Ghana's tax rules changed on September 1, 2026, and unlike most tax news, this round is mostly good for small businesses and their employees.
The Income Tax (Amendment) Act 2026 (Act 1178) was assented on August 26, 2026. It does three things that matter to you: it lifts the amount employees earn before income tax starts, it places full-time minimum wage earners outside the tax net, and it raises the turnover ceiling for the simplified 3% presumptive tax from GHS 500,000 to GHS 750,000.
Here is each change in plain terms, and what to do before your next payday.
1. The new PAYE bands
The monthly tax-free threshold has increased by 20%, from GHS 490 to GHS 588. The bands above it shifted too. The monthly schedule effective September 1, 2026:
First GHS 588: 0%
Next GHS 80 (588 to 668): 5%
Next GHS 100 (668 to 768): 10%
Next GHS 2,900 (768 to 3,668): 17.5%
Next GHS 16,000 (3,668 to 19,668): 25%
Next GHS 30,332 (19,668 to 50,000): 30%
Above GHS 50,000: 35%
The top rate has not changed. What changed is where each band starts, and the result is that most employees take home a little more each month.
For example, on a GHS 3,000 monthly salary, PAYE falls from about GHS 416 under the old bands to about GHS 405 under the new ones. On GHS 5,000, it falls from about GHS 848 to about GHS 755.
What this means for you as an employer:
Every payslip from September onward must use the new bands.
If your payroll still runs the old schedule, you are over-deducting. Employees are owed the difference.
Communicate the change. A short note with the September payslip (new tax bands, slightly higher take-home) prevents confusion.
For a complete walkthrough of PAYE, SSNIT and Tier 2, see our guide: Ghana Payroll in 2026: PAYE, SSNIT and Tier 2 Explained
2. Minimum wage earners leave the tax net
The new GHS 588 monthly threshold aligns with the 2026 National Daily Minimum Wage of GHS 21.77 a day. In practice, a full-time worker on the minimum wage now earns right at the tax-free line.
If you employ people at or near the minimum wage, their PAYE from September should be zero or close to it. Check their payslips. (Small print: tax is computed on chargeable income, so overtime or allowances can still tip a low earner over the line.)
3. The presumptive tax ceiling rose to GHS 750,000
This is the big one if you are self-employed.
Ghana's Modified Taxation Scheme (MTS) lets qualifying small businesses pay income tax as a flat 3% of annual turnover instead of computing taxable profit and filing full accounts. Under Act 1178, the turnover ceiling rose from GHS 500,000 to GHS 750,000.
Who qualifies now:
You are an individual, sole proprietor, trader or artisan (not an incorporated company).
Your annual turnover is above GHS 20,000.
Your annual turnover does not exceed GHS 750,000.
A concrete example. A spare parts dealer with GHS 600,000 in annual sales was above the old GHS 500,000 ceiling and could not use the scheme. Under Act 1178 she now qualifies: her income tax for the year is 3% of GHS 600,000, which is GHS 18,000, settled simply, with no detailed profit computation required.
Two more things worth knowing:
The new GHS 750,000 ceiling now matches the VAT registration threshold for goods suppliers, so the two regimes line up.
If your clients withhold tax from payments to you, keep the withholding certificates. Tax already withheld is credited against what you owe, and the certificates are your proof.
What you should do before the next payday
Step 1: Update your payroll to the new PAYE bands, or confirm your payroll system already has.
Step 2: Check minimum wage earners' payslips: their PAYE should be zero or near it.
Step 3: If you are self-employed with turnover between GHS 20,000 and GHS 750,000, check whether the Modified Taxation Scheme now works in your favour.
Step 4: Keep basic records either way. Under the scheme, you need to be able to show your turnover.
Staying current without becoming a tax lawyer
Tax bands in Ghana now move with nearly every budget cycle, and a manual payroll quietly goes out of date. This is where UPOS earns its keep: its statutory rates are updated as the law changes, so new bands like Act 1178's flow into your payroll automatically. You do not need to watch GRA circulars or edit formulas; you run payroll and the correct rates are in place.
UPOS also generates payslips that reflect the current law and tracks your PAYE filing deadline, the 15th of every month. If you would rather compliance keep up with the law than chase it, start here: UPOS
The takeaway
Act 1178 is a rare tax story worth celebrating: employees take home more, minimum wage earners leave the tax net, and a quarter of a million more cedis of turnover now fits inside the simplified 3% regime. Update your bands, check your payslips, and if you are self-employed, recheck your eligibility.
Bands and thresholds in this guide reflect the Income Tax (Amendment) Act 2026 (Act 1178), effective September 1, 2026. Confirm your specific position with GRA before acting; this article is general information, not tax advice.