What reduces your take-home pay
For most employees in Ghana, two statutory deductions come out of every salary:
- SSNIT — your 5.5% pension contribution, calculated on basic salary. SSNIT explained.
- PAYE — income tax, charged in bands on your income after SSNIT. PAYE explained.
Your payslip may also show deductions that are not required by law — loan repayments, union dues, welfare, insurance or voluntary pension contributions. These are specific to you and your employer, so the calculator does not include them.
A worked example
- Basic salary
- GH₵3,000.00
- = Gross salary
- GH₵3,000.00
- − SSNIT (5.5% of basic)
- GH₵165.00
- = Taxable income
- GH₵2,835.00
- − PAYE on taxable income
- GH₵386.88
- = Estimated take-home pay
- GH₵2,448.12
PAYE detail: GH₵490.00 × 0% + GH₵110.00 × 5% + GH₵130.00 × 10% + GH₵2,105.00 × 17.5% = GH₵386.88
Notice that PAYE is not simply a percentage of your salary: the first slice of taxable income is tax-free and each further slice is taxed at a higher rate. That is why your effective tax rate is lower than your top rate.
Why take-home pay is more useful than gross salary
Rent, transport, school fees and savings all come out of take-home pay, so it is the figure to budget with and to compare job offers on. Two offers with the same gross salary can give different take-home pay if one pays more as basic salary (higher SSNIT) and the other more as allowances. See understanding salary offers.
Allowances and take-home pay
Cash allowances increase your gross pay and your PAYE, but not your SSNIT contribution, because SSNIT is based on basic salary only.
- Basic salary
- GH₵3,000.00
- + Taxable allowances
- GH₵1,000.00
- = Gross salary
- GH₵4,000.00
- − SSNIT (5.5% of basic)
- GH₵165.00
- = Taxable income
- GH₵3,835.00
- − PAYE on taxable income
- GH₵561.88
- = Estimated take-home pay
- GH₵3,273.12
PAYE detail: GH₵490.00 × 0% + GH₵110.00 × 5% + GH₵130.00 × 10% + GH₵3,105.00 × 17.5% = GH₵561.88