Collaborating with an Employer of Record (EOR) can be a strategic choice. A Ghanaian EOR handles all employment-related tasks, ensuring compliance with local labor laws. This encompasses payroll and tax management, allowing your company to maintain control over operations while delegating administrative responsibilities.

Growing your team in Ghana entails finding the right talent at the right moment and for the right positions. However, managing compliance, payroll, taxes, and benefits in Ghana can be challenging due to intricate employment regulations.

This is where Gloroots's global Employer of Record (EoR) service becomes valuable. With Gloroots, you can offload the complexities of payroll, taxes, benefits, and compliance, enabling you to concentrate on what truly matters – your employees and your company's growth.

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As an employer in Ghana, you may encounter a common challenge: correctly categorizing your workers as either employees or freelancers, known as "misclassification." This error can lead to problems, including inadequate benefits and legal issues.

However, there's a solution: Partnering with a PEO/EOR in Ghana. They specialize in ensuring compliance, accurate worker classification, fair compensation, and the provision of appropriate benefits. This allows you to concentrate on your business while entrusting employment matters to experts.

Ghana's labor landscape is regulated by a robust legal framework, primarily comprising the Labor Act 2003 (Act 651) and the Labor Regulations. These legal documents form the foundation of employment and labor laws in Ghana.

The Labor Act in Ghana explicitly defines a "contract of employment" and incorporates an implicit provision that underscores the mutual trust and confidence between employers and employees.

This summary offers a comprehensive glimpse into Ghana's labor code, serving as a valuable resource for businesses aiming to maintain adherence to employment regulations during the recruitment and management of their workforce.

Employment contract

In Ghana, an employment contract is required for work exceeding six months or equivalent working days. The Labor Act No 651 of 2003, which aligns with ratified ILO Conventions, governs labor laws.

Contracts can be written or oral, and within two months of employment commencement, the employer must provide a written statement outlining key terms like job title, pay, hours, and relevant details.

Employment terms are negotiable, and three basic contract types exist:

1. Permanent employment: Requires a written contract with essential details like wages, working hours, leave, and termination notice. Employment is continuous until age 60. Foreign workers need a work permit obtained through the Ghana Immigration Service.

2. Casual employment: Governed by the Labor Act, covers seasonal or intermittent work up to six months. Remuneration is calculated daily.

3. Temporary employment: Workers receive minimum wage, with specific regulations for hours, rest, holidays, night work, and sick leave, as per the Act. This applies regardless of any prior agreements.

For employers in Ghana, understanding these contract types and labor regulations is essential.

Working time

In Ghana, the typical workweek comprises 40 hours, usually distributed as 8 hours per day over five days. Some sectors may extend the workweek to 48 hours.

Overtime

Overtime work in Ghana is governed by employment contracts or collective agreements. When employees are asked to work beyond standard weekly hours or on holidays, there are limits to the number of hours allowed. These limits are set at 48 hours per week, with varying maximum working hours for minors.

For hours worked beyond the standard 40 hours per week, employees are compensated at a rate of 150% of their regular pay.

Public Holidays

There are 14 Public Holidays.

Minimum Wage

The minimum daily wage in Ghana stands at 19.97 GHS.

Annual Leave

Full-time employees in Ghana earn 15 working days of annual paid leave after one year of employment.

Paid Sick Leaves

The law does not mandate paid sick leave, but sick leave must be taken upon producing a medical certificate from a doctor.

Maternity leaves

Pregnant employees in Ghana are eligible for 12 weeks of paid maternity leave (which extends to 14 weeks for multiple or complicated births) at their regular pay rate, with the employer covering the cost. After returning from maternity leave, mothers are entitled to one hour of leave during the workday for nursing until the child reaches one year of age.

Paternity leaves

There are no legal provisions for paternity leave.

Tax and Social Security contribution

Employer Payroll Contributions

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Employer Payroll Contributions

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Employee Income tax

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Termination 

The termination process in Ghana is contingent upon the employment or collective bargaining agreement and hinges on the type of contract and the grounds for termination. Either the employer or employee can terminate the employment contract with written notice.

In cases where termination is perceived as unjust, employees can lodge a claim with the labor court, and in certain instances, they may have their employment reinstated.

In situations where employment is considered "at-will," either party can terminate the employment without notice at the end of the day. However, if the employment contract lacks an "at-will" clause, it's possible to provide compensation to the employee in lieu of notice.

Severance Pay

In cases of individual dismissals without economic reasons, there is no severance pay required.

When termination results from redundancy, compensation is determined through negotiations between the employer and the employee.

Notice Period

Notice periods in Ghana are as follows:

1. In the case of week-to-week contracts, seven days' notice is mandatory.

2. For employment contracts lasting fewer than three years, two weeks' notice or two weeks' pay in lieu of notice is necessary.

3. For contracts of 3 or more years, one month's notice or one-month pay in lieu of notice is required.

4. Contracts that can be terminated at will by either party may end at the close of the day without any notice.

Probation period

Probation periods in Ghana are typically specified in the employment contract or collective bargaining agreement.