Withholding tax (WHT) is tax deducted at source before you even receive payment — on your salary, bank profit, contracts, or property transactions. It isn't a separate tax; it's an advance collection of your income tax, adjustable against your final liability when you file your return.
Where WHT Gets Deducted
- Salary — deducted monthly by your employer
- Bank profit / savings — deducted by the bank before crediting interest
- Contracts and services — deducted by the paying company from vendor/contractor invoices
- Property transactions — deducted at purchase and sale
- Vehicle registration — collected as advance tax at the time of registration
Filer vs Non-Filer Rates
Across almost every WHT category, non-filers pay a noticeably higher rate than filers — sometimes double. This is the single biggest financial reason to register your NTN and file annually, even if your income is modest.
Claiming WHT Back
WHT deducted throughout the year is not lost — it's credited against your total tax liability when you file your annual return. If your total WHT deducted exceeds your actual tax liability, the excess is refundable. Keeping your salary certificate, bank statements, and any WHT certificates from paying parties makes this reconciliation straightforward.