How to calculate the agreed 30% Salary Increment for Public Sector Workers

WHAT IS BASE PAY?

Base Pay is the amount of money that an employee is paid before any taxes or other deductions are taken out (ie the single spine monthly salary). This can be found on your Payslip (you can better still ask your validator to check for you as validation approaches)

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Summary, salary increment = (30 / 100) multiplied by the base pay

Let's assume your base pay is Ghc 1,890

Rate of increment = 30%

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INCREMENT = (30/100) x 1,890

Note: 30% =30/100 = 0.3

Hence, INCREMENT = 0.3 X 1,890 

= Ghc 567 (Excluding tax)

Salary agreed upon

Salary (based on agreed salary = Negotiated percentage x existing gross salary

Negotiated salary = 30% x Ghc1,890

Negotiated salary = 0.3 X Ghc1,890

Negotiated salary = Ghc 567

DEDUCTIONS 

1. (SSNIT)

The first of the two deductions is the SSNIT (and it is 5.5%).

It will therefore be remained with a percentage of 94.5% (since the rate of SSNIT 5.5% deducted from the initial 100%, thus 100%-5.5%) of the agreed salary for the employee after SSNIT.

The newly agreed salary after SSNIT deductions = 567 - 5.5% of 567 which will be equal to 567-31.185 = 535.185

The Ghc 535.185 here is the amount to be received after SSNIT Deductions.

2. Income Tax 

Now let’s move on to the other deduction (thus Income tax of 17.5%).
Over here, 17.5% of the remaining negotiated amount or Salary after SSNIT deduction will be taken off to get the actual amount to be added to your salary after the 2023 Base Pay Increment.

So Calculations for the tax of 17.5% on the money after SSNIT Deduction will be 17.5% or 0.175 of Ghc 535.815 which will give us Ghc 93.77

NET SALARY INCREMENT

Now to get the net salary increment on the negotiated percentage, you will have to take away Ghc 93.77 from the Ghc 535.815.

The salary increment will therefore be Ghc 535.815 - Ghc 93.77 which is equal to Ghc 442.05

In view of this, any employee who has a gross salary or base pay of Ghc1,890 will have Ghc442.05 added to his/her Salary (take home)

This means that, if your base pay is Ghc 1,890.00, an amount of Ghc 442.05  will be added to your salary for 2023.

Trial Question;

If the rate of the base pay increment is 30% and base pay, Ghc 2,000.00, calculate the amount the employee will be given.

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