The Government of Ghana has finally increased the base pay percentage for 2023 by 30 percent. How will one be able to calculate the amount that will be added to his/her salary?
In this article, EducandGhana.Net we walk you through the procedures used d calculating the new base pay percentage of 30%.
The calculation done has nothing to do with the Cost of Living Allowance (COLA). The COLA is a temporal allowance and is just ending especially when the base pay increment has been determined.
Under a single spine structure, there are just two items that make up the total amount. The retention premium and the single spine salary are those. The 30% increase is calculated with these components in mind.
How to calculate 30% Base Pay Increment in Ghana
To calculate the Base Pay percentage, Multiply Your Single Spine Salary (SSS) by 30% and add the results to the initial SSS. Find the retention of 15% of the new SSS and multiply the new SSS obtained by the 15%. Add the new single spine to the retention premium to get your new gross pay.
Formulas for calculating 2023 Base Pay in Ghana
If your salary for a single spine is GHS 2091.26,
30% of 2091.26= 627.39
SSNIT is 5.5% of the increment done.
So 5.5% of 627.39=34.51
627.39- 34.51=592.88
So Remaining 592.88 out of the increment done
VAT is now 20% of the remaining increment done.
So 20% of 592.88=118.58
592.88-118.58=474.30
So remaining ghc474.30
Now you add the ghc474.30 to your single spine salary
2091.26 + 474.30 = GHS2565.56
GHS2565.56 will now be your new single-spine salary.
15% of the 2565.56 is retention premium
15% of 2565.56 = 384.83
So 2565.56 + 384.83 = 2950.39
It is from this GHS2950.39 that loans, dues, insurance policies, and any other subscribed policies will be deducted. If an individual has Tier 3 running, then 16.5% of the GHS627.39, which is GHS103.52 will be taken out before the SSNIT and tax are taken, hence the payment tax will be lesser.
-CREDIT: EducandGhana.net
