EOR in Ghana

As your Employer of Record (EOR) in Angola, we facilitate your expansion by hiring employees and managing their payroll without the need to establish a local entity ensuring full compliance with local labour laws.

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Overview of Ghana

Ghana is a country located in West Africa, with a population of approximately 31 million people. The country has a growing economy, with a GDP of $77.2 billion in 2021, with a projected growth rate of 4.6%.

Ghana is considered to be one of the most stable and democratic countries in Africa, with a pro-business environment that has attracted foreign investment.

The workforce in Ghana is estimated to be around 14 million, with the majority of the population engaged in the informal sector. According to the World Bank’s Ease of Doing Business report, Ghana ranks 118th out of 190 economies globally, with improvements in areas such as starting a business and getting electricity but still facing challenges in areas such as enforcing contracts and resolving insolvency.

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Employer of Record Service in Ghana

working hours

Normal Working Hours

Maximum 45 hours per week (excluding overtime).
Maximum 9 hours per day (if working 5 days or fewer per week).
Maximum 8 hours per day (if working more than 5 days per week).
By agreement, working hours can extend up to 15 minutes per day, but not more than 60 minutes per week for public-facing duties

Overtime

Work beyond 9 hours per day (8 hours if working more than 5 days per week) or 45 hours per week is overtime.
Employees cannot work more than 10 hours of overtime per week or 3 hours per day without an agreement.
Overtime pay: at least 1.5 times regular wage.
Compensatory rest period options:
Pay ordinary wage and provide 30 minutes of paid time off per overtime hour.
Provide 90 minutes of paid time off per overtime hour within one month (extendable to 12 months by agreement).
Overtime agreements expire after one year.

Averaging of Hours

Ordinary working hours and overtime can be averaged over up to four months.
Average must not exceed 45 ordinary hours per week and 5 hours of overtime per week.
Collective agreements expire after 12 months.

Work on Rest Days

Compensation: at least double the wage for work on Sunday, unless it’s a regular workday (then 1.5 times the wage).
If work on Sunday is less than the ordinary shift, employees must receive their ordinary daily wage.
Hours worked on Sunday do not count towards ordinary working hours but do count towards maximum overtime limits.
Compensatory rest for Sunday work can be provided instead of cash payment.

Sunday Work

Employees will receive double their regular wage for Sunday work. If Sunday is a regular workday, the wage will be 1.5 times the regular rate.
Work hours on Sunday do not count towards ordinary hours but do count towards maximum overtime limits.
Entire shift is considered Sunday work unless most of it is on another day.

Compressed Working Week

Written agreements may allow up to 12 hours of work per day without overtime pay.
They cannot exceed 45 ordinary hours per week, 10 hours of overtime per week, or 5 days of work per week.

Reduction of Work Hours

Employers and employees can agree to reduce normal working hours to a maximum of 40 hours per week and 8 hours per day through collective bargaining.

Breaks

Employees working more than 5 hours are entitled to a 1-hour unpaid meal break.
Employees required to work during meal breaks must be compensated.
Meal breaks can be reduced to 30 minutes by written agreement for employees working less than six hours per day.

Night Work

Defined as work performed between 6 pm and 6 am.
Requires written agreement and must be compensated with a shift allowance or reduced hours.
Employers must provide transportation.
Regular night work (more than 1 hour between 11 pm and 6 am at least five times a month or 50 times a year) requires:
Informing employees of health and safety risks.
Offering medical examinations.
Transferring employees to day work if health issues arise.

Rest Periods

Daily rest: at least 12 consecutive hours between shifts (can be reduced to 10 hours by written agreement).
Weekly rest: at least 36 consecutive hours, including Sunday unless otherwise agreed.
Written agreements can provide:
At least 60 consecutive hours every two weeks.
Reduced weekly rest by up to eight hours with equivalent extension the following week.

Breastfeeding Breaks

Employees who are breastfeeding are entitled to two 30-minute breaks per workday for the first six months after childbirth.

Leave Days and Benefits in South Africa

Annual leave

Every employee is entitled to 21 consecutive leave days in every leave cycle i.e 12 months.
Annual leave is accrued – meaning that the number of days to which the employee is entitled starts at zero and increases with the passage of time as the leave cycle progresses.

Sick Leave

There is no provision under employment law for sick leave entitlements. However, if an employee takes sick leave, it should be certified by a medical professional. Sick leave is not counted in the employee’s annual leave entitlement.

Maternity Leave

Female employees are entitled to 12 weeks of maternity leave, which is extendable by two weeks in case of complications or multiple births. Once the employee returns to work after maternity leave, she is entitled to 60 minutes of nursing time daily until the child turns one year old.

Paternity Leave

There is currently no provision for paternity leave in Ghana. However, Ghana is working on mandating paternity leave for up to five days.

Accrued Leave at Termination

If an employee’s contract is terminated, they are entitled to any accrued annual leave pay, remuneration earned before termination, deferred payment of the employee that is due, and any outstanding compensation.

Taxes and Deduction in South Africa

Annual leave

Every employee is entitled to 21 consecutive leave days in every leave cycle i.e 12 months.
Annual leave is accrued – meaning that the number of days to which the employee is entitled starts at zero and increases with the passage of time as the leave cycle progresses.

Taxes and Deduction in South Africa

Personal Income Tax Rates in South Africa

South Africa uses a progressive tax rate system for personal income tax. The country does not have local income taxes. Here is a breakdown of the income brackets and corresponding tax rates:

Income Bracket (ZAR)	Tax Calculation
0 – 237,100	18% of income within this range
237,101 – 370,500	42,678 + 26% above 237,100
370,501 – 512,800	77,362 + 31% above 370,500
512,801 – 673,000	121,475 + 36% above 512,800
673,001 – 857,900	179,147 + 39% above 673,000
857,901 – 1,817,000	251,258 + 41% above 857,900
1,817,001 and above	644,489 + 45% above 1,817,000

Statutory deduction in South Africa

Employment Expenses

Taxpayers can deduct certain business-related expenses from their income taxes. These expenses include travel expenses and entertainment benefits. Allowances provided by employers to cover business expenditures are not taxable if they do not exceed the maximum limit for deductions. Additionally, employees earning income from commissions can deduct home office expenses.

Charitable Contributions

Employees are eligible for a tax deduction if they donate up to 10% of their taxable income to specific public benefit organisations.

Medical Expenses

Workers can receive tax deductions based on their contributions to medical schemes. This deduction comes in the form of a tax rebate at a specific rate.

Retirement Funds

Contributions to retirement, provident, and pension funds provide tax deductions for employees, subject to a specific maximum limit.

Business Deductions

Taxpayers who own or are in a business partnership that has suffered losses can benefit from tax deductions. The authorities will carry forward the assessed loss results to offset any future income earned.

Losses

Taxpayers earning more than ZAR 1,817,000 can benefit from deductions if they suffer yearly losses. If deductible expenses exceed income, the assessed loss is carried over to the next year to be offset against the following year’s taxable income.

Probationary Period

The Ghana Labor Act of 2003 (Act 651) regulates probationary periods in Ghana. According to the act, the probationary period for an employee cannot exceed 6 months. During this period, the employer can terminate the employee’s contract without notice or cause.

Termination with Notice Period

After the probationary period, if the employer wishes to terminate the employee’s contract, they must provide a notice period. The length of the notice period depends on the length of the employee’s service with the company. For employees who have been employed for less than one year, the notice period is one week. For employees who have been employed for more than one year, the notice period is two weeks.

Payment in Lieu of Notice

If the employer terminates the employee’s contract without providing the required notice period, they are required to pay the employee in lieu of notice. The payment should be equal to the wages the employee would have received during the notice period.

Employee’s Right to Terminate

Employees also have the right to terminate their employment contract. If they wish to do so, they must provide the employer with the required notice period. The length of the notice period is the same as that required by the employer.

Unfair Termination

In cases where an employer terminates an employee’s contract unfairly, the employee can seek redress from the National Labor Commission. The commission has the authority to hear and determine disputes related to employment and labor practices.

Flexi- Personnel Employer of
Record Solutions in Ghana

Our team offers a comprehensive suite of employer-of-record solutions that are specifically
designed to help you manage your workforce effortlessly.

Recruitment

As a Professional Employer Organization in Ghana (PEO), our team handles the sourcing, screening, and hiring of top talent based on your specific business needs, so you can find the right people for your team.

Payroll Management

As your Employer of Record Ghana (EOR), our team takes care of all aspects of payroll management, including calculating salaries, processing payments, and ensuring compliance with local laws and regulations.

HR Administration

Flexi-Personnel Employer of Record Ghana (EOR) provides ongoing support and guidance for all HR-related matters, including employee relations.

Onboarding

We manage the onboarding process for your new hires, ensuring that they are fully prepared to join your team and hit the ground running.

Tax Compliance

We handle all tax-related matters, including filing tax returns, obtaining necessary permits and licenses, and managing tax audits so you can focus on running your business.

Employment Regulation in Ghana

The Ghana Labor Act of 2003 (Act 651) is the primary legislation that governs employment specifics in Ghana. This act sets out the basic rights and obligations of both employers and employees in the country. It covers matters such as minimum wage, working hours, rest periods, leave entitlements, and termination of employment.

Work Visas and Permits in Ghana

Temporary Work Permit: This permit is for foreign nationals who will be working in Ghana for a short period, not exceeding six months.

Work Permit: This permit is for foreign nationals who will be working in Ghana for an extended period, exceeding six months.

Indefinite Residence Permit: This permit is for foreign nationals who have been living and working in Ghana for at least five years and wish to stay in the country indefinitely.

If you are looking to expand your business in Ghana, Flexi Personnel Employer of record (EOR) Services is there as your legal employer of your companies workforce.

We provide comprehensive HR management, including payroll processing, tax compliance, benefits administration, and ensuring strict adherence to Ghana labor regulations. Contact us now and we will make your hiring process seamless.