Employer of record in Ghana

PAID LEAVE

Annual Vacation: Full-time employees are entitled to 15 days of paid leave annually after completing one year of service.

Sick Leave: There is no statutory requirement for paid sick leave in Ghana. However, employees must present a medical certificate when taking leave due to illness.

Maternity Leave: Expectant mothers are granted 12 weeks of fully paid maternity leave. In cases of multiple or complicated births, this period extends to 14 weeks. Upon returning to work, mothers are allowed one hour of paid break daily for breastfeeding until their child reaches one year.

Paternity Leave: There are no legal provisions for paternity leave.

Family Leave: Additional leave may be granted at the employer’s discretion, including:

• Adoption Leave: Employees adopting a child under 10 years may receive paid leave based on their salary.
• Childcare Leave: Parents are eligible for childcare leave with a minimum salary, structured as follows:
• 3 days for up to two children under 14 years.
• 6 days for three or more children under 14 years.
• Parents of disabled children can take one extra day off per month until the child turns 18.

Public Holidays: Ghana observes 13 national public holidays, which are fully paid.

Bereavement Leave: Employees may take paid compassionate leave, although the law does not mandate a specific number of days.

STATUTORY EMPLOYEE BENEFITS

Unemployment: There are no legal provisions for unemployment insurance or benefits.

Workers’ Compensation: Under the Workmen’s Compensation Act of 1987, employers must provide compensation for workplace injuries, regardless of fault. The law applies to all salaried workers except for outworkers, tributaries, and certain family members living with the employer.

Social Security: Ghana’s social security system is divided into three tiers:

Mandatory Contributions (Tier 1 & Tier 2)

• Employee Contribution: 5.5% of basic salary
• Employer Contribution: 13% of basic salary
• Total Contribution: 18.5% of basic salary
• Tier 1: 13.5% remitted to SSNIT within 14 days after the month ends, with 2.5% allocated to NHIA for health insurance.
• Tier 2: 5% allocated to an occupational scheme managed by NPRA-approved trustees.

Voluntary Contributions (Tier 3)

• No contribution limits.
• Contributions up to 16.5% are tax-exempt if paid to an approved fund manager.
• Contributions exceeding 16.5% are taxable.

Retirement Benefits

• Workers qualify for full pension benefits at age 60 (or 55 for hazardous jobs) with at least 15 years (180 months) of contributions.
• Early pension is available from age 55 with 15 years of contributions.
• Pensions are calculated based on the average earnings from the best three years of an employee’s career.

Expatriates

• Foreign employees must contribute to the national social security scheme unless exempt.
• Those in the upstream petroleum sector are not required to participate in Ghanaian social security programs.

Contribution limits for 2024:

• Minimum Insurable Earnings: GHS 490.05
• Maximum Insurable Earnings: GHS 52,000

SSNIT Benefits

• Old Age Pension
• Invalidity Pension
• Survivor’s Lump Sum
• Emigration Benefit

PRIVATE EMPLOYEE BENEFITS

Compensation & Insurance

• Private workers’ compensation plans are available.
• Private healthcare, retirement, and life insurance options exist for employees and employers.

PERSONAL INCOME TAX

Tax Year & Rates: The tax year runs from January 1 to December 31. Residents pay tax on a progressive scale:

Non-residents are taxed at a flat rate of 25%.

Double Taxation Agreements: Ghana has treaties to prevent double taxation.

Taxation Method: Taxes are deducted progressively based on annual earnings.

Residency for Tax Purposes
A person is a tax resident if they:

• Are a Ghanaian citizen present in the country for 183 days or more within any 12-month period.
• Are a government employee assigned abroad.
• Have a permanent home in Ghana and have been outside the country for less than 365 days.

PAYROLL & DEDUCTIONS

Income Components

• Salaries, bonuses, overtime, allowances, and benefits.
• Taxable benefits include transport and housing allowances.
• 13th-month bonuses are not mandatory but are taxed at 5%-15% if paid.

Exempt Income

• Salaries of the President.
• Government-related income.
• Pensions and life insurance proceeds.
• Certain dividends and interest payments.

Investment Income Tax

• Residents and non-residents are subject to an 8% withholding tax on dividends.
• Non-residents may be subject to double taxation treaties.

Deductions & Allowances
Employees can claim tax reliefs for:

• Spouse or at least two dependents: GHS 1,200
• Disabled individuals: 25% of assessable income
• Seniors (60+ years): GHS 1,500
• Child education (max 3 dependents): GHS 600 per child
• Aged dependents (max 2 dependents): GHS 1,000 per dependent
• Professional training costs: Up to GHS 2,000

Employer Contributions & Payroll Taxes

• No additional payroll taxes beyond mandatory social security contributions.

Tax Administration

• Employers must file monthly PAYE returns within 15 days after month-end.
• Annual tax returns for employees are due by March 31 of the following year.
• Companies must pay corporate income tax in quarterly installments.