In Ghana, the Social Security and National Insurance Trust (SSNIT) contributions are part of the country’s pension scheme. SSNIT contributions in Ghana are calculated based on the gross salary, not the net salary.
Table of Contents
What is Gross Salary
Gross salary refers to the total amount of money an employee earns before any deductions such as taxes, Social Security and National Insurance Trust (SSNIT) contributions, pension, insurance, or other withholdings.
Gross Salary:
- This is the total salary before any deductions such as taxes, SSNIT, or other contributions.
So, when calculating SSNIT contributions, you apply the percentages (5.5% for the employee and 13% for the employer) to the gross basic salary.
Gross Salary Includes:
- Basic salary: The fixed amount paid for work done.
- Allowances: Any additional payments like housing, transportation, and medical allowances.
- Bonuses: Any extra payments based on performance or other criteria.
Example:
If an employee’s contract specifies a monthly salary of GHS 3,000, this is their gross salary. After deductions (e.g., taxes, SSNIT), the amount they take home (net salary) will be lower.
So, gross salary is the total earnings, while net salary is what the employee receives after all deductions.
What is Net Salary
Net salary (or take-home pay) is the amount of money an employee receives after all deductions have been subtracted from the gross salary. These deductions can include:
- Income tax (PAYE): Pay As You Earn tax
- SSNIT contributions: Employee’s portion (5.5% in Ghana)
- Other deductions: Such as pension contributions, loans, insurance, union dues, etc.
Net Salary Formula
Net Salary = Gross Salary − Deductions
Example:
If an employee’s gross salary is GHS 3,000, and the deductions (taxes, SSNIT, etc.) amount to GHS 700, the net salary will be:
Net Salary= 3,000 − 700 = GHS 2,300
This GHS 2,300 is what the employee will take home at the end of the month.
How to Calculate SSNIT Contributions
The contributions are made by both the employee and the employer. Here’s how to calculate SSNIT contributions:
Breakdown of Contributions:
- Employee Contribution: 5.5% of the employee’s basic salary.
- Employer Contribution: 13% of the employee’s basic salary.
The total contribution amounts to 18.5% of the employee’s basic salary.
Steps to Calculate SSNIT Contributions
1. Determine the employee’s basic salary: For example, if the employee’s basic monthly salary is GHS 2,000.
2. Employee’s SSNIT contribution:
Employee’s SSNIT Contribution = 5.5% × Basic Salary
= 0.055 × 2,000 = GHS 110
3. Employer’s SSNIT contribution:
Employer’s SSNIT Contribution= 13 % × Basic Salary
= 0.13 × 2,000 = GHS 260
4. Total SSNIT Contribution:
Total Contribution = Employee’s Contribution + Employer’s Contribution
= GHS 110 + GHS 260 = GHS 370
Summary
For an employee earning a basic salary of GHS 2,000, the total SSNIT contribution would be GHS 370, where GHS 110 is deducted from the employee’s salary, and GHS 260 is contributed by the employer.
Know More About SSNIT
Login here and get your SSNIT Portal ID
Register to merge your SSNIT and NIA numbers
SSNIT pension benefits for contributors
How to know if your SSNIT contributions have been paid
How to access and check your SSNIT contribution statement
