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The short answer
A producer working with a Nigerian label is usually paid two ways: a fee or advance for the beat and a royalty share (points) on the master, plus a share of publishing if you co-wrote. Put both in a signed producer agreement and a split sheet before release. Nigerian withholding tax on royalties under the 2024 regulations is 5% for individuals and 10% for companies, and if you are a US tax resident the full royalty is US income.
Two income streams, two sets of rights
Every song has two copyrights: the master recording, usually owned by the label, and the composition (melody, lyrics, and in Afrobeats often the beat's core musical ideas), owned by the writers and their publishers. Producers can earn from both. Mixing them up is the main reason US-based producers chase Lagos labels for years after a hit.
| Stream | Where it comes from | How you get paid |
|---|---|---|
| Producer fee or advance | The label or artist, on delivery | Invoice; often half on signing, half on delivery |
| Master royalty (points) | Streaming, sales and licensing of the recording | Label accounts to you, usually after recouping costs |
| Publishing (writer share) | Performance, mechanical and sync income for the composition | Through your PRO, publisher or administrator |
| Sync fees | Film, TV, ads, games | Shared between master and publishing owners |
The split sheet
Sign a split sheet in the session or within days of it. It lists every writer and their percentage of the composition, with names as they appear on PRO registrations, contact details and signatures. Without it, a Nigerian collecting society, a US PRO and a distributor can each hold different data, and the money waits. A producer who also contributed melody or lyrics is a writer; one who only programmed drums may not be, depending on what the parties agree.
The producer agreement
- Fee or advance: amount, currency, and whether it is recoupable from your royalties.
- Royalty rate: points as a percentage of the label's receipts or of retail, and on which income.
- Recoupment: which costs the label recovers before paying you, and whether your royalty is paid from record one after recoupment.
- Accounting: statements every six months or quarterly, audit rights, payment within a set number of days.
- Credit: exact producer credit on platforms and artwork.
- Samples and stems: who clears samples and who owns your project files.
- Currency and tax: naira or dollars, and whether payments are gross or net of Nigerian withholding tax.
Nigerian labels range from multinational-backed companies with royalty systems to artist-run outfits that pay by transfer when money arrives. Adjust your terms: a larger upfront fee and simpler royalty terms can be worth more than generous points you will never be accounted for.
Nigerian withholding tax on royalties
PwC's summary of the Deduction of Tax at Source (Withholding) Regulations 2024 lists royalties at 10% for companies and 5% for individuals, with the same rates whether the recipient is resident or not. So a royalty paid to you personally should see 5%, and one paid to your US company 10%. Your producer fee for making the beat is a service payment instead; PwC lists 10% for non-resident professional-type fees and 5% for other services. Ask the label which line it uses and get the withholding tax receipt each time.
| Worked example (illustrative) | Paid to you personally | Paid to your US company |
|---|---|---|
| Royalty statement total | $4,000 | $4,000 |
| Nigerian WHT on royalties | 5% = $200 | 10% = $400 |
| Received before bank charges | $3,800 | $3,600 |
US tax on what you receive
If you are a US citizen or resident for tax purposes, the IRS taxes worldwide income, so Nigerian fees and royalties are reportable in full, before the Nigerian deduction. For a working producer, fees are business income and attract self-employment tax once net earnings reach $400; how royalties are reported depends on whether they arise in your trade or business, which your preparer should decide. Nigerian tax withheld can support a foreign tax credit, within the IRS formula; there is no US-Nigeria tax treaty. See claiming Nigerian WHT as a credit.
What to check first
- A signed split sheet for every song you worked on, with legal names and PRO details.
- A producer agreement that separates the fee, the master royalty and any publishing share.
- The recoupment clause: which costs come off before your points are paid.
- Statement frequency and audit rights, so you can see what the label received.
- The currency of each payment and whether it is gross or net of Nigerian withholding tax.
- A folder for each release: agreement, statements, proof of payment and WHT receipts.
If a label will not sign a producer agreement, at least exchange emails confirming the fee, points and credit. A clear written trail is far easier to enforce, in either country, than a voice note from the session.
Performance royalties
Radio, TV, club and streaming performances of the composition in Nigeria are collected locally and passed to your US PRO through reciprocal agreements. That process, and why it takes a year or more, is in collecting Nigerian performance royalties via BMI or ASCAP. Register every work with full splits as soon as the song is out.
Where Pryme fits
A Pryme Business Account opened from the US holds naira and dollars with local account details, so a Lagos label can pay a fee in naira and a royalty in dollars without a forced conversion. You decide when to Swap; the rate and fee are shown before you approve.
Questions people ask
How much tax do Nigerian labels deduct from royalties?
PwC's summary of the 2024 withholding regulations lists 5% for individuals and 10% for companies on royalties, resident or not.
What is a split sheet?
A signed record of each writer's percentage of a song's composition, used for registrations with PROs, publishers and collecting societies.
Do producers get publishing?
Only if they are writers of the composition, which depends on what they contributed and what the writers agree. Points on the master are separate.
Do I pay US tax on Nigerian royalties?
If you are a US tax resident, yes. Report the full amount and consider a foreign tax credit for Nigerian tax withheld.
Sources
- PwC Nigeria: Highlights of the Deduction of Tax at Source (Withholding) Regulations 2024 · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- IRS Publication 54 (12/2025), Tax Guide for US Citizens and Resident Aliens Abroad · accessed Oct 2026
- IRS: Self-employment tax (Social Security and Medicare taxes), updated 27 Jun 2026 · accessed Oct 2026
- IRS: Foreign tax credit, how to figure the credit, reviewed 9 Jul 2026 · accessed Oct 2026
- IRS: United States income tax treaties A to Z, reviewed 3 Jan 2026 · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.