The 10% withholding tax on bank and investment interest.
Net interest kept
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Withholding tax (10%)
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Gross interest
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How Nigeria taxes the interest you earn
When your money sits in a savings account, a fixed deposit, a treasury bill or a money-market fund and pays you interest, that interest is income, and Nigeria taxes it through withholding. The bank or fund deducts the tax before the money reaches you and remits it to the Federal Inland Revenue Service. You never handle the tax yourself, which is why many savers do not even notice it. This calculator shows the deduction and, more usefully, the net interest you actually keep.
The rate this calculator applies is 10 percent, the withholding rate on dividends and interest as modelled here. The crucial feature is that for individuals this withholding tax is generally the final tax on passive interest. Final tax means it is settled at source and the interest is not then added to your other income and taxed again on the progressive scale. You can treat the net figure as genuinely yours. Because rates and the precise treatment of passive income are among the things the 2025 reform touches, confirm the current 10 percent figure and its finality with the Federal Inland Revenue Service before relying on it.
The single deduction, step by step
There is one input and one operation. The tool multiplies the gross interest you enter by 10 percent to get the withholding tax, then subtracts that from the gross to leave your net interest. No bands, no reliefs, no thresholds enter into it, which is exactly why passive interest is simple compared with employment income that runs through the full personal income tax machinery.
NGN 500,000 of interest in a year
Say a fixed deposit and some treasury bills together pay you NGN 500,000 of interest over the year. At the 10 percent rate this calculator applies, the split is straightforward.
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The bank credits you NGN 450,000 and sends NGN 50,000 to the FIRS on your behalf. Because the tax is final, there is nothing further to pay at year end on that interest. The chart shows the ten to ninety split visually.
Where the simple rule bends
Two edges are worth knowing. First, the finality applies to individuals on passive interest. A company earning interest sits in a different position, because the interest can form part of its taxable profits and the withholding becomes a credit against its companies income tax rather than a final charge. Second, certain interest may be exempt or treated differently, for instance interest on some government securities has historically enjoyed concessions. If your interest comes from an instrument that claims an exemption, do not assume the flat 10 percent applies, and check the current status with the FIRS.
This tool is for individual savers and investors who want to see the real yield on their deposits after tax. A practical tip: when a bank advertises a fixed deposit rate, mentally knock 10 percent off the interest to get what lands in your account. A headline 20 percent deposit effectively pays you closer to 18 percent net once the withholding bites, and that net rate is the one to compare against inflation.
Do I have to declare interest if tax was already withheld?
For an individual whose only tax on the interest is the final 10 percent withholding, the tax obligation on that interest is satisfied, so it does not get taxed again. You may still need to mention it for completeness if you file a return, but you are not assessed twice. Keep the deduction notes or statements your bank issues as evidence the tax was withheld, in case your state internal revenue service ever queries it.
Is interest taxed at the same rate as dividends?
Yes. The withholding rate this calculator applies to interest, 10 percent, is the same rate that applies to dividend income, and in both cases it is generally the final tax for an individual recipient. That symmetry is why a dividend tool and this interest tool share the same percentage. Rates can be changed by finance legislation, so verify the figure for the current year with the Federal Inland Revenue Service.