When managing payroll across multiple jurisdictions, statutory details can have a significant impact on compliance and employee satisfaction.
Recently, a Praxima client requested clarification on the application of age-based personal tax relief in Ghana. They wanted to know when relief becomes applicable for PAYE purposes.
The client wanted to confirm:
Given the payroll implications, accurate interpretation was essential.
We reviewed Section 51 of the Income Tax Act, 2015, which provides that personal reliefs specified in the Fifth Schedule must be deducted when determining the chargeable income of a resident individual.
Paragraph 1(c) of the Fifth Schedule further clarifies that an individual who is sixty years of age and above is entitled to personal relief.
The relief applies only after the individual turns 60. For payroll (PAYE) purposes, it is applied in the month in which the employee reaches 60, not retrospectively from the start of the tax year.
This distinction ensures accurate tax withholding and avoids both under- and over-deductions.
If this article raised questions or highlighted areas you’d like to understand better, let’s talk.Our team can walk through the details, implications, and practical considerations for your business.
