Understanding PAYE in Ghana 🇬🇭 : How It Affects Your Monthly Salary
Emmanuel Amegah
July 28, 2025
When your payslip arrives at the end of the month, chances are the number you see isn’t the full story. That’s because of PAYE — Pay As You Earn — a taxation system that directly affects your take-home pay.
Whether you’re an employee wondering why your salary looks smaller than expected or an employer trying to stay compliant, understanding PAYE in Ghana is essential. Let’s break it down.
What Is PAYE?
PAYE (Pay As You Earn) is Ghana’s system for collecting income tax from employees. Instead of paying taxes at the end of the year, your employer deducts the tax every month before you even see your salary. It’s based on a progressive tax system — meaning, the more you earn, the higher your tax rate.
These deductions are then paid directly to the Ghana Revenue Authority (GRA).
How PAYE Is Calculated in Ghana
PAYE is calculated using Ghana’s income tax brackets, which are updated periodically by the GRA. As of July 2025, here’s the current structure:
| Monthly Income Range (GHS) | Tax Rate |
|---|---|
| 0 – 490 | 0% |
| 491 – 660 | 5% |
| 661 – 3,750 | 10% |
| 3,751 – 20,000 | 17.5% |
| 20,001 – 60,000 | 25% |
| 60,001 – 600,000 | 30% |
| Over 600,000 | 35% |
⚠️ These rates may change — always consult the latest GRA publications or your payroll provider.
PAYE is calculated after allowable reliefs, such as:
- SSNIT (Social Security contributions)
- Personal reliefs (e.g., for marriage, children, disability)
What PAYE Means for Employees
For employees, PAYE ensures your tax obligations are handled upfront — no need to file annual returns unless you have other sources of income.
Update: As of the Income Tax (Amendment) Act, 2024, all employees in Ghana are now required to file annual income tax returns, even if they are exclusively under PAYE. The deadline for filing returns is April 30 each year.
But it also means your gross salary (the amount you’re offered) is not what lands in your bank account. PAYE, SSNIT, and possibly Tier 2 deductions reduce your net salary — your real take-home pay.
Understanding how PAYE works empowers you to:
- Double-check your payslip
- Plan your monthly budget accurately
- Advocate for fair compensation during job offers
What PAYE Means for Employers
If you employ full-time staff in Ghana, you are legally required to:
- Calculate PAYE correctly
- Deduct it from employee salaries
- Remit it to the GRA by the 15th of each following month
Late payments or underreporting can result in stiff penalties, interest charges, and legal exposure. That’s why many employers are now using automated payroll tax tools to stay compliant — and error-free.
Minimum Wage and SSNIT Update (2025)
- Minimum daily wage (March 2025): GHS19.97
- Maximum insurable earnings for SSNIT: GHS61,000
Why Manual PAYE Calculation Is Risky
Spreadsheets can’t keep up with:
- Frequent GRA updates ❌
- Tiered relief structures ❌
- Multi-employee calculations with varied income levels ❌
That’s why many Ghanaian companies are adopting payroll tax software like Cadana's Payroll Tax Engine that handles PAYE automatically, keeps up with law changes, and generates audit-ready reports.
Summary
PAYE in Ghana isn’t just a line on your payslip, it’s the framework that determines how much of your salary you actually keep. Whether you're an employee planning your finances or an employer handling payroll, getting it right matters.
Want a smarter way to calculate and manage PAYE?
Explore how Cadana simplifies Ghanaian payroll and keeps your team compliant.
👉 Book a free demo.
Emmanuel Amegah