Using an Employer of Record in Ghana

Ghana is among the stable democracies in West Africa. With a young workforce, the growing tech and finance sectors have put the African country firmly on the radar for international businesses. 

Whether you plan to hire full-time employees, engage independent contractors, or test a new market, understanding local labor regulations is the first step toward success. That process gets complicated fast if you do not have a registered entity in the country.

This is exactly the problem an employer of record in Ghana helps solve. EORs like Payoneer Workforce Management support by acting as the legal employer, so you can access talent locally without setting up a local entity, and focus on running the business.

Read on for a full breakdown of hiring, payroll, and labor laws in Ghana, or explore Payoneer Workforce Management to see how we can support your expansion.

How to hire employees in Ghana

Typically, three options are available to companies looking to engage talent in Ghana.

1. Set up a local entity: Register with the Office of the Registrar of Companies. Get a TIN from the Ghana Revenue Authority. Sign up with SSNIT. If your company has foreign ownership, you must also register with the Ghana Investment Promotion Centre and meet the capital minimums.

However, this requires a lot of time and budget, and it could take a few months before you make the first hire.

2. Hire independent contractors: This route is quick to set up but comes with risk. If you treat contractors the same way you would treat employees, you could run into misclassification issues under Ghana’s Labor Act. And that comes with penalties.

3. Use an Employer of Record: An EOR in Ghana acts as the legal employer. You may still manage the person’s daily work and their projects. The EOR assists with employment contracts, payroll, SSNIT, income tax, and local compliance, without setting up a local entity.

Payoneer Workforce Management allows businesses to onboard talent compliantly in 160+ countries without the need to establish a local legal entity. 

The platform helps businesses navigate local labor regulations while enabling the setup of country-specific benefits in line with local requirements.

How to onboard employees in Ghana

Once you have found the right person, onboarding employees in Ghana generally involves issuing a locally compliant employment contract, collecting employee documents, registering the new hire with SSNIT and the Ghana Revenue Authority, and setting up their payroll in Ghana Cedi. 

You also need to enroll them in the National Health Insurance Scheme (NHIS).

The employee onboarding workflow generally includes:

• Payroll and statutory benefits setup: Register the employee in the local payroll. Finalize all legally required benefit enrollments per the Labor Act.
• Equipment distribution: It is essential to make sure the new employees get all the devices and access, so they are equipped to be operational from day one.
• First-week orientation: Walk the new hire through company policies, introduce the team, and get them set up with the tools they need.

Payoneer Workforce Management helps companies engage talent across borders in a compliant manner through its technology-driven platform. We support with the paperwork so you can focus on getting your new team member productive.

Pay employees in Ghana

Salaries go out in Ghanaian Cedi. Most employers pay on the 25th of each month, with an expense adjustment cut-off on the 15th.

Income tax and social security obligations

To run a compliant Ghana payroll, you need to manage two things: PAYE income tax and SSNIT contributions.

Ghana implements a progressive tax system from 0% to 35%, administered by the Ghana Revenue Authority. 

Now for social security. SSNIT manages the pension system in Ghana, covering pensions, disability benefits, and survivor benefits. 

The employer contributes 13% of the employee’s basic salary. The employee contributes 5.5% of their basic salary.

Add it up, and the employer cost lands at roughly 15.50% on an annual salary of USD 60,000. The actual number depends on the employee’s salary and benefits.

You can use our employee cost calculator for a detailed employment cost breakdown.

Using an employer of record offers a simpler way to pay employees in Ghana. Payoneer Workforce Management gives you a single dashboard to manage payroll, deductions, and statutory filings across a global workforce.

Employment laws in Ghana

Everything starts with the Labor Act, 2003 (Act 651). This one piece of legislation governs hiring, working conditions, leave, termination, and dispute resolution. The National Labor Commission handles enforcement.

Working hours

Standard working hours in Ghana are 8 hours per day. 

Overtime

Overtime is allowed. The Labor Act does not cap overtime hours or mandate a specific rate. In practice, though, most companies have settled on these norms:

Probation

The maximum probation period is six months. During probation, you need to give one to two weeks’ notice before ending things. After probation, the notice period jumps to one month.

We assist you in staying compliant with local labor laws using Payoneer Workforce Management’s infrastructure. Particularly useful if your company does not have in-house legal counsel who knows Ghanaian employment law.

Minimum wage in Ghana

Ghana’s National Tripartite Committee sets the minimum wage in Ghana each year. The national minimum wage in Ghana sits at GHS 490 per month. 

However, these rates change every year, so it is worth checking official announcements before budgeting for new hires.

Employment contracts in Ghana

The Labor Act says employers must give every employee a written contract, typically within two months of their start date. It has to be in a language the employee can actually understand.

Employment contracts in Ghana typically include:

• The employee’s name and personal details
• Whether the contract is fixed-term or indefinite
• Start date and location of work
• Job title and a description of what the role involves
• Pay, bonuses, and benefits
• Working hours and leave entitlements
• Probation details
• Termination conditions and notice period
• Any collective agreements that apply to the role

There are a few contract types recognized under Ghanaian law: indefinite-term, fixed-term, and casual or temporary arrangements. Which one you pick depends on the role.

By using an Employer of Record in Ghana, drafting these contracts becomes streamlined with the support of experts. Payoneer Workforce Management helps establish locally compliant benefits in line with country-specific laws and requirements, while enabling quick and secure onboarding through localized contracts and payroll.

Leave policy in Ghana

The Labor Act spells out what employees are entitled to. Here is a quick rundown.

Annual leave

Every employee gets at least 15 working days of paid leave per year if they have completed 12 months of continuous service.

Moreover, the law requires the employees to take leave in the same calendar year and doesn’t allow waiving them off.

A few unused leaves may be carried forward, but this won’t be allowed indefinitely. 

Sick leave

Employees can take sick leave. They will need a medical certificate to back it up. The Act does not pin down a specific number of paid sick days, though. It usually gets sorted out in the employment contract or through a collective agreement.

Public holidays

Ghana recognizes 13 public holidays a year. Paid time off on each one. 

Here’s the list of public holidays in Ghana:

• New Year’s Day 
• Constitution Day 
• Independence Day 
• Eid-al-Fitr 
• Good Friday 
• Easter Monday 
• Labor Day (May Day) 
• Eid-al-Adha 
• Founder’s Day 
• Kwame Nkrumah 
• Memorial Day 
• Farmer’s Day 
• Christmas Day
• Boxing Day

Maternity and paternity leave

Women get 12 weeks of maternity leave paid for by the employer. During this period, employees are protected from dismissal.

In any special circumstances, employees can request an additional 2 weeks of leave.

For paternity leave, there is no legal requirement. Some companies offer it voluntarily, but the law does not mandate it.

Work permit in Ghana

Any foreign national who wants to work in Ghana needs both a work permit and a residence permit. The Ghana Immigration Service processes these, and the Ministry of the Interior signs off on work permit approvals.

Typically, it is the employer’s job to file the application. Employers will need to show that a Ghanaian national cannot fill the position. 

Documents typically required: a valid passport, the company’s Certificate of Incorporation, a Tax Clearance Certificate, and a GIPC certificate if the company has any foreign ownership.

For more information, you can refer to the government site.

Background check in Ghana

Some employers carry out background checks before engaging an employee. These checks are subject to local regulations and require consent from the person being screened.

You can check criminal records through the Ghana Police Service, academic credentials with the institution that issued them, previous employment history, professional licenses, and personal references.

Employers must consult local regulations before initiating background checks in Ghana.

Employment termination in Ghana

In Ghana, employers must showcase genuine reasons to let an employee go. Any unfair dismissal can lead to legal consequences.

Valid reasons for termination include resignation by the employee, a mutual agreement between both parties, termination during probation, and dismissal for misconduct, poor performance, or unapproved absence.

Notice periods

During probation, the notice period is one to two weeks. After probation, the notice period changes to one month. These can also vary based on the employment contract, but the Labor Act sets the floor.

Severance pay

Ghana does not have a fixed formula for severance. What an employee gets is usually a matter of negotiation. Things like end-of-service benefits, annual bonuses, and festival bonuses are dependent on company policy, not the law.

Working with an employer of record in Ghana can help you navigate terminations in a compliant way. This is especially important because termination disputes can drag on and cost more than getting it right the first time.

Company registration in Ghana

Some businesses may want to explore registering a business in Ghana, as it offers direct control over administration.

The typical process to set up a local entity in Ghana includes: 

1. Register with the Office of the Registrar of Companies
2. Reserve a company name 
3. File incorporation documents 
4. Pick up the Certificate of Incorporation
5. Register for a TIN with the Ghana Revenue Authority and sign up with SSNIT.

Foreign companies also need to register with GIPC. 

For many companies, using an employer of record in Ghana is faster and simpler. Payoneer Workforce Management helps you with compliant onboarding of talent in 160+ countries without having to set up a legal entity.

PEO in Ghana

A Professional Employer Organization, or PEO, can handle HR and payroll tasks in Ghana. But there is a catch: you need to have a legal entity in the country already to use one.

An employer of record in Ghana acts as the legal employer, so you do not need to establish your own entity. For companies testing the market or hiring a small team, this is usually the more practical path. 

If you feel like exploring working with local contractors, you may use a contractor management tool, like an Agent of Record (AOR).

Learn more about the difference between AOR and EOR.

Payoneer Workforce Management’s Employer of Record services in Ghana

Payoneer Workforce Management helps growing companies onboard, manage, and pay employees in Ghana without setting up a local entity.

As your EOR in Ghana, we offer assistance with employment contracts, employee benefits administration, taxes, and payroll, while you retain control over daily operations.

Book a demo to learn more about Payoneer Workforce Management.

FAQs

1) What is an Employer of Record in Ghana?

An EOR in Ghana is a third-party organization that onboards and legally employs workers on behalf of another company. They help manage payroll, taxes, and employment contracts so you can engage talent without setting up your own entity. 

2) How much does it cost to hire in Ghana?

Employer costs come to about 15.50% on top of an annual salary of USD 60,000. The real number varies depending on salary and benefits. For a more precise figure, try the employee cost calculator.

3) What social security contributions do employers owe in Ghana?

Usually, the employer should contribute 13% of the basic salary to the SSNIT. The employee pays 5.5%.

4) How long does employee onboarding in Ghana take?

If you are onboarding talent by setting up a local entity, it may take a few months. However, if you use an EOR, like Payoneer Workforce Management, it typically takes a few business days.

5) Can a foreign company hire in Ghana without registering a local entity?

Yes. An international business can use an employer of record in Ghana. The EOR supports the legal employment relationship, so the company does not need to set up its own entity.