Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
Employer of record in Ghana encompasses various aspects of employment, including payroll cycle, employer and employee contributions, minimum wage, hiring processes for employees, contractors, and expats, background checks, employment contracts, onboarding procedures, employee benefits, social security, healthcare and insurance, leave policies, public holidays, work permits and visas, probation periods, notice periods, termination and severance protocols, as well as personal income tax regulations.
| Overview | |
| Continent | Africas |
| Country | Ghana |
| Capital | Accra |
| Time zone | UTC±00:00 |
| Total Time zones | 1 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | Within four months after the end of a person's basis period. |
| Financial Year | 1st January to 31st December |
| Date format | dd/mm/yyyy |
| Currency | Ghanaian Cedi (GHS) |
| VAT | the standard rate is 12.5% |
Employer Payroll Contributions in Ghana
| Employers | % of Gross Salary |
| Social Security and Pension | 13% |
| Total Employment Cost | 13% |
Employee Payroll Contributions in Ghana
| Employees | % of Gross Salary |
| Social Security and Pension | 5.5% |
| Total Employee Cost | 5.5% |
Minimum Wages in Ghana
| Minimum Wage | |
| Minimum Wage | The minimum wage in Ghana is 12.53 GHC per day. |
Payroll Cycle in Ghana
| Payroll | |
| Payroll Cycle | Monthly |
| 13th Salary | Not required by law. |
Personal Income Tax in Ghana
| Income Tax | |
| Up to 3282 GHS | 0% |
| 3828 - 5028 GHS | 5% |
| 5028 GHS - 6468 GHS | 10% |
| 6468 - 42268 GHS | 17.5% |
| 42268 - 240000 GHS | 25% |
| 240000 GHS and over | 30% |
Employee vs Independent Contractor in Ghana
What distinguishes an independent contractor from an employee in Ghana? There are several primary factors that set them apart:
- Application of the Labour Act: While the Labour Act applies to employees, it does not extend to independent contractors. Their relationship with the employer is solely based on a contractual agreement.
- Nature of the relationship: An employer-employee relationship resembles a master-servant dynamic, whereas an independent contractor operates as a service provider under a contractor-client relationship.
- Payment structure: Employees typically receive regular monthly, weekly, or daily payments, whereas independent contractors' payment structures may vary based on the terms of their contract, including the possibility of a lump-sum payment.
- Benefits and entitlements: Employees are entitled to benefits provided by the Labour Act, whereas independent contractors solely rely on the remuneration outlined in their contracts and do not receive the same benefits.
- Oversight and control: Unlike employees, independent contractors have more autonomy and are not under the complete control or integration within the employer's company.
- Termination and redundancy: Independent contractors are not subject to redundancy procedures, and employers are not obligated to provide redundancy pay upon contract termination.
- Vicarious liability: Unless explicitly agreed upon in the contract, the employer is not vicariously liable for the actions or conduct of the independent contractor.
Terms of Employment in Ghana
Terms of employment in Ghana encompass a range of crucial aspects including working hours, overtime pay, vacation and holidays, sick leave and sick pay, leave of absence, and various legal provisions that define and protect the rights and entitlements of employees in the country.
Working Hours:
The standard working hours set by the Labour Act in Ghana are a maximum of eight hours per day or 40 hours per week. Different forms of work may allow for adjustments, but the average number of hours over a four-week period or a year should still be eight hours per day or 40 hours per week. Employees cannot opt out or contractually waive these restrictions on working hours.
Overtime Pay:
All categories of workers, except independent contractors, are entitled to overtime pay. The specific rates for overtime are not fixed by law but are typically determined by the employment contract or collective agreement. Overtime hours are usually compensated at 150 percent of the normal hourly wage. It is not possible for employees to waive their right to overtime pay, except under exceptional circumstances where the threat to human life or the entity's existence requires urgent action.
Vacation and Holidays:
The Labour Act guarantees all workers a minimum of 15 working days of annual leave with full pay. This right to annual leave cannot be waived by the worker, whether through a contract or otherwise. Public holidays, medically certified sick leave, and absence due to pregnancy or confinement do not affect the entitlement to annual leave. If a worker falls sick during their annual leave, the period of sickness is not counted as part of their annual leave. Employees are entitled to full remuneration during public holidays.
Sick Leave and Sick Pay:
The Labour Act allows workers to be absent from work due to certified sickness by a medical practitioner. However, the Act does not specify whether sick pay is provided or establish a maximum duration for sick leave. Pregnant women who become sick due to pregnancy or confinement are entitled to sick leave with full pay. In practice, employers typically have policies outlining the amount of sick leave an employee is entitled to as part of their benefits.
Leave of Absence:
Employees may take a leave of absence with permission for reasons such as participating in communal work or performing civil duties. Special leave with or without pay may also be granted by employers, subject to agreement between the employer and the employee. The Labour Act does not set a maximum duration for this type of leave, nor does it explicitly address remuneration during such periods.