Employer of Record in Ghana

Hiring employees in Ghana involves navigating a distinct set of labor laws, tax regulations, and local compliance requirements. Businesses looking to expand their operations into the Ghanaian market must understand these intricacies to ensure a smooth and legally sound recruitment process, whether for a single employee or an entire team.

For companies aiming to hire talent in Ghana, several pathways are available, each with its own advantages and complexities:

• Establishing a Local Entity: This involves incorporating a company in Ghana, registering with relevant authorities, and setting up internal HR and payroll functions to manage local employees directly. This option grants full control but requires significant time, capital, and ongoing administrative effort.
• Utilizing an Employer of Record (EOR): Partnering with an EOR like Rivermate allows companies to hire employees in Ghana without needing to establish their own legal entity. The EOR acts as the legal employer, handling all local compliance while the client company directs the employee's day-to-day work.
• Hiring Independent Contractors: Engaging individuals as independent contractors in Ghana can offer flexibility. However, it requires careful adherence to local classification rules to avoid misclassification risks, which can lead to significant penalties.

How an EOR Works in Ghana

An Employer of Record simplifies global expansion by taking on the legal and administrative responsibilities associated with employment in Ghana. Specifically, an EOR in Ghana typically manages:

• Legal employment: Serving as the legal employer of your Ghanaian workforce.
• Payroll processing: Ensuring accurate and timely payment of salaries in local currency.
• Tax withholding and remittances: Handling all employer and employee tax obligations, including Pay As You Earn (PAYE), Social Security, and other statutory contributions.
• Benefits administration: Managing mandatory and supplementary employee benefits in line with Ghanaian labor laws.
• HR support: Providing guidance on local employment contracts, leave policies, and other HR best practices.
• Compliance: Ensuring adherence to Ghana's labor codes, social security acts, and other relevant employment regulations.

Benefits of Using an EOR in Ghana

For companies looking to hire quickly and efficiently in Ghana without committing to local entity establishment, an EOR offers compelling advantages:

• Rapid Market Entry: Hire talent in Ghana in days or weeks, rather than months, by bypassing entity setup.
• Reduced Administrative Burden: Delegate complex payroll, tax, and HR compliance to local experts.
• Guaranteed Compliance: Mitigate risks of non-compliance with Ghana's intricate labor laws and tax regulations.
• Cost Efficiency: Avoid the significant upfront and ongoing costs associated with establishing and maintaining a local subsidiary.
• Access to Top Talent: Secure skilled professionals in Ghana without geographical limitations or the need for extensive local infrastructure.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Ghana includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Ghana.

Ghana's tax system, managed by the Ghana Revenue Authority (GRA), requires employers to fulfill specific social security and payroll obligations. Employers must contribute 13% of each employee's basic salary to SSNIT, with employees contributing 5%. Additionally, they must withhold and remit 2.5% each for the National Health Insurance Levy (NHIL) and the Ghana Education Trust Fund (GETFund). There is no separate payroll tax beyond these levies.

Employers are also responsible for deducting income tax via the Pay-As-You-Earn (PAYE) system, based on progressive rates up to 25% for income above GHS 49,488, with remittance due by the 15th of the following month. Employees can benefit from deductions such as marriage, disability, education, and contributions to provident funds and health insurance. Employers must file annual returns and remit taxes on time to avoid penalties.

Ghana's salary landscape varies by industry, role, and location, with notable salary ranges across sectors. For example, software developers earn between GHS 70,000 and 150,000 annually, while medical doctors can earn up to GHS 200,000. Other roles include accountants (GHS 40,000–80,000), marketing managers (GHS 65,000–130,000), and civil engineers (GHS 55,000–110,000). Salaries tend to be higher in Accra and for more experienced professionals.

Employers must adhere to the legal minimum wage of GHS 17.44 per day (2025), with mandatory contributions to SSNIT and income tax (PAYE). Compensation packages often include bonuses such as performance, end-of-year, and allowances for transportation, housing, and utilities. Payments are typically made monthly via bank transfer or mobile money, with some sectors still using cash.

Salary trends are expected to rise moderately in 2025, driven by economic growth, inflation, and skills shortages in sectors like technology and finance. Companies should regularly review compensation strategies to stay competitive in this evolving market.

Ghanaian labor laws mandate a minimum of 15 working days of annual vacation leave after 12 months of continuous service, with employees entitled to their regular salary during this period. Leave is typically scheduled by mutual agreement, and accrued leave should generally be used within a reasonable timeframe, though some flexibility exists for leave in advance. Public holidays are observed nationwide, with specific dates such as Independence Day (March 6), Christmas (December 25), and others, and are paid days off; if they fall on weekends, they are usually observed on the following Monday.

Employees are protected by sick leave provisions, generally requiring a medical certificate for absences exceeding three days, with pay equivalent to regular salary during leave. Ghana also provides for parental leave: 14 weeks of maternity leave with full pay for women, and 7 days of paternity leave with full pay for men. Additional leave types include bereavement, study, sabbatical, and religious leave, often governed by employer policies or collective agreements.

In Ghana, employers must provide mandatory benefits such as contributions to SSNIT (18.5% of basic salary, with 13% employer and 5.5% employee contributions), paid annual leave (15-30 days), paid public holidays, sick leave, maternity leave, and end-of-service benefits. While NHIS enrollment is mandatory for all residents, employers typically do not contribute directly, though many supplement coverage with private health insurance for broader access.

Optional benefits that enhance employee satisfaction include private health insurance, provident funds, life and disability insurance, transportation and housing allowances, meal allowances, professional development opportunities, and performance bonuses. Benefits vary by industry and company size, with large multinationals offering comprehensive packages, including private health insurance, provident funds, and various allowances, whereas SMEs tend to offer more limited benefits.

In Ghana, employment agreements are essential for defining the legal relationship between employers and employees, ensuring compliance with labor laws and preventing disputes. They typically fall into two main types: fixed-term contracts, which specify a duration and end automatically unless renewed, and indefinite-term contracts, which have no set end date and offer greater job security.

Key clauses that must be included in employment contracts encompass job title, start date, work location, working hours, remuneration, benefits, leave entitlements, and termination procedures. Probationary periods usually last 1-3 months, during which employment can be terminated with notice or payment in lieu, and must be confirmed in writing upon successful completion. Confidentiality clauses protect sensitive information, while non-compete clauses are enforceable only if reasonable in scope, duration, and geographical area.

Modifications to employment terms require mutual agreement and written documentation. Termination by either party must adhere to legal notice requirements, with unfair dismissals subject to complaint to the National Labour Commission. Overall, clear, well-drafted agreements aligned with Ghanaian regulations are vital for legal compliance and effective employment management.

Remote work in Ghana is increasingly adopted, driven by technological progress and demand for better work-life balance. While no specific laws govern remote work, existing labor laws (e.g., Labor Act, 2003) apply equally to remote employees, requiring employers to ensure health, safety, and proper infrastructure, including tax and social security contributions.

Flexible arrangements such as telecommuting, part-time, and staggered hours are popular, with clear policies needed for communication, performance management, and data privacy. Data protection under the Data Protection Act, 2012, mandates secure data handling, minimizing personal data collection, and respecting data rights. Employers should develop comprehensive policies, provide training, and implement secure remote access solutions.

Key data points:

Equipment and expense policies should specify provision and reimbursement criteria, with clear documentation. For example:

Overall, successful remote work in Ghana hinges on clear policies, compliance with legal and data regulations, and effective communication and infrastructure support.

In Ghana, employee termination must comply with the Labor Act, 2003 (Act 651), which stipulates notice periods based on service length: 2 weeks for less than 3 years and 1 month for 3 or more years. Employers can opt for payment in lieu of notice, and collective agreements may impose longer notice periods. Severance pay is mandated for employees terminated due to redundancy or other non-misconduct reasons, typically calculated as two weeks to one month’s salary per year of service.

Key grounds for termination include misconduct, poor performance, breach of contract (with cause), or redundancy and business closure (without cause). Proper procedural steps—investigation, written notice, hearing, documentation, and prompt payment—are essential for lawful termination. Employees are protected against unfair dismissal and discrimination, with remedies available through the National Labour Commission if wrongful termination occurs.

Ghana's economy is increasingly adopting flexible work models, leading to a rise in freelancing and independent contracting across various sectors. This trend provides businesses with access to specialized skills on demand and offers individuals greater autonomy and diverse work opportunities. Employers must understand the legal, contractual, and tax frameworks governing these relationships to ensure compliance and foster productive engagements. Proper classification of workers is essential, as misclassification can lead to significant legal and financial penalties. Ghanaian law uses a multi-factor test, primarily the "control test," to differentiate between employees and independent contractors.

Key factors for classification include control, integration, tools used, exclusivity, payment, risk, duration, and benefits. Contracts for independent contractors in Ghana should clearly define the scope of work, payment terms, intellectual property rights, confidentiality, and termination clauses. Intellectual property rights must be explicitly stated in contracts to avoid default ownership by the contractor. Independent contractors are responsible for their own tax obligations, including obtaining a Tax Identification Number (TIN), declaring income, and potentially registering for VAT if their turnover exceeds the threshold. While not legally required, obtaining professional indemnity and public liability insurance is advisable.

Independent contracting is prevalent in sectors such as technology, creative industries, consulting, education, media, construction, and healthcare, driven by the demand for specialized skills and project-based work. Employers engaging independent contractors should ensure robust contract structures and compliance with tax and legal obligations to mitigate risks and maximize the benefits of flexible work arrangements.

Foreign professionals seeking employment in Ghana must obtain appropriate visas and work permits before starting work. The primary visa types include Business Visa (short-term), Work Visa/Permit (long-term employment), and Special Immigrant Visa for specialized skills. Employers are responsible for sponsoring applications, which require comprehensive documentation such as passports, educational and professional credentials, employment contracts, company registration, tax clearance, police clearance, and CVs.

The work permit application process involves employer sponsorship, submission to the Ghana Immigration Service (GIS), review, and approval, with processing times ranging from several weeks to months. Key eligibility criteria include the position not being readily available to Ghanaians and the applicant possessing relevant qualifications. Employers must ensure all foreign staff hold valid permits and adhere to legal obligations, while employees must comply with permit conditions and law.

Foreign nationals with extended legal residence and contribution to Ghana’s economy may qualify for permanent residency. Dependents can be sponsored through visas, contingent on proof of relationships and financial support. The following table summarizes key permit data:

Employers and employees must ensure ongoing compliance with visa regulations, including timely renewals and reporting changes to the GIS.