The Ghanaian government has finally increased the base pay percentage for 2023 by 30%. How will the amount that will be added to one's salary be calculated?

The calculation is unrelated to the Cost of Living Allowance (COLA). The COLA is a temporary benefit that is about to expire, especially since the base pay increment has been determined.

There are only two items that make up the total amount under a single spine structure.

These are the retention premium and the single spine salary. With these factors in mind, the 30% increase is calculated.

In Ghana, how do you calculate a 30% base pay increment?

Multiply your Single Spine Salary (SSS) by 30% and add the result to your initial SSS to calculate the Base Pay percentage. Calculate the retention of 15% of the new SSS and multiply the new SSS by 15%. To calculate your new gross pay, add the new single spine to the retention premium.

Formulas for calculating

2023 Base Pay in Ghana

1. If your salary for a single spine is GHS

2000.

2.30% of GHS 20006= GHS600.00

3. SSNIT is 5.5% of the increment done.

So 5.5% of GHS600.00=GHS33.00

600- 33=567.00

This leaves you with GHS567.00 out of the increment done

4. VAT is 20% which will be charged against the increment.

VAT = 20% of 567=113.40

567-113.40=453.60

This deduction leaves us with GHS453.60 of the 30% increment.

5. The next thing to do is to add the current balance of GHS453.60 to your already existing

SSSS pay. This gives you 2000 + 453.60 =

GHS2453.60

6. The new salary you will enjoy under the infamous Single Spine Salary Structure. This amounts to as follows. is retention premium

15% of GHS2453.60 = GHS368.04

So GHS2453.60 + 368.04= GHS2821.84

In case you want to secure a loan facility for any project from your bank, the loan facility will be based on the HS2821.84. Per law, the loans you contract must not be MORE THAN 40% of your pay in terms of monthly payment.

Hence if you decide to take a loan given that

GHS2821.84 is your take home pay, the bank will deduct a total of not more than

GHS1128.656. 

Note that all deductions covering insurance premiums, association dues among others will be deducted from this amount GHS2821.84.

Where the recipient of the amount in question has a Tier 3 SSNIT. Then an additional 16.5% which amounts will be deducted for the Tier 3.

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