Employer of Record in Ghana

Hiring in Ghana for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Ghana in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Ghana.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Ghana’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Businesses can only operate smoothly in Ghana if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Ghana below, to avoid any compliance issues.

Employment Contract Requirements

Employers in Ghana are required to strictly follow the provisions laid out in the Labour Act and its related regulations. When creating employment contracts and carrying out hiring processes, it is essential to closely adhere to these established laws to guarantee legal conformity and foster a smooth employment relationship. Key areas to consider include the start date, job description, duties, salary, benefits, and any probationary period

Onboarding Process

We can help you get a new employee started in Ghana quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Ghana

In Ghana, the regular workweek usually comprises 40 hours, divided into 8 hours per day over a five-day workweek.

Overtime in Ghana

Any hours worked beyond the standard 40-hour workweek are compensated at a rate of 150% of the regular pay rate.

Probation Period in Ghana

The terms of probation in Ghana are typically specified in the employment contract or collective bargaining agreement.

Fiscal Year in Ghana

1 January - 31 December is the 12-month accounting period that businesses in Ghana use for financial and tax reporting purposes.

Payroll Cycle in Ghana

The payroll cycle in Ghana is usually monthly, with employees being paid the last working day of each month.

Minimum Wage in Ghana

The minimum wage for employees in Ghana is typically 1.86 GHS per hour, amounting to ~297.6 GHS per month for a typical 40 hour work week.

Bonus Payments in Ghana

There are no provisions in the law regarding 13th salaries.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 13% on top of the employee salary in Ghana.

Employee Payroll Tax Contributions

In Ghana , the typical estimation for employee payroll contributions cost is around 5.5%.

Individual Income Tax Contributions

Income tax in Ghana is 'Pay As You Earn'. The individual income tax ranges from 0% to 30%. Income tax is calculated according to progressive rates.

Pension in Ghana

Ghana's pension system comprises two main tiers: the Social Security and National Insurance Trust (SSNIT) for formal sector employees and the National Pensions Scheme (Tier 2) for both formal and informal sector workers. SSNIT, funded by contributions from employers and employees, offers retirement, survivor's, invalidity, and emigration benefits. In Tier 2, contributions are managed by private pension fund managers, supplementing SSNIT benefits.

Mandatory Leave Entitlement in Ghana

The annual leave entitlement in Ghana is 15 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Ghana

In Ghana, Employees are entitled to 13 public holidays.

Paid Time Off in Ghana

In Ghana, After one year of employment for a full-time employee, the annual paid leave entitlement is 15 working days.

Maternity Leave In Ghana

Expectant employees are eligible for 12 weeks of paid maternity leave at 100% of their regular pay rate, which extends to 14 weeks in the event of multiple or complicated births.

Paternity Leave In Ghana

Sick Leave In Ghana

The Labour Act in Ghana does not explicitly address sick leave; typically, it is governed by the company's policies. Nonetheless, employees holding a medical certificate can take leave without utilizing their accrued paid time off.

Parental Leave In Ghana

Ghana's labor laws do not include a distinct "parental leave" policy.

Adoption Leave

A person who adopts a child under the age of 10 is entitled to paid leave based on the employees average salary

Childcare Leave

A mother or father can take paid leave (equal to the minimum wage), which varies based on the age of the child:

Termination Process in Ghana

The termination process varies according to the employment agreement or collective bargaining agreement and is based on the type of contract and reason for termination.

Notice Period in Ghana

The minimum notice period is 14 days and will be increased according to the length of the employment.

Severance in Ghana

In Ghana, there are no mandated regulations for severance payments. Throughout the notice period, the employee will continue to receive regular salary wages. Negotiations between the employee and employer are required in the event of redundancy.