GHANA

Compliant HR, Payroll, Immigration & Tax

OVERVIEW

Ghana is a country in West Africa. With a land mass of 238,535 km² and is the 80th largest country in the world with a land mass of 238,535 km. Ivory Coast to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south borders Ghana.

Ghana means “Warrior King” in the Soninke language.

Ghanaian people originated in the Ghanaian Gold Coast and are the predominant cultural group and residents of Ghana, numbering over 20 million people. 85,4 % of the total population consists of Ethnic Ghanaians

GENERAL INFORMATION

country capital

CAPITAL CITY

Accra

language

OFFICIAL LANGUAGE

English

currency

CURRENCY

Ghanaian Cedi (GHC) (GHS)

dial code

DIALLING CODE

+233

tax calculator

TAX AUTHORITY

Revenue Authority
http://www.gra.gov.gh/

tax dates

TAX YEAR

1 January – 31 December

time zones

TIME ZONE

Greenwich Mean Time GMT
(UTC + 00:00)

GENERAL INFORMATION

country capital

CAPITAL CITY
Accra

language

OFFICIAL LANGUAGE
English

currency

CURRENCY
Ghanaian Cedi (GHC) (GHS)

dial code

DIALLING CODE
+233

tax calculator

TAX AUTHORITY
Revenue Authority
http://www.gra.gov.gh/

tax dates

TAX YEAR
1 January – 31 December

time zones

TIME ZONE
Greenwich Mean Time GMT 
(UTC + 00:00)

MORE INFORMATION

Public Holidays
New Year’s Day – 01 Jan
Constitution Day – 07 Jan
Independence Day of Ghana – 06 Mar
Good Friday – 19 Apr
Easter Monday – 22 Apr
Labour Day – 01 May
Africa Day – 27 May
Eid al-Fitr – 4 – 5 Jun
Republic Day – 01 Jul
Founder’s Day – 05 Aug
Eid al-Adha – 11-12 Aug
Kwame Nkrumah Memorial Day – 23 Sep
Farmers’ Day – 06 Dec
Christmas Day – 25 Dec
Boxing Day – 26 Dec

Immigration:

No foreigner may employ or accept employment unless in possession of a work permit or immigrant quota which are the authorization granted to an employer or employee to engage in lawful and gainful employment in Ghana.

The holder cannot engage in any other employment, business, profession or occupation in Ghana for reward than what is specified by the work permit or Immigrant quota as the work permit or immigrant quota indicates the job title and the employer by whom that person is employed and the holder.

A Work permit is valid for a period of 1 year and can be renewed. Unless the person is granted residence permit by the Director of Immigration to remain and work in the country a foreigner who has been granted work permit or immigrant quota cannot start working immediately.

It is important for foreigners intending to work in Ghana to apply and obtain work permits from the relevant authorities before the commencement of work. Ghana Immigration Service regulates examination and authorization of application for visas, entry and residence permits in Ghana. A Ghanaian must be a citizen by birth with no criminal recordand must have completed National Service. Minimum age is 21 and maximum 35 years.

Requirements for Work & Residence Permit in Ghana

  1. Passport
  2. Curriculum Vitae/ Resume
  3. Six (6) Passport Size pictures
  4. Police Clearance Certificate from home country
  5. Educational Certificates – Scanned Copy

For Dependents

  • Spouse
    1. Passport
    2. Marriage Certificate
    3. Police Clearance Certificate
    4. Six (6) Passport Size photos
  • Children under 18 years
    1. Passport
    2. Birth certificate
    3. Six (6) Passport Size Pictures

Additional Requirements

  1. Medical report from a reputable hospital
  2. Non-Citizen ID card from the National Identification Authority Ghana

Permission, in the form of a stamp in your passport, referred to as a visa, allows you to enter and stay in Ghana under set conditions and for a set period.

A Ghanaian visa should be obtained prior to arrival as it is a requirement for South Africans travelling to Ghana.

The turnaround time for applications for visas for Ghana typically take 10 to 15 working days to process.

Payroll Ghana and Tax Compliance

A challenging aspect of working in Ghana is compliance and their tax system. Regardless of being a contractor or a permanent employee, you have to pay tax on all of your earnings whilst you are working in Ghana. In addition to paying tax in Ghana, you may still be eligible to pay tax in your home country. Allowances must be taxed as well. This is a conscious effort by the government to enhance Ghana’s tax regime.

Deductions from wages either on a statutory or voluntary basis. A voluntary deduction is what the employer offers, and the employee accepts. A statutory deduction what the federal or state law requires. 

Statutory deductions take various forms.

Employ Africa can you support the Payroll & Tax Compliance of all your expatriate and local Employees & Contractors in Ghana.

Payroll for locals is calculated and paid in Ghana cedi.

Payroll for expatriate personnel is typically administered in United States Dollars (USD).

For all income derived from carrying out an assignment in Ghana, income tax is payable to the Domestic Tax Revenue Division (DTRD) at the prescribed rates for either resident or Non-resident Employees. Taxes are deducted from the Employee’s salary/wages at source and paid over to the Domestic Tax Revenue Division (DTRD) on a Monthly basis in line with the Ghana tax regulations.

At the end of each tax year, or at the termination of the Employment (Whichever is the earliest) a statement of earnings for the current tax year must be provided to the employee to include with their tax return in their home country.

2018 Personal income tax rates – (IRPP) 

Annual Income (GH¢)

Tax rate (%)

Tax

Cumulative Chargeable Income (GH¢)

Cumulative Tax (GH¢)

0 – 3,132

0

Nil

3,312.00

Nil

Next 840

5%

42.00

3,972.00

42.00

Next 1,200

10%

120.00

5,172.00

162.00

Next 33,720

17.5%

5,901.00

38,892.00

6,063.00

Exceeding 38,892

25%

 

 

 

Please note: Non-residents pay taxes at the flat rate of 20%

Social insurance system

The social security contribution scheme is structured into 3 tiers, with the first 2 requiring mandatory contributions and the last being voluntary.

The employee should contribute 5.5% with the employer contributing 13%. Of the total contribution of 18.5%, 13.5% is contributed to the first tier and 5% to the second-tier schemes. These contributions are deductible for tax purposes.

Under the third tier the employer and employee contributions are unlimited, however the tax deduction from the contribution for both employer and employee is limited to 16.5% of income.

In respect of a pure payroll processing function. We would in addition to running the payroll, we would also declare and pay over on your behalf the local statutory burden and IRPP deductions to the local authority

Head Count

Per person per payroll

Monthly submission and payment fee

Payroll changes/ Starters/ Leaver

Parallel Run

Payroll Setup per person (Once off)

1 – 50

$ 15

$350

$ 15

$ 7.5

$ 15

51 – 99

$12

$350

$12

$6

$12

100 +

$10

$350

$10

$5

$10

African Payment Solutions

In addition to the pure payroll solution we are to offer you a great additional add on benefit, whereby we manage the payments into the foreign countries.

When we transfer USD from SA to USD in another country the cost of the transaction is USD40 (This includes the sending and the recipients receiving fees).

When we transfer USD to another currency, the cost to you for the transaction will be USD$15 per transaction. (This includes the sending and the recipients receiving fees).

Employment contracts regulate interactions between employees and employers in an employment relationship. The Labour law requires that within 2 months of employment every permanent employee should be given a contract stating the particulars of conditions and terms of the contract. 

Contracts of employment may be verbal or in writing. An understanding between the parties resulting in quid pro quo as in Pay for Labour service will normally constitute a binding employment contract whether in writing or not. Both parties’ intentions should be determined in the contract.

  • Three basic types of contracts exist:
  • permanent employment (Continuous until 60 yrs.)
  • Casual Employment (seasonal and intermittent work for not more than six months) and
  • temporary employment (project based with fixed duration).
  • Contracts are negotiable and so when an employee is made an employment offer, they can negotiate the contract offer.

When employees work for six months or more, they are not deemed be made permanent. This is false at law. Temporary work failing to specify the duration, (open ended) when the employee works for more than six months it is deemed at law that the employer intends for a continuous permanent contract and therefor holds that employees should then be treated as though they were permanent but not necessarily made permanent. 

The National Labour commission regulates Employment issues. The Labour department and inspectorate also is required to inspect work premises to ensure compliance with the Labour laws. 

Contracts can only be terminated with cause’ on lawful grounds. Non-performance, misconduct, ill health and death of the employee may result in the fair termination of employment. Without lawful cause, termination will be deemed as unfair resulting in a claim for compensation by the terminated employee.

A contract of employment may be terminated by the employer on the on the following grounds:

  • Incompetence or lack of qualification in relation to the work for which the employee is employed
  • Proven misconduct of the employee
  • Redundancy
  • Legal restriction which is imposed on the employee prohibiting the employee from performing the work for which he or she is employed

What amounts to unfair termination

Based on the following reasons outlining termination of an employment contract:

  • That the employee has joined or intends to join or has ceased to be a member of a trade union or intends to take part in the activities of a trade union
  • That the employee seeks office as, or is acting or has acted in the capacity of an employee representative
  • That the employee has filed a complaint or participated in proceedings against the employer involving alleged violation of this Act or any other enactment
  • The employee’s gender, race, colour, ethnicity, origin, religion, creed, social, political or economic status has been discriminated against
  • In the case of a woman employee, due to the pregnancy of the employee or the absence of the employee from work during maternity leave
  • In the case of an employee with a disability, due to the employee’s disability
  • That the employee is temporarily ill or injured and this is certified by a recognised medical practitioner;
  • That the employee does not possess the current level of qualification required in relation to the work for which the employee was employed which differs from the level of skills/qualifications required at the commencement of his or her employment
  • That the employee has refused or indicated an intention to refuse to do any work normally done by an employee who was taking part in a lawful strike unless the work is necessary for the maintenance of plant and equipment.

Fixed Term Contracts

Ghanaian Labour Law allows hiring fixed term contract employees for tasks of permanent nature. There is no mention of the maximum duration (including renewals) of the fixed term contracts as stipulated in the Labour Act which makes no reference to any specific legal regime for the use of fixed-term contracts.

Temporary employee is an employee who is employed for a continuous period of at least one month and is not a permanent employee or employed for a work that is seasonal in character; while casual employee is an employee engaged on a work which is seasonal or intermittent and not for a continuous period of more than 6 months and remuneration is calculated on a daily basis. A temporary employee who is employed by the same employer for a continuous period of six months and more is treated as a permanent employee.

Probation Period

Collective agreements generally provide probationary period and conditions of probation. Where, as a condition for the engagement of an employee, a contract of employment requires probation, the employment contract must specify the duration of the probation for the employee.

Notice of termination of employment

 An employment contract may be terminated at any given time by either party giving to the other party,

 (a) in the event of a contract of three years or more, one month’s notice or one month’s pay in lieu of notice;

(b) notice or two weeks’ pay in lieu of notice; or

 (c) in the event contract from week to week, seven days’ notice.

An employment contract determinable at will by either party may be terminated at the close of any day without notice. Notice should be in writing.

The period of notice includes the day on which the notice is given shall be included in the period of the notice.

Remuneration on termination of employment

When an employment contract is terminated in the manner stated in section 15, the employer shall pay to the employee,

  1. any remuneration earned by the employee before the termination;
  2. any deferred pay due to the employee before the termination;
  3. any compensation due to the employee in respect of sickness or accident; and
  4. employee and accompanying members of his/her family expenses and necessaries for the journey and repatriation in addition to any or all the payments specified in paragraphs (a), (b) and (c) of this subsection in the event of foreign contract.

The employer shall pay to the employee not later than the date of expiration of the notice all remuneration due to the employee as at that date.

The payment of all remuneration, where no notice is required due shall be made not later than the next working day after the termination.

Parties to a contract of employment may terminate the contract without notice if that party pays to the other party a sum equal to the amount of remuneration which would have been granted to the employee during the period of the notice. Except in instances where in a collective agreement express provisions with respect to the terms and conditions for termination of the contract of employment which are more beneficial to the employee.

GENERAL CONDITIONS OF EMPLOYMENT

Annual leave with pay Leave entitlement

Employees are entitled to not less than fifteen working days leave with full pay in any calendar year of continuous service.

The expression “full pay” means the employee’s normal remuneration, without overtime payment, including the cash equivalent of any remuneration in kind.

Leave to be uninterrupted

Employees are entitled to enjoy an unbroken period of leave but an employer, in cases of urgent necessity, may in accordance with this section, require an employee to interrupt his or her leave and return to work.

Where an employee is required by the employer to interrupt his or her leave in the circumstances specified in subsection

 

  • the employee shall not forfeit the right to the remainder of the leave but shall take the leave anytime thereafter.
  • where an employee takes his or her annual leave at the end of a calendar year, the leave may continue except as provided in subsection
  • without interruption, into the following year.
  • employer to bear cost of leave interrupted

Any employer who requires an employee to interrupt his or her annual leave in the circumstance stated in shall make up to the employee any reasonable expense incurred on account of the interruption, and resumption of the leave by the employee.

Leave entitlement to be restored to suspended employee on reinstatement

Where an employee, is suspended from the service of his or her employer prior to disciplinary or criminal proceedings being taken against him or her is reinstated, the employee shall be allowed to take the leave he or she would have had if he or she had not been suspended.

Sick Leave

The Labour Act does not state clear provision in the Labour Act about paid sick leave and its length, it only says that sick leave certified by the medical practitioner is independent of annual leave.

Medical Care

There is no mention in the labour act about the medical care however medical benefits are provided under the National Health Insurance Program.  A range of healthcare services are provided free of charge, including inpatient and outpatient services, emergency care, eye treatment, and dental and maternity care. The program does not cover costs for rehabilitation (other than physiotherapy), prostheses, certain surgeries (including organ transplants and cosmetic surgeries), antiretroviral treatment for HIV, dialysis, and cancer treatment (other than cervical or breast cancer).

Employers are required to pay the medical expenses in respect of the occupational injury.

Job Security

There is no provision in the above act that an employee’s job is secure during the first 6 months of his/her illness. An employer can’t dismiss an employee during his/her period of sickness (only if it is temporary and for short period), pregnancy or disability according to the Labour Act.

Maternity Leave

Female employees are entitled to 12 weeks (84 days) of maternity leave with full pay. Pregnant employee must provide medical certificate issued by a medical practitioner or mid- wife, indicating the expected date of her confinement.

Maternity leave may be extended by two additional (2) weeks in case of caesarean delivery/abnormal birth or twin (or more) births. Extended leave may be granted in case of illness due to pregnancy or confinement, certified by the medical practitioner.

Income

Employees on maternity leave are entitled to full wages during the eighty-four-day period. The maternity benefit is paid by the employer. A woman employee on maternity leave is entitled to her full remuneration and other benefits to which she is otherwise entitled.

Family Responsibilities

Paternity Leave

There is no stipulation in the law on paid or unpaid paternity leave.

Parental Leave

There is no stipulation in the law on paid or unpaid parental leave.

Flexible Work Option for Parents / Work-Life Balance

No stipulation could be in the law supporting work-life balance for parents or employees with family responsibilities.

Hours of work Maximum hours of work

The hours of work of an employee shall be a maximum of eight hours a day or forty hours a week except in cases expressly provided for in this Act.

Paid overtime

  • Where an employee in an undertaking works after the hours of work fixed by the rules of that undertaking, the additional hours done shall be regarded as overtime work.
  • An employee in any such undertaking may not be required to do overtime work unless that undertaking has fixed rates of pay for overtime work.
  • An employee shall not be compelled to do overtime work except for undertakings or enterprises
  • the nature of which requires overtime in order to be viable; or
  • overtime work which are subject to emergencies that require that employees engage in in order to prevent or avoid threat to life and property.

Shifts

Employees can be employed to work shifts, but the average number of hours over a period of four weeks or less shall not exceed forty hours a week and eight hours a day if there is an established timetable for the shifts.

Unpaid overtime

In certain exceptional circumstances including an accident threatening human lives or the very existence of the undertaking, an employee may be required to work beyond the fixed hours of work without additional pay.

Rest periods Undertakings to which this Sub-Part applies

In any undertaking where;

(a) the normal hours of work are continuous, a employee is entitled to at least thirty minutes break in the course of the work, but the break forms part of the normal hours of work; and

(b). the normal hours of work are, in two parts, the break should not be of less than one-hour duration and does not form part of the normal hours of work.

Daily rest period

Without prejudice to an employee a daily continuous rest shall be granted of at least twelve hours duration between two consecutive working days.

The daily rest of the employee in an undertaking operating on a seasonal basis may be of less than ten hours but of not more than twelve hours.

Weekly rest period

A employee shall, in addition to the rest periods provided they, be given a rest period of forty-eight consecutive hours, in every seven days of normal working hours, and the rest period may, for preference, start from Saturday and end on the Sunday following and shall wherever possible, be granted to all of the employees of the undertaking.

 Rest periods not to include public holidays

The rest periods specified does not include public holidays.