Ghana: Three-Tier Pension Scheme and Contributions Calculator

The National Pension Scheme was instituted by the National Pensions Act, Act 766 which ensures that every Ghanaian worker receives retirement benefits as and when due.

The Act 766 mandated the establishment of a new contributory Three-Tier Pension Scheme with the National Pensions Regulatory Authority (NPRA) to oversee the efficient administration of the composite pension scheme.

Pursuant to Section 3 of the National Pensions Act, 2008 (Act 766), a mandatory pensions contribution to be remitted on behalf of an employee shall be 18.5%. Despite the capping of the contributions to be remitted to the Tier 1 on a maximum gross salary that may be determined periodically by the Trust in consultation with the Board of the Authority, the total 18.5% mandatory contributions must be obtained by a 13% and 5.5% of the basic salary from the employer and the employee respectively in accordance with Section 3.

Due to multiple interpretations of this law, PaySpace provides the flexibility to configure the calculations of the 'excess' contributions in line with the preferred interpretation of this law. This simplified calculator was designed to simulate the flexibility in calculating the social contributions on the payslip depending on the options selected by the user.

These options include:

• Related Articles

• Ghana Product User Guide

  To aid our users in the understanding and application of compliance in Ghana, PaySpace has released an external Product User Guide. This is a "How to guide" to follow during country implementations, company maintenance, and for support queries.

• Ghana Payroll Tax Guide 2024

  The Ghana Payroll Tax Guide is an easy-to-understand summary of statutory contributions associated with payroll for the 2024 tax year.

• Payroll Funds Setup | Pension and Provident Fund Setup

  About A variety of Pension and Provident Funds are available to choose from on the Pension and Provident Setup Screen. You can select and configure the relevant funds according to the company’s requirements. The Pension or Provident Fund needs to be ...

• How do I set up Pension Fund components?

  This feature is available on all PaySpace editions Once a Pension fund has been created, the corresponding employee deduction and company contribution components have to be set up on company level before linking the components to employees. Step 1: ...

• How is the deductible pension/provident amount for tax calculation purposes calculated?

  The Deductible portion of the Pension/Retirement Annuity is calculated according to the below conditions as specified by SARS: What is the impact of Section 11k on me as a taxpayer. The contributions towards a pension or provident fund us deductible ...