Hiring in Ghana: A Comprehensive Guide for US-Based Companies

Ghana stands out as a dynamic hub in West Africa’s talent market, offering a growing pool of skilled professionals across sectors like technology, finance, healthcare, and agriculture. Its strong English proficiency, stable political environment, and strategic location make it an attractive destination for international hiring. 

For US-based companies, Ghana provides access to cost-effective, high-quality talent and a business-friendly environment, making it a prime choice for global expansion.

Key benefits for foreign companies hiring in Ghana include:

• Access to a well-educated, English-speaking workforce.
• Competitive labor costs compared to Western markets.
• Supportive government policies and incentives for foreign investment.
• Strategic access to the broader Economic Community of West African States (ECOWAS) region.

How to Hire Employees in Ghana

Assess Your Hiring Needs

Before entering the Ghanaian market, clarify your hiring objectives:

• Full-time vs. project-based support: Decide if you need permanent staff or temporary/project-based workers. Permanent roles suit long-term growth, while project-based hiring offers flexibility.
• Local compliance requirements: Ghana’s labor laws require strict adherence to employment contracts, statutory benefits, and payroll obligations. Ensure you understand these to avoid legal pitfalls.
• Onboarding speed vs. long-term control: If speed is crucial, consider solutions that allow rapid onboarding. For greater control and presence, a local entity may be preferable.

Hiring Options in Ghana

You have two main routes for hiring:

• Set Up a Legal Entity: Establish a local subsidiary or branch. This option gives you full control but involves significant setup time, costs, and ongoing compliance obligations.
• Partner with an Employer of Record (EOR): An EOR acts as the legal employer, handling payroll, compliance, and HR administration. This allows you to hire quickly without establishing a local entity.

EOR vs. Legal Entity: Side-by-Side Comparison

Feature	Employer of Record (EOR)	Setting Up a Legal Entity
Setup Time	Days to weeks	Several months
Upfront Costs	Low	High (legal, registration, office)
Compliance Responsibility	EOR handles all compliance	Your company is fully responsible
Payroll & Tax Administration	Managed by EOR	Managed internally or via local vendor
Hiring & Onboarding Speed	Fast	Slower
Long-Term Control	Limited	Full
Suitable For	Quick market entry, testing new markets	Large, long-term operations

Ready to simplify hiring in Ghana? Explore how an EOR can help your business expand globally.

Understanding Worker Classification

Employees vs. Contractors in Ghana

Correctly classifying your workers is crucial for compliance. Here’s how the two types differ:

Aspect	Employee	Contractor (Consultant/Freelancer)
Legal Relationship	Direct employment, covered by Labor Act	Independent, contract-based
Payroll & Tax	Employer withholds taxes, pays benefits	Contractor handles own taxes, no benefits
Social Security	Employer and employee must contribute	Not required (unless specified by contract)
Control & Supervision	Employer sets hours, tasks, processes	Contractor controls how work is done
Termination	Subject to notice, legal protections	As per contract terms

Legal Implications and Risks of Misclassification

Misclassifying employees as contractors can lead to:

• Fines up to GHS 12,000 and potential imprisonment.
• Back payment of taxes, social security, and statutory benefits.
• Legal disputes and reputational damage.

Ghana’s Labor Act requires strict adherence to employment definitions. If you control work hours, provide tools, and integrate the worker into your organization, they are likely an employee under the law.

For more  insights into global worker classification, check out W-2 and 1099 forms: Differences, Usage, and Classification Regulations.

Hiring Costs and Payroll

Hiring Costs Overview

When hiring in Ghana, consider:

• Salaries and wages: Competitive by local standards, lower than in many Western markets.
• Social security contributions: Employers contribute 13% of salary to SSNIT; employees contribute 5.5%.
• Benefits: Statutory benefits include paid leave, maternity/paternity leave, and health insurance.
• Recruitment and training: Costs for advertising, interviews, and onboarding.
• Compliance and statutory obligations: Legal, tax, and permit fees.

Payroll Setup Steps

1. Register your business or partner with an EOR.
2. Register employees with SSNIT and the Ghana Revenue Authority (GRA).
3. Establish salary structures and benefit plans.
4. Set up payroll processing (monthly, with cut-off around the 10th).
5. Ensure timely remittance of taxes and social security contributions.

Income Tax Rates

• Progressive tax system: Ranges from 0% to 35%, depending on income bracket.
• Pay-As-You-Earn (PAYE): Employers deduct and remit income tax monthly.
• Corporate tax: Standard rate is 25%.

Payment Methods

• Direct deposit into local bank accounts.
• Bank transfers for both local and international payments.
• EOR payroll: EOR partners handle all payments and statutory deductions.

Using Global Payroll Services

Global payroll providers or EORs streamline compliance, automate tax calculations, and ensure timely payments. This reduces risk and administrative burden, especially for companies without a local presence.

Discover how Tarmack can streamline your global payroll and compliance in Ghana and beyond. Learn more here.

How to Properly Hire and Pay Contractors

• Draft a clear consultancy contract outlining scope, deliverables, fees, and termination terms.
• No statutory benefits or payroll taxes required, but clarify tax obligations in the contract.
• Pay via direct transfer or through global contractor payment platforms.
• Retain documentation for compliance and audit purposes.

Explore the Best Ways to Pay International Independent Contractors.

Compliance Risks

Incorrect Payroll Contributions

Failing to remit taxes or SSNIT contributions can result in:

• Heavy fines (up to GHS 12,000).
• Legal proceedings and possible imprisonment.
• Back payment obligations and interest.

Permanent Establishment Risk

Operating in Ghana without proper registration or through misclassified contractors can trigger permanent establishment, exposing your company to local corporate tax liabilities.

Statutory Benefits

Employers must provide:

• Paid annual leave (15-30 days).
• Maternity leave (12 weeks, proposed to increase to 14).
• Paternity leave (pending legislation: 5 days).
• Overtime pay and paid public holidays.

Misclassification Risks

Misclassifying employees as contractors can lead to:

• Retroactive payment of benefits and taxes.
• Legal disputes and reputational harm.
• Loss of business licenses or permits.

Provincial/Regional Law Variances

Ghana’s labor laws are national, with minimal regional variation. However, always check for local bylaws or sector-specific agreements.

Overview of Intellectual Property Rights

Employers should address:

• Copyright: Protects original works created by employees. Typically, IP created in the course of employment belongs to the employer.
• Patents and trademarks: Secure rights for inventions and branding.
• Confidentiality: Use NDAs to safeguard sensitive information.

Learn more about Managing Intellectual Property (IP) Through EOR: Key Considerations.

Onboarding Process

Before Their First Day

• Prepare employment contracts as per Ghana’s Labor Act.
• Register employees with SSNIT and GRA.
• Set up payroll and benefits.
• Arrange workstations, equipment, and system access.

On Day 1

• Welcome the employee and provide an orientation session.
• Review company history, values, and policies.
• Complete administrative tasks (paperwork, ID cards, bank details).
• Introduce to the team and assign a mentor or buddy.

During Their First 90 Days

• Provide training (technical, compliance, soft skills).
• Set clear performance expectations and goals.
• Schedule regular check-ins and feedback sessions.
• Monitor progress and address any concerns.

Offer Letter Essentials

• Job title and description.
• Start date and probation period (if any).
• Salary, benefits, and leave entitlements.
• Notice period and termination conditions.

NDAs and Confidentiality

• Use NDAs to protect company information and IP.
• Clearly outline confidentiality obligations in contracts.

Running Background Checks

• Verify education, employment history, and references.
• For sensitive roles, consider criminal background checks.
• Always obtain candidate consent before conducting checks.

Check out the Top Eight Best Practices for Onboarding International Employees.

Remote Employee Management

Managing remote teams in Ghana requires:

• Computer and app access: Provide secure laptops, software, and VPNs. Set up user accounts and permissions.
• IP protection: Use NDAs, clear IP assignment clauses, and secure digital workflows.
• Performance management: Set clear deliverables, use project management tools, and maintain regular communication.
• Cultural integration: Foster inclusion with virtual team-building and regular feedback.

For actionable tips, read How to Manage Employees Remotely and Globally.

Labor Law Compliance

Key Working Condition Requirements

• Working hours: 8 hours per day, 40 hours per week.
• Overtime: Paid at statutory rates; restrictions for mothers with young children.
• Leave: Annual leave (15-30 days), maternity (12 weeks, pending increase), paternity (pending), public holidays.
• Health and safety: Employers must provide a safe workplace.

Working Conditions by Employment Type

• Permanent employees: Full statutory benefits and protections.
• Fixed-term/Project-based: Benefits as per contract, but must meet minimum legal standards.
• Contractors: No statutory benefits, but contracts must comply with commercial law.

No At-Will Employment

Ghana does not recognize at-will employment. Termination must follow notice periods and just cause, as outlined in the Labor Act.

Trade Unions and Collective Bargaining

Employees have the right to join trade unions and engage in collective bargaining for better terms and conditions.

Termination Guidelines

Acceptable Termination Reasons

• Redundancy: Due to restructuring or economic reasons.
• Performance: After documented poor performance and following due process.
• Misconduct: For serious breaches, with proper investigation.
• Mutual agreement: Both parties consent to end the employment.

Termination must comply with the Labor Act, including notice periods and documentation. Unfair dismissal is prohibited.

Notice Periods and Legal Protections

• Minimum notice: 14 days, increasing with length of service.
• Salary during notice: Employees continue to receive pay during the notice period.
• Severance: No statutory requirement, but redundancy may require negotiation.
• Legal protections: Employees can appeal unfair dismissal through labor courts.

Learn more:  Severance Regulations Across Countries.

Benefits of Hiring in Ghana

• Skilled, English-speaking workforce with strong education and technical skills.
• Cost efficiency due to lower salary and benefit costs compared to Western markets.
• Time zone overlap with Europe and partial overlap with US EST, aiding collaboration.
• Modern infrastructure in major cities (Accra, Kumasi) supports remote and onsite work.
• Government incentives for foreign investment and business-friendly policies.
• Stable political environment and strong legal protections for employers.
• Access to the ECOWAS market for regional expansion.

Make Ghana the Next Frontier for Global Hiring

Hiring in Ghana offers US-based companies a strategic advantage: access to a skilled, English-speaking workforce, cost-effective operations, and a supportive business environment. By understanding local labor laws, choosing the right hiring model, and ensuring compliance, you can build a successful team in Ghana while minimizing risk and maximizing growth potential.

Take the next step in your global expansion. See how Tarmack’s EOR solutions can help you hire and manage talent in Ghana and over 150 countries.