Tax Guide for Nigerian Freelancers | TaxHQ

Freelancer Taxes in Nigeria

Whether you're a developer, designer, writer, or consultant - if you earn money independently, you need to handle your own taxes.

Do Freelancers Pay Tax?

Yes. The Nigeria Tax Act applies to all income earned in Nigeria, including:

Local client payments
Foreign client payments (for work done in Nigeria)
Platform earnings (Upwork, Fiverr, etc.)

Registering as a Freelancer

Step 1: Get a TIN

Step 2: Decide Your Structure

Individual: Simpler, taxed at PIT rates (0-25%)
Sole Proprietorship: Register with CAC, still PIT rates
Limited Company: Register with CAC, taxed at CIT rates (0-30%)

For most freelancers earning under ₦25M/year, staying as an individual is simpler.

What Income is Taxable?

Taxable:

All client payments (local and foreign)
Retainer fees
Royalties and licensing fees
Ad revenue (YouTube, etc.)

Not Taxable:

Gifts (genuinely, not disguised income)
Reimbursed expenses (if you have receipts)

Deductible Business Expenses

These reduce your taxable income:

Fully Deductible

Internet and phone bills (business portion)
Software subscriptions (Figma, GitHub, etc.)
Hardware (laptops, monitors) - depreciated over time
Co-working space fees
Professional development courses
Business insurance

Partially Deductible

Home office (percentage of rent/utilities for dedicated space)
Vehicle expenses (business use percentage)
Meals with clients (50% typically)

How Much Tax Will I Pay?

Use our Freelancer Tax Calculator for an estimate.

Example: Freelancer earning ₦6,000,000/year with ₦1,000,000 in expenses:

Gross Income: ₦6,000,000
Less Expenses: ₦1,000,000
Less CRA: ₦1,220,000
Taxable: ₦3,780,000
Tax Due: ~₦480,000 (8% effective rate)

Filing Requirements

Quarterly

Not mandatory, but smart to set aside 10-15% of income for taxes
Helps avoid a large year-end bill

Annually (by March 31)

File your tax return
Pay any outstanding tax
Keep records for 6 years

Withholding Tax (WHT)

If your clients are companies, they may deduct 5-10% WHT from your payment. This is:

An advance payment of your tax
Should come with a WHT certificate
Credited against your annual tax liability

Important: Always collect WHT certificates - they're your proof of tax paid.

Pro Tips

Open a separate business account - Makes tracking income easier

Save receipts digitally - Use apps like Expensify

Set aside 15% of every payment for taxes

Invoice properly - Include your TIN on invoices

Consider voluntary pension - Tax-deductible and builds retirement savings