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Employer of Record in Ghana

Employer of Record in Ghana

Skuad’s Employer of Record Ghana (EOR) solutions make business expansion to Ghana easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Ghana, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more, Book a demo today.

Employment in Ghana

The Ghana Labor Act of 2003 (Act 651) states that the companies employing people in Ghana for six months or more should issue and sign a written employment contract. The contract shall express all obligations and rights of the parties in clear terms.

Entitlement Explanation
Statutory working hours The statutory working hours are 40 hours per week.
Overtime eligibility A worker may work overtime only if there are fixed rates for the undertaking. The remuneration for overtime hours is 150% of the regular wages, and for holidays and weekends, it is 200% of the hourly salary.
Paid public holidays The public holidays in Ghana for 2021 are as follows.
  • New Year’s Day
  • Independence Day of Ghana
  • Good Friday
  • Easter Monday
  • Labor Day
  • Eid al-Fitr
  • Africa Day
  • Republic Day
  • Eid al-Adha
  • Founder’s Day
  • Kwame Nkrumah Memorial Day
  • Farmers’ Day
  • Christmas Day
  • Boxing Day
Holiday pay Employees get paid annual leave for up to 15 days, but they need to take it in one allocation.
Medical leave There is no specification of the labor law related to sick leaves. However, if an employee takes a sick leave, it should be certified by a medical professional. It is not counted in the employee’s annual leave entitlement.
Maternity leave

Maternity leave for female employees is 12 weeks, and it is extendable by two weeks in case of complications or multiple births. Once the employee returns to work after the maternity leave, she is entitled to 60 minutes of nursing time during the workday until the child turns one year old.

Currently, there isn’t any provision for paternity leave in Ghana. However, Ghana is working on mandating the same for up to five days.

Annual leave accrual entitlement The minimum yearly leave for employees in Ghana is 15 working days if they have completed one year of employment with the firm.
Leave expiry Employees are entitled to ordinary leaves according to the employment agreement or as decided by the employer (in case there is no agreement). If the employee doesn’t take any leave within 180 days of the relevant year’s annual leave cycle, it has to be forfeited.
Accrued leave at termination The employee is entitled to the following.
  • Remuneration earned before termination
  • Deferred payment of employee that is due
  • Any outstanding compensation
Employee protection and anti-discrimination rights

The Ghana Labor Act, 2003 (Act 651) (page 33) states that any discrimination against a prospective or existing employee based on their race, gender, creed, color, economic status, ethnicity, disability, social affiliation, or religion will be considered as a breach of law.

Also, the business should give equal treatment to its employees in terms of promotions, training, and remuneration.

Confidentiality of personal information The personal data and privacy of individuals are protected under the Data Protection Act, 2012. The companies need to comply with the rules and regulations stated under this act. According to this Act,
  • The personal data of an employee can be processed if processing data is relevant or necessary (Section 19).
  • The prior consent of the employee is mandatory before processing their data.

You can avail yourself of Skuad’s Ghana EOR services to manage your expansion in a timely, hassle-free manner in compliance with the local laws. Talk to Skuad experts for more details.

Contractors vs. Full-time Employees

Hiring Contractors

Contractors are the employees in Ghana who operate independently on a project or contract basis. They are not entitled to employer payroll benefits. Instead, they manage and pay their own taxes. Contractors work for different clients or companies in the short term.

  • When to hire contractors: Employers should consider hiring contractors if the work is not related to the core business of the company, if the role is for a seasonal or short-term project, or if there is no need for close supervision of work.
  • Advantages of hiring contractors: Most businesses consider hiring independent contractors for their work due to the low costs associated. Plus, employers get the flexibility of hiring independent contractors when needed for specific tasks or projects.
  • Disadvantages of hiring contractors: The downside of hiring contractors is that employers don’t have much control over the work performed by contractors as they work independently and manage their workload and deadlines according to their convenience.

Hiring Full-time Employees

Full-time employees are the workers who are engaged with the company full-time. They work according to the company’s directions. Also, they are entitled to payroll and employee benefits.

  • When to hire full-time employees: A company that wishes to conduct work in Ghana in the long term should consider hiring full-time employees if it is a position that does not have an ending date and fits their business model. Employers usually consider full-time positions for the work that is important to the company and its growth.
  • Advantages of hiring full-time employees: Full-time employees are comparatively more committed to the vision of the company. They are loyal and less likely to switch jobs for a more lucrative position elsewhere. Further, the knowledge they gain and trade secrets can remain within the company’s employee circle.
  • Disadvantages of hiring full-time employees: Such employees are eligible for employment benefits and that increases the costs for the employer. Also, employers need to pay their salaries whether the business is making a loss or a profit.

Whether your organization requires contractors or full-time employees, Skuad’s Ghana EOR solution can cater to all your hiring requirements. Learn more by talking to Skuad experts.

Hiring in Ghana

While hiring employees in Ghana, if need be, employers can consider hiring a third-party firm for conducting background checks on prospective employees. However, the investigations should comply with the local laws and not compromise the candidate’s privacy.

The hiring process begins by short-listing the potential applicants and collecting their data from a relevant public domain or third-party employment platforms such as LinkedIn. The consent of the subject is important before collecting the data.

Medical records, criminal records, and other information are considered confidential or personal information under Ghana’s Data Protection Act,2012. Hence, employers can retrieve all this information with the applicant’s consent only or if authorized by the country’s law.

Businesses can also head to job search platforms such as Monster,Craigslist, LinkedIn, and Ghanaian job portals such as GhanaJob.com and Joblistghana for recruitment. Employers often use these popular platforms to post job openings and potential employees create profiles after updating their qualifications. This streamlines and simplifies the recruitment process.

However, there are a few disadvantages of using these job search platforms as there are high chances of redundancy and spam. These platforms have a huge audience, which often diminishes the quality of the user experience on the sites.

Skuad can help you in hiring and onboarding both contractual and full-time employees. Our EOR services are driven toward giving the business the best-in-class cost-saving solutions. Moreover, by having us by your side, you won’t have to deal with the hassle of handling the liabilities related to hiring in Ghana. Our services are completely secure and will ease your work to a great extent. Talk to us to know more about our Ghana EOR solution.

Probation & Termination

Probation Period

The probation period is not specified in the law. However, it should be predetermined through a collective agreement between the employer and employee and should be reasonable. It is recommended to include the probation period, as mutually decided, in a written employment contract.

Termination of Service

Topics Explanation
Notice for termination of employment

In Ghana, both the employer and employee can terminate the contract for valid reasons at any time. A written termination copy should be given to either party. The employee can be paid in place of notice if an “at-will” clause is present in the employment contract. The clause gives an employer the right to terminate the employee at the end of any working day without prior notice.

In other cases, the following shall apply.

Duration of Employment Notice Period
Equal to or more than three years One month
Less than three years Two weeks
Weekly contract Seven days
Contract determinable at will by either party At the end of the working day (no notice required)

To ensure your expansion endeavors adhere to the laws regarding probation and termination in Ghana, talk to Skuad experts and book a demo.

EOR Solution in Ghana

The Employers of Record (EOR) model is a smart solution for companies seeking to enter and expand in Ghana fast and agilely. With the help of Skuad's Employer of Record solution, business entities abroad can quickly source and hire the right professionals as per the organization's requirements. Hired employees get onboard seamlessly, helping your business save up a huge percentage of hiring and onboarding costs. Skuad’s End-to-end solutions help manage employment contracts, process payroll and income tax, blend statutory benefits, and manage overall administration of the backend HR processes. Our platform works as a unified employment platform with automated workflows, digital signatures, employee payroll, contractor payout, and all types of compliance solutions. Book a demo today

General Employer of Record Service Terms

Terms Details
Taxes that apply to invoices

Ghanaian entity: 5.5% of the wages

Foreign company: 3% of the wages

Minimum duration of service

Temporary Employee - One month

Permanent Employee - 2 months

Currency accepted Ghanaian Cedi (GHS)
Required details and documents The following documents are required for Ghana citizens.
  • Copy of passport
  • Personal information
  • Copy of the National Registration Identity Card (NRIC) (for permanent residents)
  • Bank details
  • Job description

The following documents are required for expatriates.

  • Job description
  • Personal information
  • Copy of Contract of employment
  • Technical qualifications
  • Educational qualifications
  • Curriculum vitae (CV)
  • Copy of ID
  • Copy of passport
  • Photographs
  • Bank details
  • Medical exam results
  • Police verification

Outsourcing Employment through an Employer of Record

Whether your business is looking for employees to meet strategic expansion requirements or you require skilled professionals for specific undertakings, our Ghana EOR solutions can help you find the right way to expand your company in Ghana. Contact us today to kick-start your expansion endeavor.

Types of Visas in Ghana

The main types of visas in Ghana are tabulated below.

Visa Category Explanation
Single-entry visas Visas of this category allow the holders to enter the Ghanaian border (one-time) and stay there for at least three months.
Express visas This visa is valid for six months or more and permits the visa holder to enter Ghana multiple times.
Criteria for visa application Follow the guidelines listed below for visa application.
  • International organization personnel, visitors, tourists, and diplomats to Ghana, and individuals looking forward to doing business or studying in Ghana are eligible for visas.
  • Visa processing takes five working days whereas express visas may take only 48 hours.
Documents required for a Ghanaian visa The following documents are needed to apply for a Ghanaian visa.
  • Filled and duly signed visa application form(s)
  • Latest passport-size photographs of the applicant
  • Documents to verify residential and business addresses
  • The contact number of the applicant
  • Occupation and job application details
  • Proposed travel date
  • Income statement
  • Addresses and names of references in Ghana
  • Consent letter from a legal guardian or parent for children aging below 18 years

Talk to us and get more information and guidance related to types of visas and work visa requirements in Ghana. Skuad can handle all your visa requirements and ensure the expansion process is not delayed.

Work Permits

Skuad’s local partner in Ghana can sponsor work permits for employees. As an EOR firm in Ghana, Skuad takes care of all the requirements and responsibilities related to employment.

Work Permits Details and Explanation
Can Skuad sponsor work permits in Ghana? Yes, Skuad can sponsor work permits for your expansion into Ghana.
Processing time The processing time required is between four and six weeks.
Work permit process To initiate your work permit process follow the steps listed below.
  • Get your work permit form from Ghana’s Immigration Service office.
  • Submit a completed and signed Ghana work permit application and all the relevant documents to the Ghana Immigration Service. Make sure to provide the correct information in the form.
  • The applicant is reviewed by the officers, and the information provided by the application is checked to ensure its credibility.
  • If the application is approved the work permit is issued to the applicant.
Work permit validity A work permit is valid for one year.
Where is the application processed? Ghana Immigration Service
Work permit restrictions Ghana Immigration Service reviews the application extensively to ensure all the documents submitted with the work permit application are authentic and complete. Usually, the applications are rejected on the following grounds.
  • The application lacks authenticity or merit.
  • Incomplete information provided by the applicant. In some cases, application approval is subject to additional info which is to be provided by the applicant.
  • A work permit application is approved if it meets the complete set of requirements.
  • It is advised to contact a legal expert before applying for a Ghana work permit as Ghana Immigration Service may request additional documents under particular circumstances. The candidate’s application is assessed and evaluated based on their work profile.

What’s the cost of a business visa? A business visa with a validity of over one year and permitting multiple entries to the visa holder up to five years costs USD 250.
Duration of business visa processing A business visa takes 16 business days to be processed.
Can spouses work on dependent visas? Dependent visas allow the spouses to take advantage of the perks offered under Dependent Residence Permit. They can’t use it for pursuing any activity, business, or profession. They’ll need to apply for a separate permit for working in Ghana.
Termination of work permit A seven-day notice period is mandatory to terminate the work permit of an employee in Ghana.
Documents required for a work permit Applicants need to submit the following documents along with their completed work permit application forms.
  • A copy of the employer’s passport biodata page
  • Certificate of registration of the company
  • Certificate for commencement of business of the company
  • Certificate of incorporation of the company
  • Company’s tax clearance certificate
  • Employee’s police verification report
  • Prospective employee’s medical report
  • Applicant’s educational and professional certificates
  • Current passport-size pictures
  • Company’s appointment letter (if issued)
  • CV
  • Company’s employment contract
  • Completed work permit application form and relevant documents
  • Medical report

To learn more about work permits in Ghana and how Skuad’s EOR solution for Ghana can secure them for you, talk to Skuad experts.

Payroll & Taxes in Ghana

Following acts are applicable in Ghana to manage payroll and taxes in the region

Things You Must Know to Set Up Payroll in Ghana

The Labor Act, 2003 regulates the payroll in Ghana. Every company looking forward to setting up their business in Ghana should have complete information on payroll management solutions. With the right information, they can make better decisions for payroll-related matters.

Payroll solutions in Ghana can be categorized into two outsourcing and in-house payroll systems.

Here is all you need to know about them.

Explanation Outsourcing Payroll System In-House Payroll System
Overview In this case, the company hires a payroll team (third party) to manage all the payment-related tasks such as data entry and calculations. Here, the company manages its payroll set up through its in-house team of experts who have access to the relevant technological resources for managing the department.
Features
  • Enhances profit-generation activities
  • Easy payroll set up and management
  • Access to additional services
  • Cost-efficient
  • More privacy
  • Complete control over the payroll process
Processes involved
  • Payroll processing
  • Remuneration management
  • WPS payment
  • Travel expenses management
  • Reimbursement management
  • Bonuses, overtime, and incentive management
  • Gathering employees information
  • Maintaining records
  • Calculating overtime and wages of employees
  • Managing deductions for leaves and benefit contributions
  • Depositing and withholding taxes
  • Printing and distributing pay stubs or checks
Suitability Ideal for organizations who need an expert for dealing with the complexities involved in payroll setup. Ideally suited for organizations who want complete control and access to the process and aren’t comfortable with sharing information with a third party.
Third-party involvement Yes No
In-house payroll management team required No Yes

Taxes in Ghana

The tax breakdown in Ghana is as follows.

Employer Taxation

Tax Explanation
Financial year-end date December 31
Tax documents

DT 101 Company Income Tax Return

DT 103 Personal Income Tax Return

Corporate tax The corporate income tax rate is 25%.
Withholding tax (for non-residents) The withholding tax rate for non-residents ranges between 3% to 7.5% and depends on tax liability.
Payroll tax 13.00%
Social security and statutory contributions 13.00%
Medical insurance As per the Labor Act 651, employers don’t need to provide insurance for the employees through a health or medical insurance scheme.

Employee Taxation

Tax Explanation
Income tax rates Monthly taxable income
Gross Income in GHS Tax Rate (%)
0–3,828 0%
3,828–5,028 5%
5,028–6,468 10%
6,468–42,468 17.5%
42,468–240,000 25%
Above < GHS 240,000 30%
These tax rates apply to residents only. Non-residents pay taxes at the flat rate of 25%.
Sales tax The sales tax rate in Ghana is 13.50%.
Payroll tax 5.5%
Social security and statutory contributions 5.50%
Tax returns Yes, income tax returns must be filed.

To understand how payroll and taxes are managed in Ghana and expedite your expansion process, talk to Skuad experts and book a demo.

Bonuses

Bonuses account for about 15% of the annual base wage and are taxed at a rate of 5%.

Incorporation: How to Set Up a Subsidiary in Ghana

Company incorporation is one of the first steps to establishing a subsidiary in a different country. Incorporation means that your business has attained a legal status and is operating under local laws.

Before you set up a Ghana subsidiary, it is recommended to research factors such as costs, suitable locations available in the region, and Ghana subsidiary laws. It is best to contact a consultant who can help you find the right solutions, as per your requirements.

Note that the process of subsidiary establishment in Ghana varies according to entity type. Four types of entities can be established in Ghana.

  • Public limited company
  • Limited liability company (LLC)
  • Free zone company
  • Branch office

An LLC is one of the most preferred options as it facilitates businesses the freedom and flexibility to work similarly to a resident company in Ghana.

Follow the steps listed below to set up an LLC in Ghana.

  • Register your office, postal addresses, and place of your business.
  • Authorize your company’s number of shares and issue them.
  • Write down the addresses and names of the shareholders of your company.
  • Hire a company secretary.
  • File and present all the required company documents and other details such as business type.
  • File and document the information of at least two directors.
  • File and document the address and name of your company’s auditor.
  • Obtain the certificate of commencement of business and certificate of incorporation.
  • Obtain a copy of the documents stating the regulations of your company.

Skuad can help you with subsidiary incorporation while saving you both time and money. Also, our services are formulated to ensure statutory compliances for national and international legislation, thereby reducing risks associated with incorporation. As your local partner, we simplify the entire process for the businesses.

To learn more about how our expertly designed solutions can work for you, talk to Skuad experts.

Professional Employer Organization (PEO)

A professional employer organization (PEO) works with businesses for leasing potential employees according to their requirements. The PEO manages and shares various liabilities and responsibilities related to employee hiring.

A PEO may ease the work of the company’s HR department by assisting them with the following.

  • Hiring and recruitment
  • Unemployment management
  • Payroll management
  • Compliance assistance
  • Workers’ compensation management
  • Medical leave management

Both PEOs and EOR services take control of an organization’s HR functions, but they differ in various aspects.

1. A PEO is a co-employer; thus, your company has an equal say when hiring employees. The PEO takes care of employee reviews, on-boarding, and contract termination. They may even offer advice to help you to make informed decisions related to hiring. However, in the end, the final decision remains with you.

On the other hand, an EOR service provider serves as the legal employer for your company in Ghana. In other words, the EOR service manages HR tasks efficiently and autonomously.

2. If you have access to enough resources for supplying the compliance documents, a PEO is an appropriate option for your organization.

However, if you do not know the local laws, an EOR service makes business expansion to new markets comparatively easier. In this case, you’ll have an expert by your side who will handle your organization’s hiring requirements.

3. Since a PEO is a co-employer, it does not take responsibility for any compliance-related liabilities and damages to your organization.

An EOR service is legally the owner of your subsidiary. Therefore, any issues arising due to the accidental contravention of the laws of the land are handled by an EOR service.

Skuad's EOR solution is a good way to expand your business in Ghana without setting up a separate entity. Our solutions help you to stay focused on your business and leave all business compliances, payroll processing and complete management work to us. Connect with Skuad to know more.

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