Ghana SSNIT Contribution Calculations

As per the changes in the DT0107a report, there was a requirement on pension to carry the excess contributions calculated on Tier 1 and Tier 2, to Tier 3.
Enhancements have been made to cater for this. Please refer to the sections below for more information. This is applicable to the Ghana SSNIT Contribution Calculations.

Enhancements to Ghana SSNIT Contribution Calculations

The following enhancements have been made to the Ghana SSNIT contribution calculations:

1. The monthly limit of 35 000.00 will be applied to the SSNIT Tier 2 contributions (tax codes SSNITT2EE and SSNITT2ER). Previously the maximum limit was only applied to the SSNIT Tier 1 contributions (tax codes SSNITT1EE and SSNITT1ER) and the excess on SSNIT Tier 2 contributions was automatically allocated to SSNIT Tier 2.
2.   All employee contributions to Tier 1, Tier 2, and Tier 3 will be taken into account when calculating the allowable deduction (up to the limit). Customers have the choice to include the Tier 3 company contributions (tax code 9999) as well, as allowable deductions. In order to do so, they need to override tax code 9999 to tax code PROV. All Tier 3 contributions processed against tax code PROV will be taken into account when calculating the allowable deduction for Tier 3, up to a maximum of 16.5% of Basic Salary. This amount will display as a note component: SSNIT Tier 3 Allowable (tax code PROVALL).
3. A combined allowable limit of 18.5% of the Basic Salary has been implemented for the SSNIT Tier 1 and Tier 2 employee contributions (tax codes SSNITT1EE, SSNITT2EE, SSNITEE, SSNITT1EEA, and SSNITT2EEA). This amount will display as a note component: SSNIT Tier 1 and 2 Allowable (tax code SSNITALL).
4. If the Basic Salary (tax code SALARY) is greater than the cap of 35 000.00 per month, customers can allocate the SSNIT Tier 1 and Tier 2 excess by selecting one of the relevant excess options from the SSNIT Excess dropdown list on the Basic Profile screen (this can be done via Bulk Actions):

• If Tier 1 excess to Tier 2 is selected, the excess contributions of SSNIT Tier 1 will be remitted to SSNIT Tier 2.
• If Tier 1 excess to Tier 3 is selected, the excess contributions of SSNIT Tier 1 will be remitted to SSNIT Tier 3.
• If Tier 2 excess to Tier 2 is selected, the excess contributions of SSNIT Tier 2 will be remitted to SSNIT Tier 2.
• If Tier 2 excess to Tier 3 is selected, the excess contributions of SSNIT Tier 2 will be remitted to SSNIT Tier 3.
• If Tier 1 and Tier 2 excess to Tier 2 is selected, the excess contributions of SSNIT Tier 1 and Tier 2 will be remitted to SSNIT Tier 2.
• If Tier 1 and Tier 2 excess to Tier 3 is selected, the excess contributions of SSNIT Tier 1 and Tier 2 will be remitted to SSNIT Tier 3.
• If Tier 1 to Tier 2 and Tier 2 to Tier 3 is selected, the excess contributions of SSNIT Tier 1 will be remitted to Tier 2, and the excess contributions of SSNIT Tier 2 will be remitted to Tier 3.
• If Tier 1 to Tier 3 and Tier 2 to Tier 2 is selected, the excess contributions of SSNIT Tier 1 will be remitted to Tier 3, and the excess contributions of SSNIT Tier 2 will be remitted to Tier 2.
• If No excess is selected, no excess will be carried over for SSNIT Tier 1 and Tier 2. These contributions will be capped at the maximum pensionable salary of 35 000.00.
• If no option is selected, no excess will be carried over for SSNIT Tier 1 and Tier 2. These contributions will be capped at the maximum of pensionable salary of 35 000.00.

Impact of Ghana SSNIT Contribution Calculations on PaySpace

1. All Ghana payrolls will be recalculated.
2. The following default options will be applied for minimal disruption:

• For all Ghana employees without the SSNIT Excess Income Indicator note component, the default SSNIT Excess option will be Tier 2 excess to Tier 2. As before, the excess of SSNIT Tier 2 will be remitted to SSNIT Tier 2.
• For all Ghana employees with the SSNIT Excess Income Indicator note component, the default SSNIT Excess option will be Tier 1 and Tier 2  excess to Tier 2. As before,the excess of SSNIT Tier 1, as well as the excess of Tier 2, will be allocated to SSNIT Tier 2.

3. It will be the customer’s responsibility to validate all SSNIT calculations and to change the default option if necessary. This can be done via Bulk Actions.
4. Customers who are manually calculating the excess remitted to Tier 3, can now select the relevant option on the employee’s Basic Profile. This can be done via Bulk Actions. Take note that SSNIT Tier 1 and Tier 2 excess can only be remitted to SSNIT Tier 3 if tax code PROV already exists on the payslip. If not, an error message will display: “To remit excess to Tier 3, please advise Tier 3 contributions”.
5. Excess remitted to Tier 3 will always display on the Excess to Tier 3 Employee (tax code PROV) andExcess to Tier 3 Employer (tax code 9999) components.
6. The following note components will be inactive from 1 November 2022: SSNIT Excess Income Indicator, Tier 1 Excess Employee Amount and Tier 1 Excess Employer Amount.
7. Customers can access the Calculation Breakdown to view a month-to-date breakdown of remitted Tier 1 and Tier 2 excess (under Additional Information):

Should you have any questions regarding the Ghana SSNIT Contribution Calculations, please feel free to visit our Support page for more ways to get in touch, or email us at [email protected].

The PaySpace Team