Ghana Payroll Outsourcing, Payroll Software and Employer Of Record (EOR) services.
Contact us for a payroll simulation, ask a practical question or download our free country guide for Ghana.
GHANA
Deploy one employee or payroll thousands. Why not just contact us to find out how?
Save time! Don't spend hours researching!
Contact us for a payroll simulation, ask a practical question or find out how things work in the country.
Ghana Payroll and Employer of Record: Employment Contracts
Ghana, like every other country, has a set of visas and work permits available to foreign nationals. Citizens of the Economic Community of West African States (ECOWAS) are not required to obtain a visa to visit Ghana. All other foreign nationals must apply for a visa at the Ghanaian embassy in their home country.
Business Visas
- Requirement: Most business visitors to Ghana need a Business Visa (B-1).
- Exemptions: Some foreign nationals are exempt based on their citizenship.
- Entries: B-1 visas allow for single or multiple entries.
- Initial Stay: Applicants can request an initial stay of 30 to 60 days.
- Extension: Business visas can be extended once for an additional 60 days, totaling a maximum stay of 120 days.
Vaccination Requirement
- Yellow Fever: All travelers must be vaccinated against yellow fever at least 10 days before travel. Proof of vaccination is required, and it must be within 10 years before entering Ghana.
Living and working in Ghana
- Resident and Work Permits: International citizens need both a resident permit and a work permit, in addition to an admission visa, to live and work in Ghana.
- Work Permit:
- Issued by the Ghana Immigration Service (GIS).
- Authorizes the employment of foreign nationals.
- Specifies the number and type of allowed workers.
- Typically valid for one year (rarely up to six months).
- Includes the employer’s name and specifies the employment, business, or professional occupation allowed.
- Types of Work Permits:
- In-Quota Work Permit: For companies with a pre-approved quota.
- Standard Work Permit: For all other foreign workers (no quota but longer processing time).
- PC (Petroleum Commission) Work Permit: For companies in the oil and gas sector.
- Residence Permit:
- Sought after the work permit is granted.
- Requires a formal application to the Ghana Immigration Service, usually submitted by the employer on behalf of the employee.
PAID TIME OFF
Annual Vacation
A full-time employee’s yearly paid leave entitlement is 15 working days after one year of employment.
Sick
In Ghana, there is no legal requirement for paid sick leave. Employees, however, need to provide a medical certificate if they take off.
Maternity
Pregnant employees are entitled to 12 weeks of paid maternity leave (increased to 14 weeks in the case of multiple or complex deliveries) at 100% of their usual pay rate.
When a woman returns from maternity leave, she is entitled to one hour of paid time off during the workday to nurse her child until the child turns one year old.
Paternity
There are no legal requirements for paternity leave.
Family
An employee may be permitted extra leave pending employer approval for the following:
- Adoption: An employee who adopts a child under the age of ten is entitled to paid leave, depending on the average pay of the employee.
- Childcare leave: A mother or father can take paid (minimum salary) childcare leave, which varies depending on the age of the child.
- 3 days’ leave for up to two children under the age of 14.
- 6 days’ leave if you have three or more children under the age of 14.
- Parents of disabled children should consider the following: Until the child reaches the age of 18, the mother or father can take an extra day off each month.
National Holidays
Ghana has a total of 13 public holidays, which are paid.
Other Paid Time Off
Employees are entitled to paid bereavement or compassionate leave. The law does not provide a minimum number of days.
STATUTORY EMPLOYEE BENEFITS
Unemployment
Unemployment insurance and benefits are not covered by the law.
Workers Compensation
The Work men’s Compensation Act of 1987 requires all employers of labor to set aside money to compensate any employee who is injured on the job, whether or not the employer is at fault.
The act’s definition of a worker has been broadened to encompass anybody who earns a salary or wages, with the exception of outworkers, tributaries, and family members of the employer who live with the latter, or if the law bans them from working.
Social Security
The social security contribution scheme in Ghana is structured into three tiers:
Tier 1 and Tier 2 (Mandatory Contributions)
- Employee Contribution: 5.5% of the basic salary.
- Employer Contribution: 13% of the basic salary.
- Total Contribution: 18.5% of the basic salary.
- First Tier: 13.5% is remitted to the SSNIT within 14 days after the month ends.
- Health Insurance: 2.5% of the 13.5% goes to the NHIA for health insurance.
- Second Tier: 5% is sent to a mandatory occupational scheme managed by NPRA-approved Trustees.
- First Tier: 13.5% is remitted to the SSNIT within 14 days after the month ends.
Tier 3 (Voluntary Contributions)
-
- Contribution Limits: There are no restrictions on amounts.
- Tax Exemption: Contributions up to 16.5% by both employers and employees are tax-exempt if paid to an approved fund manager.
- Taxable Contributions: Contributions exceeding 16.5% are taxable for the employee, employer, or both.
Retirement
Both full and partial pensions are available under the National Pension Act. A worker must be at least 60 years old (55 years if working in hazardous conditions) and have contributed for at least 180 months (15 years) to be eligible for a full pension. Workers over the age of 55 who have contributed for at least 180 months (15 years) are eligible for an early pension.
The average wage of a worker’s best three years is used to calculate pensions under the 2014 change. For each month of contributions surpassing 180 months, 37.5 percent of the insured’s average annual earnings in the three best years of earnings is paid, plus 0.09375 percent of the insured’s average annual earnings in the three best years of earnings. If you have more than the required number of contribution years, your pension will be enhanced by 1.125 percent for each additional year.
Expatriates
- Contribution Requirement: You generally must contribute to mandatory social security schemes unless you are exempt.
- Upstream Petroleum Industry: Expatriate employees of contractors and subcontractors are exempt from participating in Ghanaian insurance, compensation, or other social benefit programs.
Contribution Limits: Effective 2024
- Minimum Insurable Earnings: GHS 490.05.
- Maximum Insurable Earnings: GHS 52,000
Benefits under the SSNIT Scheme
- Superannuation Pension/Old Age Pension
- Invalidity Pension
- Survivor’s Lump Sum
- Emigration Benefit
Health
Private medical aid is available based on an employee’s voluntary sign-up or for the employer to offer it.
2.5% of mandatory social security contributions go towards the NHIA for the member’s health insurance.
Life insurance is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. There is a workers compensation act.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
Private workers compensation is available in Ghana.
Retirement
Private retirement/pension schemes are available in Ghana.
Health
Private healthcare is available in Ghana.
Insurance
Private life insurance is available in Ghana.
PERSONAL INCOME TAX
Tax Year
Tax year runs from January 1st to December 31st.
Tax Tables
| Chargeable income (GHS) | Rate of tax (%) |
| First 5,880 | 0 |
| Next 1,320 | 5.0 |
| Next 1,560 | 10.0 |
| Next 38,000 | 17.5 |
| Next 192,000 | 25.0 |
| Next 366,240 | 30.0 |
| Exceeding 600,000 | 35.0 |
Non-residents pay taxes at the flat rate of 25%.
Taxation Method
Taxes are levied at a progressive rate based on income earned during the calendar year.
Double Taxation
Ghana has multiple double taxation agreements.
Residence Requirements
If a person meets the following criteria, he or she is considered a resident for the evaluation for a year:
- A Ghanaian citizen (other than one who has a permanent residency outside of Ghana for the whole assessment year) who is present in Ghana for a period or periods totaling 183 days or more in any 12-month period that begins or ends during the assessment year.
- On assignment overseas, a Ghanaian government employee or official
- A Ghanaian citizen who has been out of the country for less than 365 days (where the individual has a permanent home in Ghana).
Payroll Calendars
- Employees are not required to be paid on a set schedule.
- Payrolls can be done weekly, biweekly, fortnightly, or monthly.
Rebates & Tax Credits
There is a tax credit against their tax payable for both residents and non-residents who have had tax withheld from any income earned in Ghana (for which the tax is not a final tax) up to the entire amount of any such tax withheld.
In addition, an installment payer is entitled to a tax credit for a year of assessment equal to the amount of tax paid in installments for the year.
Health Insurance
Private medical aid is available based on an employee’s voluntary sign-up or for the employer to offer it.
2.5% of mandatory social security contributions go towards the NHIA for the member’s health insurance.
Unemployment
Unemployment insurance and benefits are not covered by the law.
Social Security
The social security contribution scheme in Ghana is structured into three tiers:
Tier 1 and Tier 2 (Mandatory Contributions)
- Employee Contribution: 5.5% of the basic salary.
- Employer Contribution: 13% of the basic salary.
- Total Contribution: 18.5% of the basic salary.
- First Tier: 13.5% is remitted to the SSNIT within 14 days after the month ends.
- Health Insurance: 2.5% of the 13.5% goes to the NHIA for health insurance.
- Second Tier: 5% is sent to a mandatory occupational scheme managed by NPRA-approved Trustees.
- First Tier: 13.5% is remitted to the SSNIT within 14 days after the month ends.
Tier 3 (Voluntary Contributions)
- Contribution Limits: There are no restrictions on amounts.
- Tax Exemption: Contributions up to 16.5% by both employers and employees are tax-exempt if paid to an approved fund manager.
- Taxable Contributions: Contributions exceeding 16.5% are taxable for the employee, employer, or both.
Expatriates
- Contribution Requirement: You generally must contribute to mandatory social security schemes unless you are exempt.
- Upstream Petroleum Industry: Expatriate employees of contractors and subcontractors are exempt from participating in Ghanaian insurance, compensation, or other social benefit programs.
Contribution Limits: Effective 2024
- Minimum Insurable Earnings: GHS 490.05.
- Maximum Insurable Earnings: GHS 52,000
Benefits under the SSNIT Scheme
- Superannuation Pension/Old Age Pension
- Invalidity Pension
- Survivor’s Lump Sum
- Emigration Benefit
PAYROLL ELEMENTS
Income
Salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and certain lump-sum perks are examples of remuneration (revenue from employment). Profits or losses made by a company or trade. Income or profits derived from an individual’s status as a trust beneficiary.
Bonuses
13th-month bonuses are not mandatory by law.
Total incentive payments made by employers to their employees in a given year are taxed at a rate ranging from 5% to 15% of the employee’s yearly basic salary.
If the bonus payment exceeds 15%, the remaining amount will be added to the employee’s employment income and taxed at the progressive tax rate.
Allowances
Transport allowance and rent (accommodation) allowance are some of the allowances that will be added to income for PAYE reasons.
Benefits in Kind
Income Tax Exemptions are amounts that are subtracted from or subtracted from income because they are not subject to taxation. These exemptions must be specified during the filing process.
The following amounts are exempt:
- President’s salary, allowances, benefits, pension, and gratuity;
- Income derived directly from the activity of the government or municipal governments;
- Profits of a non-profit public corporation;
- Pension
- Other types of income that are tax-free include:
Gaining from life insurance proceeds when they are paid by a local insurer;
- If the Commissioner-General is satisfied that a comparable exemption is provided to persons residing in Ghana by a non-resident person’s country of residence, the income of a non-resident person from a business that operates ships or planes;
- When a resident company receives a dividend from another resident company, the company receiving the dividend has at least 25% voting power in the firm paying the dividend. Certain particular industries are exempt from this exception.
Other types of income tax exemptions:
- Interest or dividends on an investment paid or credited to a unit trust scheme or mutual fund holder or member;
- Interest and gains realized by a non-resident on bonds issued by the Ghanaian government;
- Profits from the sale of GSE-listed securities;
- Income from a unit trust or mutual fund that has been approved; and
- Income from a Real Estate Investment Trust that has been approved.
- Any other exemption authorized by law.
Investment Income
Residents and non-residents alike are liable to a final withholding tax (WHT) of 8% on dividends. Non-residents will be subject to the provisions of any existing double tax treaties (DTTs). Interest income paid to people by a domestic financial institution is tax-deductible. Similarly, interest paid to people on government bonds, including treasury bills, is tax deductible.
Retirement Funding
Retirement Funding is funded through the Social Security (SSNIT) Scheme.
Health Insurance
Private medical aid is available based on an employee’s voluntary sign-up or for the employer to offer it. 2.5% of mandatory social security contributions go towards the NHIA for the member’s health insurance.
Risk Insurance
Life insurance is a private option and is based on an employee’s voluntary decision to sign up or for the employer to offer it. There is a Workers Compensation Act.
Taxable Income
The following are examples of taxable income from job, business, and investment for a resident:
-
- Employment Income: Includes all gains and profits from employment, allowances, and benefits (excluding reimbursements for employment-related expenses, medical or dental costs, passage to or from Ghana, and redundancy pay).
- Business Income: Profits from trade, business, profession, or vocation.
- Capital Gains: Gains from the sale of assets and liabilities.
- Other Income: Includes gifts, dividends, fees, annuities, royalties, premiums, and other property earnings.
- Royalties and Receipts: All types of royalties and payments from transactions related to natural resources in Ghana, whether paid within or outside the country.
Non-residents are subject to income tax on money earned in Ghana from trade, business, profession, or work performed in Ghana.
Allowable Deductions
-
- Personal Deductions
Social security contributions, certain insurance premiums, and donations.
- Personal Allowances
- Tax-Free Threshold: The annual threshold is GHS 5,880.
- Annual Reliefs:
- Dependent spouse or at least two dependent children: GHS 1,200.
- Disabled individuals: 25% of assessable income
- Aged 60 or more: GHS 1,500.
- Dependent child or ward education: GHS 600 per dependent (up to 3 dependents).
- Aged dependents (over 60 years): GHS 1,000 per dependent (up to 2 dependents).
- Professional or vocational training costs: up to GHS 2,000.
- Employees can claim these reliefs using Tax Relief Cards provided by the Commissioner General.
- Business Deductions
Private or domestic expenses are generally not deductible.
- Deductible business expenses:
- Interest on money borrowed for acquiring income-producing assets.
- Rent is paid for land or buildings used for income generation.
- Repairs and maintenance expenses for depreciable assets (up to 5% of the written-down value).
- Research and development expenses.
- Capital allowances are calculated based on specified methods for trading stock and assets used in the business.
- Expenses for research and development (R&D), regardless of whether the expense is of a capital kind.
- Capital allowances.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
No other payroll taxes other than the mandatory social security contributions ( Tier 1 and 2 ).
Unemployment
Unemployment insurance and benefits are not covered by the law.
Social Security
The social security contribution scheme in Ghana is structured into three tiers:
Tier 1 and Tier 2 (Mandatory Contributions)
- Employee Contribution: 5.5% of the basic salary.
- Employer Contribution: 13% of the basic salary.
- Total Contribution: 18.5% of the basic salary.
- First Tier: 13.5% is remitted to the SSNIT within 14 days after the month ends.
- Health Insurance: 2.5% of the 13.5% goes to the NHIA for health insurance.
- Second Tier: 5% is sent to a mandatory occupational scheme managed by NPRA-approved Trustees.
- First Tier: 13.5% is remitted to the SSNIT within 14 days after the month ends.
Tier 3 (Voluntary Contributions)
- Contribution Limits: There are no restrictions on amounts.
- Tax Exemption: Contributions up to 16.5% by both employers and employees are tax-exempt if paid to an approved fund manager.
- Taxable Contributions: Contributions exceeding 16.5% are taxable for the employee, employer, or both.
Expatriates
- Contribution Requirement: You generally must contribute to mandatory social security schemes unless you are exempt.
- Upstream Petroleum Industry: Expatriate employees of contractors and subcontractors are exempt from participating in Ghanaian insurance, compensation, or other social benefit programs.
Contribution Limits: Effective 2024
- Minimum Insurable Earnings: GHS 490.05.
- Maximum Insurable Earnings: GHS 52,000
Benefits under the SSNIT Scheme
- Superannuation Pension/Old Age Pension
- Invalidity Pension
- Survivor’s Lump Sum
- Emigration Benefit
Workers Compensation
The Workmen’s Compensation Act of 1987 requires all employers of labor to set aside money to compensate any employee who is injured on the job, whether or not the employer is at fault.
The act’s definition of a worker has been broadened to encompass anybody who earns a salary or wages, with the exception of outworkers, tributaries, and family members of the employer who live with the latter, or if the law bans them from working.
ADMINISTRATION
Income
Monthly pay-as-you-earn (PAYE) returns must be filed by employers within 15 days after the end of the month. Employers must file a return of income for all of their workers who work in Ghana by the 31st of March following the end of each assessment year. Within four months at the conclusion of a person’s base period, a return of income shall be lodged with the Ghana Revenue Authority (GRA). The payment of CIT is required on the same date as the filing of the return. The tax is paid in four equal installments at the end of each quarter (March, June, September, and December) in each assessment year, although these payments are not considered to represent the real tax due. All taxpayers must file final tax returns and pay any unpaid taxes at the end of the year. Within four months of the financial year’s conclusion, the final return and tax are due.
Penalties
If tax is not paid by the due date, a penalty of 125 percent of the statutory rate is applied to the amount owed at the start of the term, compounded monthly.
Payroll Taxes
SSNIT (of which 2.5% is paid to NHIA) is paid when paying employee income tax.
Unemployment
Unemployment insurance and benefits are not covered by the law.
Social Security
SSNIT (of which 2.5% is paid to NHIA) is paid when paying employee income tax.
Workers Compensation
The Workmen’s Compensation Act of 1987 requires all employers of labour to set aside money to compensate any employee who is injured on the job, whether or not the employer is at fault.
Statutory Benefits
Ghana currently has a national health insurance program that covers all citizens’ essential basic health needs. Employers could, however, provide additional health benefits or provide employees with a monthly stipend to help them obtain their own health care.
Employee Benefits
The country observes 12 national holidays, and employees should be entitled to paid time off on those holidays. In most cases, all employees are entitled to at least 15 days of paid yearly leave. In Ghana, most female employees are entitled to at least 12 weeks of paid maternity leave. Currently, no paternity leave is required, but the government is seeking to establish legislation requiring five days of paid paternity leave.
LEGISLATION
Labor Act
STATUTORY BODIES
-The National Labour Commission
-Public Utilities and Regulatory Commission
-The Securities and Exchange Commission
-The National Commission on Culture
-The National Petroleum Authority
-Ghana Revenue Authority
