Gross and after-tax dividend yield, net of the 10% WHT.
After-tax yield
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Gross yield
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Gross income
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After-tax income
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Turning a share price into a yield you can compare
Dividend yield is the income return on a share, expressed as a percentage of what you pay for it. Divide the annual dividend per share by the share price and you have the gross yield. A stock paying NGN 4 a year on a NGN 50 price yields 8 percent before tax. That single number lets you line a stock up against a savings account or a treasury bill and ask a plain question: which pays me more for parking my money here? This calculator does that arithmetic and, crucially, runs it through after tax as well, so you compare like with like.
The after-tax figure matters because dividends in Nigeria suffer withholding tax at source. The rate this calculator applies is 10 percent, the same rate that comes off bank interest, so you keep 90 percent of the dividend and the after-tax yield is 90 percent of the gross yield. Withholding rates on investment income are among the numbers the 2025 tax reform has been adjusting, so treat the 10 percent as modelled here and confirm the current rate with the Federal Inland Revenue Service before you lean on a yield comparison for a large position.
Gross yield flatters, net yield decides
Headline yields quoted in the financial pages are almost always gross. That is fine for ranking stocks against each other, since the same 10 percent comes off all of them, but it overstates what reaches your pocket. When you weigh a dividend stock against a fixed deposit or a treasury bill, use the net figures, because all three are taxed at the same 10 percent at source and the net yields are then directly comparable. A stock with a flashy gross yield can still be the better holding once you factor in the chance of capital growth, but judge the income side on the after-tax number.
10,000 shares at NGN 50, paying NGN 4 each
Take the tool's defaults. You hold 10,000 shares bought at NGN 50, each paying NGN 4 a year. The gross yield is 4 divided by 50, which the tool shows as 8.00%. Your gross income is NGN 40,000. After the 10 percent withholding, you keep NGN 36,000, and the after-tax yield on your NGN 500,000 outlay works out to 7.20%.
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Where yield can mislead you
A high yield is not automatically good news. Yield rises when the price falls, so a stock that has dropped sharply can show a tempting yield precisely because the market doubts the dividend will hold. Always ask whether the company can keep paying at that level. A useful tip is to base the calculation on the dividend you realistically expect over the next year, not last year's payout, especially for a company whose earnings are volatile. The tool happily takes whichever per-share dividend you enter, so feed it a forward estimate if that is what you are testing.
The other thing yield ignores is capital gain or loss. This calculator measures income only. Pair it with a total-return view of your holding, because two stocks on the same yield can deliver very different outcomes once price movement is counted.
Should I use the price I paid or today's price?
Both answer different questions. Use today's price to judge whether the stock is worth buying or holding now, since that is the yield a new buyer would lock in. Use your original purchase price to see the yield on your own cost, which is the income return on the money you actually committed. The calculator gives you whichever you enter, so run it twice if you want both angles.
Is the dividend taxed again when I file my annual return?
For most shareholders, no. The 10 percent withheld at source is generally the final tax on a Nigerian dividend, so it is not added to your other income and taxed a second time. That is what makes the after-tax yield here a fair number to compare against a deposit. Confirm your own position with the relevant state internal revenue service if your affairs are unusual.