The Employee’s Tax Shield: Tax-Free Benefits to Boost Your Income

Nobody enjoys paying taxes, but they help governments function efficiently like building roads, hospitals, and schools. The good news? Not everything you earn is taxed. Ghana‘s tax laws allow some benefits to be tax-free, meaning you keep more money in your pocket. Let’s break it down

What is Taxable Employment Income?

This is the money you earn from your job, including salary, bonuses, and allowances. Normally, you pay tax on this income, but some benefits are tax-free and that’s what we’re diving into today.

Tax-Free Benefits You Should Know About

1. Pension Funds – Your Retirement Money is Safe

If you receive a pension (money saved for retirement), you don’t have to pay tax on it. That means retirees get their full pension without any deductions.

2. Personal Injury Compensation – No Tax on Settlement Money

If you receive money for an injury or accident, it’s not taxable. This ensures that accident victims get the full amount of their compensation.

3. Cost of Living Allowance – Extra Cash for Expenses

Some employers give employees extra money to help with daily living costs. This allowance is tax-free, making life a little easier.

Tax-Free Work-Related Benefits

4. Business Expense Reimbursement – No Tax on Money You Spend for Work

If your company reimburses you (pays you back) for work-related expenses, you don’t pay tax on it. For example, if you buy office supplies for work and get refunded, it’s tax-free.

5. Health & Medical Benefits – Free Healthcare from Your Boss

If your company provides medical, dental, or health insurance, you won’t be taxed on it, as long as the benefit is available to all full-time employees. This encourages companies to take care of their workers.

6. Travel Allowance for Foreign Employees

If you’re hired from another country or your job requires you to work in Ghana temporarily, your employer can pay for your travel. This is tax-free, but only for your first trip when starting or leaving the job.

7. Free Accommodation at Work Sites – Tax-Free Housing for Remote Workers

If you work in mining, farming, construction, or oil industries, and your employer provides free housing near the worksite, you don’t pay tax on it! But it must meet health and safety standards.

Extra Perks That Are Tax-Free

8. Small Workplace Perks – Free Food & Gym Time

Some companies give small benefits like free meals, gym access, or wellness programs. As long as all employees get them equally, they are tax-free!

9. Redundancy Pay – No Tax on Job Loss Compensation

If you lose your job because of company downsizing or restructuring, the payout you receive is not taxable. This helps employees during tough times.

10. Tax-Free Small Loans from Your Employer

If your boss lends you money without interest, you won’t pay tax on it, as long as:

• You repay it within 12 months
• The loan doesn’t exceed three months of your salary

If you take longer to repay or borrow more than allowed, the taxman comes knocking.

 Knowing what’s tax-free can help you keep more of your earnings and make better financial decisions. Whether it’s medical benefits, travel allowances, or small workplace perks, Ghana’s tax laws allow you to enjoy some extra cash without tax deductions.

Next time you receive a work benefit, check if it’s on this list – you might just save some money.

Last Updated on February 10, 2025 by samboad