Taxes in Ghana Article 03 - ACP
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It is a tax collected from an employee's pay and paid by the employer on the employee's behalf. The tax is levied on all employment income, whether it is received in cash or in kind. The employer must file monthly PAYE returns on behalf of the employee by the fifteenth day of the month following the month in which the deduction was made.
Your employer deducts PAYE at source using the monthly progressive individual tax rates.
Deductions and Allowances
These items are deducted from an employee’s income before calculating PAYE:
These are some of the allowances that will be added to the salary for PAYE purposes:
Allowances paid in cash are added to the salary. Benefits to the employees in kind are added for tax purposes, but when the benefit is paid in kind, it is quantified in monetary value before it is added.?Examples are electricity, water, the vehicle with driver and fuel, vehicle and fuel, the vehicle only, fuel only, etc.
Overtime
The overtime rate is applicable to employees who are;
A junior staff member whose qualifying employment emolument is more than Gh￠18,000 is not entitled to overtime pay.
When an employer pays an employee overtime that is less than 50% of the employee's monthly basic salary, the employer deducts 5% as overtime tax. However, if the overtime paid exceeds 50% of the employee's monthly base income, the excess is taxed at a rate of 10%. In contrast to bonuses, no overtime is added to the basic income. It should be remembered that the tax on bonuses or overtime for a non-resident employee is 20%.
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PAYE for Temporary Workers
When a resident individual work as a temporary employee, his or her tax is calculated in the same way as any other employee.
"Temporary worker" refers to a worker who is engaged for a period of not less than one month and is not a permanent worker or employed for seasonal labor. (See the Labour Act of 2003 (Act 651) for further information.)
PAYE for Casual Workers
Whenever a person pays a casual worker, 5% of the sum should be deducted as tax and sent to the Ghana Revenue Authority.
A "casual worker" is defined as a worker who works on a seasonal or intermittent basis for less than six months and whose remuneration is computed on a daily basis. (See the Labour Act of 2003 (Act 651) for further information.)
Income from Other Sources
Other forms of income, such as income from other jobs, businesses, and investments, should also be taxed. At the end of the year, the income from each source is combined in the return, submitted as one, and taxed as one.
Bonus
Total incentive payments made by employers to their employees in a fiscal year are taxed at 5% to 15% of the employee's yearly basic salary.
If the bonus payment exceeds 15%, the excess is added to the employee's employment income and taxed at the progressive tax rate.
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