Employer of Record in Ghana

An Employer of Record (EOR) helps you hire employees in Ghana without setting up a local legal entity. The EOR becomes the legal employer for your team members, handling all the administrative and legal requirements of employment. This means you can focus on managing your team's day to day work while the EOR takes care of the rest. For companies looking to hire in Ghana, an EOR provider like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Ghana

Using an EOR in Ghana follows a straightforward process. You find the talent, and the EOR legally hires them on your behalf.

Here is how it typically works:

1. You Choose Your Candidate. You recruit and select the person you want to hire in Ghana.
2. The EOR Creates a Compliant Contract. The EOR drafts an employment agreement that complies with Ghana's Labour Act. This contract will outline the job role, salary, and benefits.
3. The EOR Onboards Your New Hire. The EOR manages the onboarding process. They collect all necessary documents, like tax registration numbers and bank details. They also register your employee with the Ghana Revenue Authority (GRA) and the Social Security and National Insurance Trust (SSNIT).
4. Payroll and Benefits are Managed. The EOR handles monthly salary payments. They ensure accurate deductions for taxes (PAYE) and social security contributions.
5. You Manage Your Employee. Your new team member works for your company just like any other employee. You handle their daily tasks and responsibilities. The EOR remains the legal employer, managing HR and compliance in the background.

Why use an Employer of Record in Ghana

Using an EOR is a practical solution for companies expanding into Ghana. It allows you to build a team quickly and efficiently while minimizing risk. You get access to a new talent pool without the bureaucratic hurdles of establishing a local company.

Here are some key benefits:

• Stay Compliant. An EOR ensures you follow all Ghanaian labor laws. This includes rules on contracts, minimum wage, and mandatory employer contributions to social security (SSNIT). You can find more details on employer obligations from the Social Security and National Insurance Trust at their official website (https://www.ssnit.org.gh/).
• Hire Faster. You can onboard new employees in a fraction of the time it would take to set up a legal entity in Ghana. This speed allows you to seize business opportunities without delay.
• Reduce Costs. Setting up and maintaining a foreign subsidiary is expensive. An EOR provides a more cost effective way to hire internationally by outsourcing HR and payroll functions.
• Simplify Operations. The EOR manages all payroll, tax, and HR administration. This frees up your time to focus on your core business goals and managing your team.

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.

Hiring in Ghana gives you access to a well-educated and motivated workforce. The business environment is generally stable and open to foreign investment. To hire employees, you typically need to establish a legal entity in the country. However, many companies choose to partner with an Employer of Record (EOR) to simplify the process and ensure compliance with local labor laws.

Employment contracts & must-have clauses

In Ghana, you must provide employees with a written contract within two months of their start date, especially for employment lasting six months or more. While verbal agreements are recognized, a written contract is highly recommended to ensure clarity and legal compliance.

Your employment contracts should include these essential clauses:

• Parties' Information: Full names and addresses of both the employer and the employee.
• Job Details: A clear description of the role, responsibilities, and reporting structure.
• Start Date: The official date the employment begins.
• Wages: The agreed-upon salary, how it's calculated, and how often it will be paid.
• Working Hours: The standard daily and weekly working hours.
• Leave Entitlements: Details on annual, sick, and other types of leave.
• Termination: The conditions for ending the contract, including required notice periods.

Probation periods

You can include a probationary period in your employment contracts. The law doesn't set a maximum duration, but it must be a "reasonable" length of time that is determined in advance.

• Common Practice: Most companies set a probation period of three to six months.
• Termination: During probation, either party can typically end the contract with a shorter notice period.

Working hours & overtime

The standard workweek in Ghana is 40 hours, typically eight hours per day.

• Overtime: Any work done beyond the standard hours is considered overtime. Overtime pay rates are usually set in the employment contract or a collective agreement, often at 150% of the normal hourly wage.
• Rest Periods: Employees are entitled to a 30-minute break for continuous work and a daily rest of at least 12 consecutive hours between workdays.

Public & regional holidays

Ghana has approximately 13 nationally recognized public holidays. If a holiday falls on a weekend, the following Monday is often declared a day off.

Here is a list of Ghana's public holidays:

Hiring contractors in Ghana

Hiring independent contractors in Ghana can be a flexible way to access specialized skills without the long-term commitments of employment. Contractors are self-employed and are responsible for their own taxes and social security contributions.

A key difference between an employee and an independent contractor is control. Contractors generally have autonomy over how, when, and where they complete their work. Their relationship is governed by a service contract, not employment law.

Incorrectly classifying an employee as a contractor, known as misclassification, can lead to serious consequences, including fines, back taxes, and payment of employee benefits. An EOR can help you mitigate this risk by ensuring your workers are classified correctly according to Ghanaian law. This helps you stay compliant and avoid potential legal and financial penalties.

In Ghana, handling compensation and payroll means following a clear set of rules. You need to understand the local laws for paying employees, calculating taxes, and making social security contributions. Staying compliant is key to attracting and keeping good people. This guide breaks down what you need to know about payroll in Ghana.

Payroll cycles & wage structure

You can pay your employees on a weekly, bi-weekly, or monthly basis. Most companies choose a monthly payroll cycle, with payments made on the same day each month. This payment must be in the local currency, the Ghanaian Cedi.

An employee's salary has a few parts. The basic salary is the fixed amount you agree on. On top of that, you have allowances, bonuses, and overtime pay. When you subtract deductions like taxes and social security, you get the employee's net salary.

Overtime & minimums

The standard work week in Ghana is 40 hours, typically eight hours a day for five days. Anything beyond these hours is overtime. You must pay employees 150% of their regular pay rate for any overtime hours worked.

Ghana has a national minimum wage. As of early 2024, the daily minimum wage is GHS 13.53.

Employer taxes and contributions

As an employer, you are responsible for contributing to social security for your employees. This is a mandatory contribution. The social security system is a multi-tier program that includes a basic pension and a second-tier occupational pension scheme.

A portion of your social security contribution, 2.5%, goes to the National Health Insurance Authority.

Employee taxes and deductions

Employees also contribute to social security and pay income tax. You must deduct these amounts from your employees' paychecks and send them to the correct government agencies.

Income tax in Ghana is progressive, meaning the tax rate increases as an employee's income increases.

Here are the income tax brackets for employees:

In Ghana, providing the right benefits and leave is key to attracting and keeping great people. It’s not just about what you have to offer by law. It’s about creating a supportive workplace. Understanding the local rules is the first step. This ensures you are compliant and competitive.

Statutory leave

Ghanaian law sets out the minimum leave you must provide.

• Annual Leave: After one year of continuous work, employees get a minimum of 15 paid working days off. This doesn't include public holidays.
• Maternity Leave: Female employees are entitled to at least 12 weeks of fully paid maternity leave. This can be extended by two weeks for multiple or complicated births.
• Sick Leave: While there is no statutory requirement for a specific number of paid sick days, employers should have a clear policy. Employees who provide a medical certificate can take sick leave without it affecting their annual leave.

Public holidays & regional holidays

Your team in Ghana is entitled to paid time off for public holidays. If an employee works on a public holiday, they should receive extra pay.

Note: Eid holidays are determined by the sighting of the moon.

Typical supplemental benefits

To be a competitive employer, you should offer more than the legal minimum. Here’s a look at both required and common extra benefits.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be tricky. An Employer of Record (EOR) makes it simple.

An EOR acts as the legal employer for your team in Ghana. This means they handle all the HR tasks, including benefits administration. They make sure you comply with all local labor laws, so you don't have to worry about fines or legal issues.

Here’s how an EOR helps:

• Compliance: An EOR understands Ghana's employment laws and ensures your benefits package is fully compliant.
• Administration: They manage everything from enrolling employees in statutory schemes like social security to administering private health insurance.
• Payroll: An EOR handles all payroll calculations, including deductions for benefits and taxes.
• Saves Time: You can focus on your business goals while the EOR takes care of the complex HR work.

Using an EOR allows you to offer competitive benefits without needing to set up a legal entity in Ghana. It’s a straightforward way to hire and support your team.

When your relationship with an employee in Ghana comes to an end, you need to handle their exit carefully. The process, known as termination and offboarding, is more than just a handshake and a goodbye. It involves legal steps and clear communication to ensure you treat your departing team member fairly and protect your business. Following Ghana's labor laws is not just good practice; it's a requirement.

Notice Periods

When you decide to part ways with an employee, you must provide them with a written notice period. The length of this period depends on how long the employee has worked for you.

Here are the minimum notice periods required by Ghana's Labour Act:

You can also choose to pay an employee in lieu of notice. This means you pay them their full salary and benefits for the notice period, and their employment ends immediately.

Severance Pay

In Ghana, you are required to pay severance in cases of redundancy. Redundancy happens when you need to reduce your workforce due to operational changes or financial difficulties.

The law doesn't provide a specific formula for calculating severance pay. Instead, you must negotiate the terms with the employee or their union representative. The final amount usually considers factors like:

• The employee's length of service
• Their current salary
• Terms in the employment contract
• Industry standards

How Rivermate Handles Compliant Exits

Navigating employee exits in a different country can be complex. We make sure every termination and offboarding process in Ghana is handled correctly and respectfully.

Here’s how we help:

• Legal Compliance: We stay up to date with Ghana's labor laws to ensure every step of the termination process is compliant.
• Clear Documentation: We prepare all necessary documents, including the termination letter, to ensure clarity and legal soundness.
• Fair Negotiations: In cases of redundancy, we guide you through the severance negotiation process to ensure a fair outcome for both you and your employee.
• Smooth Offboarding: We manage the entire offboarding process, from final payroll and benefits to the return of company property, making the transition as smooth as possible.

Navigating visas and work permits in Ghana requires a clear understanding of the process. You need to know the right steps to take to bring foreign talent into the country legally. The system has several layers, but we can break it down for you. For anyone looking to work in Ghana, securing both a work permit and a residence permit is essential. Your company will start the work permit application on behalf of your employee.

Employment Visas & Sponsorship Realities

An Employer of Record (EOR) can simplify hiring in Ghana. An EOR acts as the legal employer for your team, handling everything from payroll to taxes. This means you can hire talent without setting up your own legal entity in the country.

Here’s what an EOR can typically sponsor:

• Work Permits: An EOR can sponsor work permits for your employees. They manage the application process with the Ghana Immigration Service (GIS).
• Long-Term Work Visas: EORs can facilitate long-term employment visas for your staff.

Keep in mind that sponsorship is for full-time employees. Independent contractors and freelancers follow a different path and are not eligible for employer sponsorship.

The practical route to employing someone in Ghana involves these steps:

1. EOR Partnership: You partner with an EOR that has a registered legal entity in Ghana.
2. Job Offer: The EOR extends a compliant job offer to your chosen candidate.
3. Work Permit Application: The EOR submits the work permit application to the GIS on behalf of the employee.
4. Visa and Permit Issuance: Once approved, the employee receives the necessary work visa and permit to legally work in Ghana.

Business Travel Compliance

For short-term visits, a business visa is the correct route. This visa is for activities like meetings, negotiations, or conferences. It is not for long-term work.

To get a business visa, you will generally need to provide:

• A valid passport with at least six months of validity.
• A completed visa application form.
• A letter of invitation from a company in Ghana.
• A letter from your current employer explaining the purpose of your trip.
• Proof of sufficient funds to cover your stay.
• Proof of onward or return travel.
• Evidence of accommodation, like a hotel reservation.

It's important to have all your documents in order to avoid delays. The specific requirements can vary slightly depending on the Ghanaian embassy or consulate in your country.