Employment Laws in Ghana

Contractual Agreements in Ghana

Having proper and legally sound employment contracts and data processing agreements is important to safeguard your business and your workers. Employment contracts stipulate the terms of the employment relationship, the duties, and entitlements of the two parties.

Types of employment contracts in Ghana

You can frame your employment agreements based on the following types of contracts: 

• Permanent Contracts: Ideal for permanent staff with no expiry date. They come with advantages like paid annual leave, social security, and compensation in case of redundancy.
• Fixed-Term Contracts: Suitable for contract or project employment. The contract is usually set for a beginning and ending date.
• Part-Time Contracts: Suitable for workers working shorter hours than the full-time equivalent with commensurate benefits.
• Probationary Contracts: Typically employed to try an employee out for a period of up to six months to see if they are suitable for the job.
• Casual or Seasonal Contracts: For temporary work, commonly in businesses with variable demand. 

Obligations and rights for both parties in Ghana

Furthermore, you are liable to:

• Ensure a safe working environment.
• Timely payment of wages.
• Provide statutory benefits such as paid leave and social security.
• Compliance with labor laws for working hours, overtime, and termination.
• Maintain open communication on workplace policy and expectations.

Furthermore, you can ask your employees to execute duties according to the contract:

• Comply with workplace rules and regulations.
• Exercise the right of confidentiality and safeguard company property. 

Working Hours and Overtime in Ghana

Under the Labour Act 2003 (Act 651), you must ensure your employees work no more than statutory limits and get fair compensation for anything beyond that is considered overtime.

Regular working hours in Ghana

• You are required to ensure that your employees work no more than 8 hours a day or 40 hours a week.
• They ought to be given at least 12 hours of unbroken rest between shifts and 48 consecutive hours off every seven days per Ghana working hours law.

Overtime regulations and compensation in Ghana

• You may need to use overtime in rare instances, such as emergencies or business-critical situations.
• Ghana employment law allows you to determine your overtime policy. Still, in most instances, overtime is usually 1.5 times the hourly rate on normal working days and 2 times the hourly rate on weekends. 

Working hours in Ghana and overtime conditions must be clearly stated in your collective agreements or employment contracts to prevent disputes. Otherwise, employees are not obliged to work overtime.

Minimum Wage and Compensation in Ghana

It's important to remain updated about the minimum wage and compensation laws in Ghana to maintain compliance and provide a fair environment. The following is an overview of the main points:

Ghana’s minimum wage rate in 2025

• All employee salaries in Ghana are paid in Ghanaian Cedi (GHS).
• The current minimum wage in Ghana is GHS 490 per month. To comply with labor laws, ensure full-time employees receive at least this amount. 

VAT (Value Added Tax)

If a business sells taxable products or services, note that your entire invoice is subject to a 15% VAT. This should be incorporated into your pricing strategy and compliance model.

By staying current with these laws and planning, you will be better able to remain compliant and easily manage payroll for your Ghanaian staff.

Factors affecting wage determination in Ghana

The average annual employer cost is around 15.50% of the employee's yearly salary. For example, on an annual salary of USD 60,000, the total employer cost would be approximately USD 9,300. 

Since employees are liable to progressive income tax between 0% and 35%, depending on their income, you must deduct and pay this tax to the Ghana Revenue Authority.

Apart from salaries and taxes, there could also be other costs, like contributions to employees' welfare schemes or statutory deductions. Although employee benefits in Ghana do not enforce severance accruals, it’s recommended to include a clear severance policy regularly.

Furthermore, contractor payments and invoicing are subject to a 15% VAT. This should be incorporated into your compliance model. 

Nonetheless, your actual cost may differ based on benefits provided under Ghana labor law, such as social security taxes and other local variables. For a precise estimate, you can utilize the Skuad Cost Calculator.

Employee Benefits and Social Security in Ghana

By remaining compliant with the employment laws of Ghana and providing competitive benefits, you can maintain a productive and happy workforce while making your company an employer of choice in Ghana.

Statutory benefits in Ghana

Here are statutory benefits per employment laws in Ghana: 

• You must contribute to the Social Security and National Insurance Trust (SSNIT) and the Pension Scheme to secure your financial future. 
• You are also liable to give maternity, annual, and sick leave where the situation arises. 
• Your employees are also entitled to paid time off on designated public holidays, and they should be paid extra for working during such holidays. 
• Regarding redundancy, you must follow labor law in Ghana on severance pay per legal guidelines. 

Additional perks and benefits in Ghana

Though not obligatory under laws in Ghana, you can extend additional perks and benefits to increase employee satisfaction and efficiency. Some typical extra benefits are:

• Private medical insurance provides workers access to healthcare and the national health scheme. 
• Assisting them with a transport allowance for work-related commuting or fueling expenses reduces their daily transportation hassles.
• You may also provide meal allowances through subsidized meals or meal vouchers and a housing allowance or accommodation support to help with their living expenses. 
• Individual or company achievement-based performance bonuses will increase motivation and productivity.
• Professional development through paying for training courses, certifications, or skills development programs improves your workforce's ability. 
• Wellness programs, including gym membership or counseling services, enhance the employee's overall well-being.
• Flexible work arrangements, like telecommuting or flexible working hours, provide employees with improved work-life balance. 
• Offering extra parental leave above statutory maternity pay can also help working parents.
• Finally, providing retirement benefits, like contribution matching or improved pension schemes, provides long-term financial security for your employees.

Social security contributions and requirements in Ghana

You must provide the following social security benefits per employment laws in Ghana:

• You must contribute 13%, and employees pay 5.5% of their basic salary towards premiums to cover pensions, invalidity benefits, and survivor's benefits managed by Social Security and National Insurance Trust (SSNIT).
• You must enroll your employees for public health insurance under the National Health Insurance Scheme (NHIS).

Vacations and Paid Time Off in Ghana

Knowing the various types of paid & unpaid leave allows you to juggle employee well-being within the legal parameters of Ghana employment:

Annual leave entitlement in Ghana

• In Ghana, workers are entitled to annual leave after a year of service. 
• Ghana labor law on annual leave must be given for a minimum of 15 days where they can rest and rejuvenate. 
• You cannot substitute this leave with payment unless the employee's contract ends before they exhaust their annual leave in Ghana. 

Public holidays and special leaves in Ghana

• Employees have the right to paid leave on 13 Ghana public holidays:
  • New Year's Day: January 1
  • Constitution Day: January 7
  • Independence Day: March 6
  • Good Friday: April 18
  • Easter Monday: April 21
  • May Day (Labor Day): May 1
  • Republic Day: July 1
  • Founders' Day: August 4
  • Kwame Nkrumah Memorial Day: September 22
  • Farmers' Day: First Friday of December
  • Christmas Day: December 25
  • Boxing Day: December 26
  • Eid al-Fitr: (Date varies based on the Islamic calendar)
  • Eid al-Adha: (Date varies based on the Islamic calendar)

• If your workers are required to work on these days, they have the right to additional remuneration, usually in the form of overtime pay or an alternative day off.
• You will also be required to grant extra leave in certain circumstances. These include:
  • Sick Leave: Awarded upon production of a certified medical report.
  • Maternity Leave: 12 weeks of paid leave given to female workers, with the option of extension in case of complications.
  • Paternity Leave: This is not obligatory, but some employers provide this as an extra benefit.
  • Bereavement Leave: Usually allowed for the death of an immediate family member but not obligatory.‍
  • Unpaid Leave: There is no statutory provision for unpaid leave for personal purposes, and it depends on your employment policy in Ghana.

Termination and Severance in Ghana

Managing employee dismissals is done with caution to keep within the ambit of employment laws in Ghana and escape legal repercussions. Let’s discuss the finer nuances of Ghana labor law on termination of employment:

Grounds for employee termination in Ghana

You are legally entitled to terminate an employee's contract in the following situations:

• When an employee chooses to leave voluntarily.
• When both sides mutually agree to terminate the employment relationship.
• You can dismiss an employee under probation without involving lengthy legal procedures.

Notice period in Ghana

• In most instances, you must give a notice period before terminating. 
• The standard notice period is between one week and one month, depending on the terms of the employee's contract and the extent of their service. 

Severance pay in Ghana

• Unlike in certain nations, there is no prescribed formula on how to calculate severance pay in Ghana. 
• It is usually at your discretion to negotiate with the employee.

Discrimination and Equal Opportunity in Ghana

Promoting an equitable and diverse workplace is not just good for your company culture but also required by the constitution of Ghana:

Prohibitions against workplace discrimination in Ghana

You are legally forbidden to discriminate against workers based on the following:

• Gender
• Race
• Ethnicity
• Religion
• Disability
• Marital Status
• Political Affiliation
• Pregnancy

To ensure compliance and create a respectful workplace, consider the following:

• Enact clear anti-discrimination policies.
• Regular training on diversity and inclusion should be conducted for managers and employees.
• Provide equal pay for equal work.
• Create an open system for reporting and resolving complaints.
• Provide reasonable accommodations for employees with disabilities.

Alternatively, you can rely on employer-of-record solutions to legally outsource best practices for employment in Ghana.

Health and Safety Regulations in Ghana

It is a legal and moral obligation to ensure the health and safety of your workers. You can do so by the following best practices: 

• Keep the workplace safe from hazards and ensure good ventilation, lighting, and sanitation.
• Continuously identify and minimize workplace risks.
• Provide the right personal protective equipment (PPE) to employees who face risks.
• Provide training programs that make sure employees are aware of workplace safety measures.
• Create proper evacuation plans, first aid stations, and emergency response mechanisms.
• Offer medical treatment in the event of workplace injury.

Stay Compliant in Ghana with Skuad

Dealing with employment laws in Ghana can be intricate because the legislation is evolving, and compliance requirements are dynamic. For instance, there are no statutory provisions for leaves or annual bonuses. With Skuad, you can make it easy. 

Skuad's Employer of Record (EOR) platform allows you to create and support distributed teams in 160+ countries, including Ghana, without establishing a local entity. Skuad handles payroll, tax, and benefits management, as well as local labor law compliance.

Partner with Skuad to grow your global workforce confidently and stay completely compliant. Book a demo today to better understand its use cases.

FAQs

What are the employment regulations in Ghana?

Ghana's employment laws are mainly enacted through the Labour Act 2003 (Act 651). Some of the most important laws include working hours, overtime, remuneration, leave entitlements, termination, and occupational safety. 

What are the major employment laws in Ghana?

The main Ghanaian employment legislation encompasses the Labour Act 2003 (Act 651), which regulates employment contracts, salaries, working hours, leave days, and dismissal procedures. The Constitution of Ghana, 1992, provides basic labor rights, such as anti-discrimination and decent working conditions.

What is the basic salary in Ghana?

Ghana's basic pay is regulated by the country's national daily minimum wage, which is GHS 18.15, which translates to approximately 1.28 USD. 

What are the labor laws for resignation in Ghana?

Ghana's labor laws also regulate resignation. Employees can give written notice to the employer to resign, and the notice period required usually ranges from one week to one month, as agreed in the employment contract. 

What are the working conditions in Ghana?

Employees work a standard week of 40 to 48 hours with opportunities for overtime compensation. The legislation requires a safe and healthy workplace, and employers must enact the required safety controls. Employees are also entitled to paid time off, such as annual, sick, and maternity leave. 

Is severance pay mandatory in Ghana?

Ghana's Labour Act does not prescribe a formula for severance pay. Therefore, workers dismissed for redundancy are subject to negotiations between the employer and the employee or their union.