It is a tax deducted from employees’ income and is paid by an employer on behalf of the employee. The tax is charged on all income of an individual in employment, whether it is received in cash or in kind. A monthly PAYE return must be filed by the employer on behalf of employees on or before the fifteenth day of the month following the month in which the deduction was made.
The monthly PAYE is deducted at source by your employer using the monthly graduated individual tax rate. These items are deducted from employees’ income before calculating PAYE.
These items are deducted from employees’ income before calculating PAYE:
These are some of the allowances that will be added to salary for PAYE purposes such as; Transport allowance, Rent (Accommodation) allowance.
Overtime rate is applicable to employees who are junior staff and their qualifying employment income including profits and gains to be taxed in the year is not more than Gh¢18,000. A junior staff whose qualifying employment emolument is more than Gh¢18,000 is not entitled to overtime pay.
When an employer pays overtime to any employee that is not more than 50% of the employees monthly basic salary, the employer will deduct 5% as overtime tax. However, if the overtime paid is more than 50% of the employee’s monthly basic salary, the excess of the 50% is taxed @ 10%. Unlike bonus no overtime is added to basic salary. It should be noted that for non- resident employees’ tax on bonus or overtime is 20%
When a resident individual is a temporary worker, his or her tax is calculated as any other employee.
When a person makes payment to a casual worker, there should be a deduction of 5% tax on the amount and pay to Ghana Revenue Authority.
Such as income from Employment, Business and Investment. At the end of the year income from each source is put together as one and taxed.
You have to file a return at the end of the year.
Year 2020 |
Chargeable Income GH¢ |
Rate % |
Tax Payable GH¢ |
Cumulative Income GH¢ |
Cumulative Tax GH¢ |
---|---|---|---|---|---|
First |
319 |
0 |
0 |
319 |
0 |
Next |
100 |
5 |
5 |
419 |
5 |
Next |
120 |
10 |
12 |
539 |
17 |
Next |
3 000.00 |
17.5 |
525 |
3 539.00 |
542 |
Next |
16 461.00 |
25 |
4 115.25 |
20 000.00 |
4 657.25 |
Exceeding |
20 000.00 |
30 |
|
|
|
The chargeable income of non-resident individuals is generally taxed at a flat rate of 25%.
Year 2020 |
Chargeable Income GH¢ |
Rate % |
Tax Payable GH¢ |
Cumulative Income GH¢ |
Cumulative Tax GH¢ |
---|---|---|---|---|---|
First |
3,828 |
0 |
0 |
3,828 |
0 |
Next |
1,200 |
5 |
60 |
5,028 |
60 |
Next |
1,440 |
10 |
144 |
6,468 |
204 |
Next |
36,000 |
17.5 |
6,300 |
42,468 |
6,504 |
Next |
197,532 |
25 |
49,383 |
240,000 |
55,887 |
Exceeding |
240,000 |
30 |
|
|
|
These rates took effect from January 1st, 2020.
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