Public sector workers in Ghana will begin to receive the 7 percent salary increment in January 2022 as agreed upon by the labour unions, Fair Wages and Salaries Commission (FWSC), and the Government of Ghana.<\/p>\n\n\n\n
Workers are in a state of dilemma as to how the said percentage will be calculated and how relevant it will be to them. Well, I have gathered some must-know facts about the 4 and 7 percent salary increment for 2021 and 2022 respectively.<\/p>\n\n\n\n
The current 4% salary increase was based on 2020 base pay. So, the impending 7% salary increase will be based on the 2021 base pay.<\/p>\n\n\n\n
The salary increase is never based on the net or gross salary of the employee.<\/p>\n\n\n\n
Note this:<\/p>\n\n\n\n
Base pay (under earnings) = your raw pay on the single spine salary structure<\/strong><\/p>\n\n\n\n Allowance = earning a certain percentage of your base pay or otherwise determined<\/strong><\/p>\n\n\n\n Gross Salary= an accumulation of all earnings.<\/strong><\/p>\n\n\n\n Total deductions= accumulation of all deductions.<\/strong><\/p>\n\n\n\n Net Salary= Gross salary minus Total Deductions.<\/strong><\/p>\n\n\n\n Disposable income= Gross salary minus Statutory deductions<\/strong><\/p>\n\n\n\n Assuming Mr. Black\u2019s current base pay on the single spine is 2,000.<\/p>\n\n\n\n Let us see how the impending 7% will increase 2,000<\/strong><\/p>\n\n\n\n 7% of 2,000<\/strong><\/p>\n\n\n\n 0.07 \u00d7 2,000=140<\/strong><\/p>\n\n\n\n The 7% will increase the 2,000 by 140.<\/strong><\/p>\n\n\n\n Add the 140 to the old base pay to get the new base pay.<\/strong><\/p>\n\n\n\n 2,000 + 140=2,140<\/strong><\/p>\n\n\n\n This year, his base pay will increase from 2,000 to 2,140.<\/strong><\/p>\n\n\n\n Salary Increment 2022: Amount to be Added to Salaries Calculated & Explained -Second Explanation.<\/strong><\/p>\n\n\n\n Salary increases are cumulative. That is, they pile up progressively. If you receive a certain percentage of salary increase in a particular year, the following year\u2019s increase is coming to add to what already exists.Assuming we had a pay rise of 10% in 2020 and in 2021 we are having a 4% pay rise. The 4% increase is based on the previous 10% increase last year.<\/p>\n\n\n\n The increases raise the base pay progressively. Now let\u2019s look at the 4% and 7% increases in question. Currently, we are having a 4% increase in last year\u2019s base pay. So next year, we are going to have a 7% increase on this year\u2019s base pay.<\/p>\n\n\n\n Example<\/strong><\/p>\n\n\n\n Now let\u2019s project your January gross salary using the 7% increase.<\/p>\n\n\n\n If your current base pay is 2352.64<\/p>\n\n\n\n Your base pay after the 7% increase will be<\/p>\n\n\n\n 7% of 2352.64<\/p>\n\n\n\n 0.07 \u00d72352.64= 164.68<\/p>\n\n\n\n Your new base pay will be 2352.64+164.68= 2,517.33<\/p>\n\n\n\n Your new base pay will be 2,517.33<\/p>\n\n\n\n Let\u2019s get your Retention Premium<\/p>\n\n\n\n 15% of 2,517.33<\/p>\n\n\n\n 0.15\u00d72,517.33=377.60<\/p>\n\n\n\n Your Gross will be 2,517.33+377.60 = 2894.93<\/p>\n\n\n\n Your new Gross will be Gh\u00a22,894.93<\/p>\n\n\n\n So, if there is a salary increase of say 12% in 2023, the calculation will be based on your 2022 base pay which is 2,517.33<\/p>\n\n\n\n In that case, your new base pay will become 12% of 2022 base pay<\/p>\n\n\n\n =>12% of 2,517.33<\/p>\n\n\n\n 0.12 \u00d7 2517.33 =302.08<\/p>\n\n\n\n 2517.33 + 302.08 = 2,819.41<\/p>\n\n\n\n So, the 2023 12% increase will bring the base pay up to 2,819.41.<\/p>\n\n\n\n You will realize that the increases are cumulative, as I mentioned earlier.<\/p>\n\n\n\n 2021 base pay (4% increase) = 2352.64<\/p>\n\n\n\n 2022 base pay (7% increase) = 2517.33<\/p>\n\n\n\n 2023 base pay (12% increase) = 2819.41<\/p>\n\n\n\n From the above, you could see that the base pay rises with the percentage increases.<\/p>\n\n\n\n Workers are therefore urged to note that there is nothing like subtracting the percentage of the previous base pay increase from the impending one. That calculation is incorrect.<\/p>\n\n\n\n