Here’s how much tax you pay depending on your income

GRA made the announcement on the microblogging website, Twitter, on Tuesday, January 11, 2021.

The Authority stated that workers who earn below GH¢365 monthly will not be taxed.

According to the GRA, these are the new chargeable income and the rates applicable to each:

For income below GH¢365 the worker pays zero tax (0%)

Next GH¢110 has a five percent (5%) tax applicable to it

Next GH¢130 attracts a ten percent rate (10%)

Next GH¢3000 will attract a 17.5percent

Whiles the next GH¢16,395 attracts a 25%, income exceeding GH¢ 20,000 attracts a 30% tax.

A tax expert, Francis Tilmore Boi, explained that, tax is calculated gradually on the bands listed above.

Note that the first GH¢365 on every worker’s income is non-taxable, after which tax rates are applied on the bands.

Thus if your income is, for example, GH¢1000, the first GH¢365 will be deducted and zero tax will be applied.

Tax will now be applied on the remaining GH¢635, beginning from the next GH¢110 at a 5% tax rate. The remainder of your income GH¢525 will be subjected to the next 130 at a tax rate of 10%.

Therefore, because the next 525 is not up to GH¢3000 the tax is left at the last 130 therefore tax payable on GH¢1000 is GH¢18.50p.