WHT on directors' fees, resident or non-resident.
Withholding tax
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Rate applied
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Net fee
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Why the company, not the director, does the maths
When a board approves a fee for sitting directors, the company does not simply transfer the full amount. It is obliged to deduct withholding tax at source, remit that tax to the revenue authority on the director's behalf, and pay the director the balance. This calculator works out that deduction so a company secretary or finance officer can see, before the payment run, exactly how much to hold back and how much lands in the director's account. The same logic answers the director's own question, which is what the fee is worth net.
The rate depends on one thing: whether the director is resident in Nigeria for tax purposes. As modelled here, a resident director's fee is withheld at 15 percent and a non-resident director's fee at 20 percent. These are the figures the calculator applies, and because withholding rates are among the numbers the 2025 reform has been adjusting, confirm the current rate with the Federal Inland Revenue Service before you finalise a remittance.
Resident against non-resident, side by side
The five point gap between the two rates is not trivial on a meaningful fee. A foreign director appointed to a Nigerian subsidiary's board is the typical non-resident case, and the higher 20 percent reflects that the revenue service is collecting on income that might otherwise leave its reach. A director who lives and is taxed in Nigeria falls under the 15 percent rate. If a director's residency status is genuinely unclear, for instance someone splitting the year across countries, resolve it before you pay rather than after, because correcting an under-deduction later means chasing the director for the shortfall.
A resident director paid NGN 2,000,000
Take the tool's default. The board awards a resident director a fee of NGN 2,000,000. At the 15 percent rate this calculator applies, the company withholds NGN 300,000, remits it, and pays the director NGN 1,700,000 net. Had the same director been non-resident, the 20 percent rate would lift the withholding to NGN 400,000 and cut the net to NGN 1,600,000.
| Step | Resident (15%) | Non-resident (20%) |
|---|---|---|
| Gross fee | NGN 2,000,000 | NGN 2,000,000 |
| Withholding tax | NGN 300,000 | NGN 400,000 |
| Net paid to director | NGN 1,700,000 | NGN 1,600,000 |
Getting the remittance right
Two practical points trip companies up. First, fees and salary are different. If a director is also an executive on payroll, the employment salary runs through PAYE under the normal rules, while the separate directors' fee for board service is what this withholding tax attaches to. Do not put both through the same calculation. Second, the deduction is the company's responsibility to remit on time. A late or missing remittance is the payer's problem, not the director's, and exposes the company to interest and penalties, so build the WHT into the same payment cycle as the fee itself.
A useful judgement call: agree with the director up front whether the fee quoted is gross or net. If a board says "we will pay you NGN 2,000,000" and means net, the company has to gross up so that after the 15 percent deduction the director still receives the full NGN 2,000,000, which costs the company more than NGN 2,000,000. Clarifying this in the appointment letter avoids an awkward conversation later.
Can a resident director reclaim the withholding tax?
Withholding tax on directors' fees is generally a final tax for the director, so there is usually nothing to reclaim and the fee is not taxed again in their hands. Treatment can vary with individual circumstances, so a director with complex affairs should confirm their own position with the relevant state internal revenue service.
Does the company get a credit for the WHT it remits?
No. The company is the collection agent here, not the taxpayer. It deducts the tax from the director's fee and pays it over to the revenue authority. The fee itself, gross, is a deductible business expense for the company in the normal way, but the WHT remitted belongs to the director.