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Tax & Compliance

PAYE in Ghana Explained: Rates, Bands and How Employers Calculate It

2 July 20266 min read

If you employ staff in Ghana, PAYE is one of the taxes you cannot get wrong. Pay As You Earn is the income tax you deduct from your employees' salaries every month and remit to the Ghana Revenue Authority (GRA) on their behalf. Get it right and payday is quiet. Get it wrong and you risk under-deducting from your team, over-deducting from their take-home pay, or facing penalties from the GRA.

This guide walks through what PAYE is, the current tax bands, a full worked example, the filing deadlines you need to meet, and the mistakes we see employers make most often.

What is PAYE?

PAYE stands for Pay As You Earn. It is not a separate tax on your business. It is personal income tax on employment income, collected at source. Because employees rarely file their own returns, the law makes the employer responsible for calculating each person's tax, deducting it from their pay, and sending it to the GRA.

Every registered employer in Ghana is required to operate PAYE, regardless of size. That includes SMEs, schools, NGOs and growing organisations. If you pay salaries, you are a PAYE agent for the GRA.

The 2026 PAYE tax bands

Ghana uses a graduated (progressive) system. Income is taxed in slices, and each slice is taxed at its own rate. The rates below are the current resident individual bands. We show them per year, then the monthly equivalent that matters for payroll.

Annual chargeable income (GHS) Monthly equivalent (GHS) Tax rate
First 5,880 First 490 0%
Next 1,320 Next 110 5%
Next 1,560 Next 130 10%
Next 38,000 Next 3,166.67 17.5%
Next 192,000 Next 16,000 25%
Next 366,240 Next 30,520 30%
Exceeding 605,000 Exceeding 50,416.67 35%

Two things people often miss:

  • The first band is tax-free. The first GHS 490 of monthly chargeable income is taxed at 0%. Nobody pays 17.5% on their whole salary.
  • Only the slice inside a band is taxed at that band's rate. Moving into a higher band never reduces an employee's take-home pay, because only the amount above the threshold is taxed at the higher rate.

Non-resident employees (broadly, those in Ghana for fewer than 183 days in a year) are taxed differently, at a flat 25% on Ghana-sourced employment income.

SSNIT comes out first

Before you apply the PAYE bands, you deduct the employee's SSNIT contribution. An employee contributes 5.5% of their basic salary to social security, and that amount is taken off before tax. So PAYE is calculated on chargeable income, which is basic salary plus taxable allowances, minus the SSNIT deduction and any tax reliefs the employee qualifies for.

In short: salary and allowances, less SSNIT and reliefs, equals chargeable income. Apply the bands to chargeable income to get PAYE.

A worked example

Take an employee on a basic salary of GHS 3,000 a month, with no extra allowances.

Step 1: Deduct SSNIT. 5.5% of GHS 3,000 is GHS 165. Chargeable income is GHS 3,000 minus GHS 165, which is GHS 2,835.

Step 2: Apply the monthly bands to GHS 2,835.

Band Amount taxed Rate Tax
First 490 490 0% 0.00
Next 110 110 5% 5.50
Next 130 130 10% 13.00
Next 3,166.67 2,105 17.5% 368.38
Total PAYE 386.88

Step 3: Work out take-home pay. Gross GHS 3,000, less SSNIT GHS 165, less PAYE GHS 386.88, gives a net pay of GHS 2,448.12.

That is the full calculation for one employee, for one month. Now imagine doing it for 45 people, with different salaries, allowances, overtime, bonuses and reliefs, every single month, without an arithmetic slip. That is where most of the risk lives.

When and how to file

PAYE is a monthly obligation. You must:

  1. Deduct the correct tax from each employee's pay during the month.
  2. File the PAYE return and remit the total deducted to the GRA by the 15th day of the following month. So March deductions are due by 15 April.
  3. Report annually as part of your employer returns, reconciling what was deducted across the year.

Late filing and late payment both attract penalties and interest, and they accumulate. A missed month is not something that quietly goes away.

The mistakes we see most often

  • Applying one flat rate to the whole salary. The bands are graduated. Taxing an entire salary at 17.5% or 25% over-charges your staff.
  • Calculating PAYE before deducting SSNIT. SSNIT comes off first. Skipping this over-taxes employees every month.
  • Forgetting taxable allowances. Many cash allowances are taxable and must be added to chargeable income. Leaving them out under-deducts and creates a liability.
  • Missing the 15th. The deadline is firm. Diarised or automated reminders matter.
  • Not keeping records. If the GRA queries a filing, you need payslips and computations on hand. Reconstructing them after the fact is painful.

Making PAYE effortless

None of this is conceptually hard. The difficulty is doing it accurately, on time, every month, as your headcount grows and the rules change from one budget to the next.

That is exactly what our payroll and HR service takes off your plate. We process salaries, apply the correct PAYE and SSNIT deductions, generate payslips, and handle monthly filings and remittances to the GRA, so your team is paid accurately and on time, every time. If your questions are more about tax strategy or staying compliant across several obligations, our business consulting and advisory team can help you plan ahead rather than react.

PAYE should be the least stressful part of running payroll. With the right system and support, it can be.

Ready to take payroll off your desk? Book a free consultation and we will show you how Teletrust keeps your payroll accurate and GRA-compliant, month after month.

This article is general information, not tax advice. PAYE bands and thresholds are reviewed periodically by the Government of Ghana. Figures here reflect the rates current in 2026. Confirm the latest position with the GRA or your advisor before relying on them.

Sources

PAYE GhanaPAYE calculationGRApayrollincome tax Ghana