New Government Workers Salaries and How 30% Base Pay Increment Is Calculated
All Government Workers Salaries will shoot up by 30% effective January 2023 as a result of the 30% Base Pay Increment arrived through theBase Pay Negotiations.However, the question is, do you know how to compute this and what your take home pay will be?
In this write-up, we attempt to explain with an example how the30% Base Pay Increment Is Calculated
How to apply the 30% base pay on your existing salary without considering COLA
To calculate the new pay follow the procedure below using a sheet of paper, calculator and a pen or an excel sheet for convenience.
Step 1: (2022 Single Spine Salary (SSS)) x 30%) + 2022 Single Spine Salary (SSS) or
Step 1 option 2 =(2022 Single Spine Salary (SSS)) x 1.3 where the 1.3 is the 2022 pay plus 30% = 2023 Single Spine Salary
Step 2: Determine your retention premium thus 15% x Answer obtained in Step 1 above which is your Single Spine Salary. This should give you = 2023 retention premium
Step 3: Calculate the Gross pay = 2023 Single Spine Salary + 2023 retention premium
STEP 4: At the end of step three, consider all other deductions to be made such as your insurance policy monthly premiums, other statutory obligations to arrive at the amount that will end up being paid into your bank account.
Below is a practical explanation which comes with a calculation of the 2023 Base Pay for an employee whose 2022 Base Pay is GHS 2000.00
- If your salary for a single spine is GHS 2000.
- 30% of GHS 20006= GHS600.00
- 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 - 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. - 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
- The new salary you will enjoy under the infamous Single Spine Salary Structure. This new salary is GHS2453.60
- Your 15% of the GHS2453.60 is known as your retention premium due you. 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 GHS2821.84. 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.
READ:Mistake To Avoid When Buying Term Insurance And How To Fix Them
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.
READ:3 Reasons Why Selling Annuity Payments May Be the Best Decision You Make
We hope this write up has helped you to appreciate what your income is likely to be from January to December 2023.
Source: GhanaEducation.Org
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