How to calculate PAYE in Ghana

Breakdown of the P.A.Y.E schedule 

Let us assume Kwame Amoh works with XYZ company limited and his monthly salary is GHS 1,000.00. He will contribute 5.5% as SSNIT.
 That is; 1,000 x 5.5% = GHS 55.00 

Steps to calculate

We will then subtract 55 from 1,000 to give us the base value for tax computation 

1,000 – 55 = GHS 945.00 

From the schedule, 

The first 365 is from free taxation as it is the threshold for computation. 

945 – 365 @ 0% = 580 

We will now subtract the next 110 from 580 @ 5% = 5.50 

580 – 110 = 470. 

We again subtract the next 130 from 470 @ 10% = 13.00 

470 – 130 = 340 

At this point, 340 falls within the next value on the schedule which is 3,000 @ 17.5% = 525. 

We will then multiply 340 by 17.5% = 59.5. 

NB: 

Remember that from the second to the third steps, we had the payable taxes as 5.50 and 13.00 respectively. 

Now, we will sum the taxes from step 2 to step 4. 

(5.50+13+59.5) = GHS 78.00 

At the end of the month, XYZ company limited will withhold GHS78.00 from Kwame’s Salary and pay to GRA as P.A.Y.E. 

Attached to this article is the PAYE Schedule.