How to Hire Remote Employees In

Ghana

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The Basics

Currency
GHANAIAN Cedi (GHS)
Employer Taxes
16.2%
Payroll Frequency
Monthly
Official Language
English
OVERVIEW

Employment in

Ghana

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors

  • Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
  • Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
  • Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.

Disadvantages of Hiring Independent Contractors

  • Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
  • Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
  • Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
  • Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.
EMPLOYMENT IN
Ghana

Set up a subsidiary in

Ghana

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Ghana can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Ghana, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Ghana.

EMPLOYMENT IN
Ghana

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Hire with Panther

Paying Remote Employees

Paying employees in Ghana is not the same as paying workers in your own country. Employees have to be paid using Ghana’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Ghana

 Specific Information

Working Hours

A regular work week in Ghana is 40 hours, or 8 hours a day.

Overtime

Overtime hours are paid at a rate of 150% of the normal pay rate.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Taxes

Payroll Tax

Employer

16.2% - Employer Contributions
- Employer Contributions

Minimum Wage

As of January 1, 2020, the daily minimum wage in Ghana is 11.82 GHS.

Payroll

Pay Cycle

The payroll cycle in Ghana is monthly, however, it is common for companies to pay their employees every 2 weeks.  Employees must be paid by the last working day of the month, however, it is common for companies to pay employees from the 21st of the month onwards.

13th Salary

There are no provisions in the law regarding 13th salaries.

Leave

Paid Time Off (PTO)

Minimum annual leave in Ghana is 15 working days.   

Public Holidays

There are 13 public holidays in Ghana.  

Sick Days

There are no clear labor laws regarding sick pay, except for that sick leave must be certified by a doctor and is independent of annual leave.

Maternity Leave

Maternity leave is 12 weeks, and in certain cases, this can be extended.  After returning from maternity leave, a woman is entitled to one hour during the workday to nurse until the child reaches the age of one year old.

Paternity Leave

There are no provisions in the law.

Parental Leave

There are no provisions in the law.

Other Leave

None.

Marriage Leave

None.

Bereavement Leave

None.

Termination

Termination Process

In Ghana, either the employee or employer is able to terminate the employment contract at any time.  Termination must be given in writing.

If termination is deemed unfair, the employee can make a claim with the labor court and in some cases, have their employment re-instated.  Reasons for unfair termination include:

  • The employee intends to join a trade union.
  • If the employee is pregnant or is absent due to maternity leave.
  • If the employee is terminated for the reason of race or religion.
  • If the employee is disabled.
  • If the employee is forced to terminate due to inaction of the employer if the employee has lodged multiple harassment complaints.

Notice Period

Notice period in Ghana is as follows:

For a contract of 3 or more years, one months’ notice or one month pay in lieu of notice.

For an employment contract less than three years, two weeks’ notice or two weeks’ pay in lieu of notice.

In the case of a contract from week to week, seven days’ notice.

A contract determinable at will by either party may be terminated at the end of the day without any notice.

It is possible to pay the employee in lieu of notice unless there is an “at will” clause in the employment contract.  

In this case, an employee can be terminated at the end of a working day with no notice.

Severance Pay

In the event of an employee being terminated by the employer, the employer is not obliged to compensate the employee with severance pay.  However, the employer shall pay to the employee.

Any remuneration earned before the termination

Any deferred pay due the employee

Any compensation due the employee

For expatriates- in addition to the above, an expatriate shall be paid expenses and necessaries for the journey and repatriation expenses (including the expenses of their family members).

Probation Period

Probation period is not outlined in the law, except for that it should be reasonable.

In general, probation periods are agreed upon in collective agreements.