Freelance tax, net of WHT already paid.
Balance still due
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Chargeable income
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Total income tax
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Net income
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Freelance tax is the gap, not the gross
If you write code, design, consult, or take on professional briefs as an independent in Nigeria, your tax position has a twist that salaried earners never deal with. Your clients often deduct withholding tax before they pay you, and that money is already sitting with the government as an advance on your income tax. So the question that matters at filing time is not how much tax you owe in total, it is how much is still due after crediting what has already been withheld. This calculator answers exactly that, and it is built for freelancers and consultants rather than payroll staff.
The flow runs in four steps. Start from your annual freelance income. Subtract the deductions you are entitled to, which the tool lets you enter as pension and rent. That gives your chargeable income, the figure the tax bands actually apply to. Run that through the progressive scale to get total income tax. Finally, subtract the withholding tax already taken at source, and what is left is your balance due.
How the progressive bands and reliefs work
Nigeria taxes chargeable income on a rising scale, so each slice of income is taxed at its own rate rather than your whole income jumping to one rate. As modelled here, the first NGN 800,000 of chargeable income is tax-free, the next slice up to NGN 3 million is taxed at 15 percent, income from NGN 3 million to NGN 12 million at 18 percent, then 21 percent, 23 percent, and a top rate of 25 percent on chargeable income above NGN 50 million. Those are the bands this calculator applies under the new regime. The reform replaced the older relief and band structure, so treat every figure as the value the tool uses and verify the current bands with the Federal Inland Revenue Service and your state internal revenue service, which is who you actually file your personal tax with.
Reliefs lower the base before the bands bite. The rent relief modelled here is 20 percent of the annual rent you pay, capped at NGN 500,000, whichever is lower. Pension contributions you make are also deductible. Enter your real rent and pension and the chargeable income drops, which is the legitimate way to pay less.
An NGN 6 million year, with rent and WHT
Take a freelancer earning NGN 6 million for the year who pays NGN 1.2 million in annual rent and has had NGN 300,000 of withholding tax deducted by clients. Rent relief is 20 percent of NGN 1.2 million, which is NGN 240,000, comfortably under the cap. That brings chargeable income to NGN 5.76 million. Running that through the bands gives total income tax of NGN 826,800. Credit the NGN 300,000 already withheld and the balance still due is NGN 526,800. These figures use the rates this calculator applies.
When withholding tax overshoots
Withholding tax on resident consultancy and professional fees is commonly 5 percent of the fee. On a high-fee, low-margin year, those 5 percent slices can add up to more than your final tax once reliefs are applied, especially if you have heavy deductible costs. In that case your balance due here shows zero, but you may be in a credit position, meaning you have overpaid. You cannot simply keep the difference by paying less next time. You either claim a refund or carry the excess forward against future liability, and both run through your state revenue service. Keep every withholding tax credit note your clients issue, because without that evidence the credit is hard to claim.
A frequent mistake is forgetting that withholding tax is not a final tax for freelancers. It is an advance. You still have a filing obligation, and you still settle the balance shown here. Treating the 5 percent deduction as the end of the matter is how people end up with arrears.
What if a client did not deduct any WHT?
Then your withheld figure is zero and the full income tax shown becomes your balance due. The obligation does not disappear because a client skipped the deduction. Set aside a portion of every invoice yourself so you are not caught short at filing, and remember that as your income climbs into higher bands, the share you should reserve rises too.
Can I deduct laptops, software, and other work costs?
This tool models the personal deductions of pension and rent relief, not your full business expenses. If you operate as a genuine trade or profession, legitimate costs incurred to earn the income are generally deductible when you compute taxable profit, which can lower the figure below what is shown here. The rules on what qualifies are specific, so confirm them with the Federal Inland Revenue Service or a tax adviser before relying on a particular deduction.