Fee” (5% or 10% depending on the recipient). Always check the service type first.
2. Enter the Gross Amount
Type the total amount of the invoice into the Gross Amount (₦) box. Do not include commas; the tool handles formatting for you.
Common Error: Entering the amount you want to pay after tax. This box must be the total amount before any deductions.
3. Choose the Recipient Type
Pick Individual, Company, or Non-Resident from the dropdown menu. This is vital because companies and individuals sometimes have different tax obligations.
4. Click Calculate WHT
Hit the green Calculate WHT button. The screen will automatically scroll down to show a results dashboard.
5. Review the Results
Check the Net Amount Payable to see what you actually owe the vendor. The WHT to Remit box tells you exactly how much you must pay to the tax authorities.
Who Needs This Tool?
| User Group | Problem | Benefit | Tip |
| Small Business Owners | Unsure if they should deduct 5% or 10% for a new vendor. | Prevents under-deduction penalties from the FIRS. | Always ask for a vendor’s tax ID before making the first payment. |
| Freelancers | Getting paid less than the invoice amount and not knowing why. | Helps verify if a client deducted the correct amount. | Keep the WHT credit notes for your annual tax returns. |
| Landlords/Tenants | Confusion over who pays the tax on a shop or office lease. | Clearly defines the net rent and the tax portion. | WHT on rent is a final tax for individuals; ensure you get your receipt. |
| Accountants | Manually calculating tax for dozens of monthly invoices. | Speeds up payroll and vendor payment cycles. | Double-check the “Contract” rate as it frequently changes with new tax laws. |
Common Mistakes to Avoid
- Mixing up Gross and Net: If you enter the net amount (what you want the person to receive), the tax deduction will be too low. Always start with the total invoice value.
- Wrong Recipient Category: Selecting “Individual” for a limited liability company (LTD) can lead to the wrong rate. Check the business name for “Ltd” or “Plc.”
- Ignoring the “Custom Rate” Option: If a tax officer gives you a specific directive for a unique transaction, use the custom rate box instead of forcing a pre-set button.