Laws and Policies in Ghana

Employment Contracts in Ghana

Employment relationships are governed by the Labour Act, 2003 (Act 651) and related regulations.

Contract Requirements

• Employment contracts can be written or oral, but written contracts are strongly recommended and standard for professional roles.
• A written contract should include:
  • Employer and employee details
  • Job title & duties
  • Work location
  • Salary and payment schedule
  • Working hours and overtime rules
  • Leave entitlements
  • Probation terms (if any)
  • Notice period & termination conditions
• Contracts should be in English, as it is the official working language.

Types of Contracts

• Permanent/indefinite-term contracts
• Fixed-term contracts (for a specific duration or project)
• Casual and temporary contracts (short-term or irregular work)

Probation Period

• Not fixed by law, but commonly 3–6 months, to be clearly stated in the contract.

An EOR ensures that contracts satisfy Ghanaian labour law and clearly define rights, obligations, and benefits.

---

Working Hours in Ghana

• Standard workweek: commonly 40–48 hours, depending on sector and contract.
• Typical schedule: 8 hours per day, 5 or 6 days per week.

Overtime

• Overtime must be mutually agreed and compensated at a premium rate, usually higher than the normal hourly wage (e.g., 1.5x or 2x, depending on company policy/industry practice).
• Work on rest days or public holidays is generally paid at a higher rate or compensated with time off.

Rest & Breaks

• Employees are entitled to daily rest and at least 24 consecutive hours of rest each week (usually Sunday).
• Meal and rest breaks during the day are normally defined by company policy or collective agreements.

---

Employee Leave in Ghana

Annual Leave

Under Act 651, employees are entitled to:

• At least 15 working days of paid annual leave after 12 months of continuous service (some employers offer more, e.g., 20 days for senior staff).

Annual leave cannot be substituted with cash except on termination.

Sick Leave

• Employees are entitled to sick leave with pay, subject to providing a medical certificate from a recognized medical practitioner.
• The length and pay conditions are often governed by company policies, contracts, or collective agreements. Many employers pay full salary for a defined period.

Maternity Leave

• 12 weeks (84 days) of maternity leave, with at least 6 weeks compulsory post-delivery.
• Maternity leave is extended in case of multiple births or complications.
• During maternity leave, the employee is generally entitled to full pay (subject to social security and employer obligations).
• Pregnant employees are protected from unfair termination related to pregnancy.

Paternity Leave

• Not expressly detailed in the Labour Act, but some employers (especially multinationals) grant 3–7 days of paternity leave as a company policy.

Public Holidays

Ghana observes multiple paid public holidays, including:

• New Year’s Day
• Independence Day
• Labour Day
• Republic Day
• Christmas & Boxing Day
• Religious holidays (Eid, Good Friday, Easter Monday, etc.)

Employees working on public holidays are normally entitled to extra pay or time off in lieu.

---

Employee Benefits in Ghana

Statutory Benefits

The key statutory benefit system is the Social Security & National Insurance Trust (SSNIT).

Social Security Contributions (Tier 1 & Tier 2)

On basic salary:

• Employer: 13%
• Employee: 5.5%

Total: 18.5%, remitted to SSNIT and mandatory occupational pension schemes.

These contributions fund:

• Old-age pension
• Invalidity benefits
• Survivor’s benefits

Employees may also participate in Voluntary (Tier 3) pension schemes, often supported by employers for senior staff.

Other Statutory Protections

• Paid annual leave
• Maternity protections
• Occupational health & safety standards
• Protection against unfair dismissal

Common Additional Benefits

To attract and retain talent, many employers provide:

• Private medical insurance (top-up over public system)
• Transport allowance or company car
• Housing allowance / accommodation support
• Meal allowance or canteen
• Performance bonuses and 13th-month pay
• Mobile phone & data allowance
• Training and professional development

An EOR helps you structure a competitive, compliant benefits package for Ghanaian employees.

---

Payroll & Tax in Ghana

Payroll Currency

• Salaries are usually paid in Ghanaian Cedi (GHS).
• Expatriates may have benchmark packages noted in foreign currency but paid locally in GHS (or a split arrangement where permitted).

Payroll Frequency

• Typically monthly, paid at month-end.

Personal Income Tax

Ghana applies a progressive Pay-As-You-Earn (PAYE) system on employment income, with tax bands increasing by income level (from 0% up to a top marginal rate – historically around 30–35%).

Employers must:

• Calculate PAYE based on Ghana Revenue Authority (GRA) tax tables
• Deduct PAYE from employees’ salaries
• Remit taxes to GRA by statutory deadlines

Employer Payroll Duties

• Register as an employer with GRA and SSNIT (the EOR handles this).
• Withhold income tax and employee SSNIT portions.
• Pay employer SSNIT contributions.
• File monthly PAYE and SSNIT returns.
• Maintain payroll records and provide payslips.

Your EOR in Ghana manages all payroll calculations, filings, and statutory remittances so you stay compliant.

---

Employment Laws & Compliance in Ghana

Key legislation and principles:

• Labour Act, 2003 (Act 651)
• National Pensions Act
• Occupational safety and health regulations
• Trade unions and collective bargaining provisions

Termination Rules

Termination must follow the rules in Act 651 and the contract.

Common grounds:

• Redundancy / restructuring
• Incompetence or misconduct (with due process)
• Long-term ill health
• Mutual agreement

Notice Periods

• Often 2 weeks to 1 month, depending on contract, seniority, and how salary is paid (daily, weekly, monthly).
• Contracts and collective agreements may provide longer notice.

Severance / Redundancy Pay

• Required in cases of redundancy; terms may be defined by law, collective agreements, or internal policy.
• For misconduct or just cause, severance may not be payable.

Unfair termination can lead to compensation orders, reinstatement, or other remedies via the Labour Commission or courts.

Non-Discrimination & Equality

Employers must avoid discrimination based on:

• Gender
• Ethnicity or race
• Religion
• Political opinion
• Disability
• Other protected characteristics

Sexual harassment and exploitation are prohibited, and employees have rights to join unions and engage in collective bargaining.