Introduction
The purpose of this guide is to provide general information about the statutory requirements as per the labour regulations and common practices on employment in Ghana. The guide tries to explain the different laws and regulations concerning employment and should be taken for reference only.
When in doubt or if further clarification is required, please refer to or contact the relevant Government authority for assistance.
Ghana Labour Regulations
The main sources of labour regulation in Ghana are:
- Labour Act
- Social Security Act
- National Pension Act
- National Health Insurance Act
Labour Act
The Labour Act (2003) is the main legislation that govern the employment of people in Ghana.
- Coverage
The Labour Act covers all employees and workers regardless of their wages or salaries as well as job grades/levels or types of employment, that is, permanent or temporary.
- Employment Contract
All employment for a period of six months or more must have a written employment contract. The contract must contain clearly all the rights and obligations of the parties.
- Hours of Work
Under the Labour Act, the normal working hours must not exceed 8 hours a day or more than 40 hours a week. The daily working hours in a day must not exceed 10 hours and 40 hours a week.
An employee who performs overtime work after the normal working hours must be paid a fixed rate of pay for overtime work.
Every employee must be entitled to at least a 30 minutes’ break in the 8 hours of work and the 30 minutes’ break will form part of the normal working hours.
An employee must be granted a daily continuous rest of at least 12 hours between two consecutive working days.
- Rest Day and Public Holidays
All employees must be given at least 2 rest days (48 hours) for every seven days of normal working hours preferably a Saturday and Sunday.
Employees are entitled to paid public holidays in Ghana. When a public holiday falls on a rest day, employees shall be entitled to the next day off in compensation thereof.
- Overtime
There is no mentioned in the Act on the fixed rate for overtime work on the different occasions.
- Leaves
Annual Leave
Employees who have completed 12 months of consecutive service with an employer are entitled to the following days of annual leave.
| Type of Working Condition | Number of Days |
| Normal working conditions | 15 |
The employee is entitled to take all the full 15 days without interruption if he/she give advance notice of 30 days before the commencement of the leave. The employee must be allowed to take his/her annual leave in two parts.
Sick Leave
Employees are entitled to sick leave if they must produce a medical certificate issued by a medical practitioner or doctor. The Act is silent on the maximum number of days of sick leave that an employee is entitled to.
Maternity Leave
All female employees are entitled to 12 weeks paid maternity leave regardless of her length of service with the employer. A female employee who experienced abnormal birth or gives birth to twin or multiple births is entitled to additional 2 weeks of maternity leave.
- Termination
Both parties may terminate the employment contract by giving the following required notice to the other party:
| Type of Employment Contract | Notice Period |
| Contract with 3 years or more (including infinitely) | 1 month or 1 month’s salary in lieu of notice |
| Contract less than 3 years | 2 weeks or 2 weeks’ salary in lieu of notice |
| Contract from week to week | 7 days |
An employer who wants to terminate the employment contract must ensure proper legal grounds or reasons exist before the termination such as performance issue, prolonged illness, a force majeure event, or winding up of the company.
Either party may terminate the employment contract without notice or waiting for the expiry of the notice by paying the other party a sum equal to the wages or salary of the notice period.
- Retirement Age
The retirement age in Ghana is as follow:
| Gender | Retirement Age |
| Underground mine workers | 55 years old |
| All other employees | 60 years old |
The retirement age for both male and female will increase by 3 months for males and 4 months for females after every year until it reaches the target retirement age of 62 years for male and 60 years for female.
- Minimum Wage
The minimum wage of Ghana is GHS 13.53 per day or GHS 355.31 per month.
Social Security
The Social Security and National Insurance Trust (SSNIT) is charged under the National Pensions Act to administer the national social security scheme. The social security scheme takes care of the followings:
- Old age
- Invalidity due to workplace accident
- Death
All employers and employees including foreigners with valid work permits are required to make monthly contribution to the Trust.
The monthly contribution is based on the regular monthly salary or wages including all fixed allowances or benefits of the employee and are as follow:
| Type of Social Security | Contribution – % of Monthly Salary | ||
| Employer | Employee | Total | |
| SSNIT | 13.0% | 5.5% | 18.5% |
The monthly contribution is based on employee’s salary and all fixed allowances and there is no cap to the monthly contribution.
Income Tax
All employees are required to pay income tax based on their taxable income. The tax rates in Ghana are progressive based on the annual taxable income.
The income tax rates are as follow:
| Taxable Income (GHS) | Tax Rate | |
| Taxable Income | ||
| First 3,828 | From 0 to 3,828 | 0% |
| Next 1,200 | From 3,828.01 to 5,028 | 5.0% |
| Next 1,440 | From 5,028.01 to 6,468 | 10.0% |
| Next 36,000 | From 6,468.01 to 42,468 | 17.5% |
| Next 197,532 | From 42,468.01 to 240,000 | 25.0% |
| Exceeding 240,000 | From 240,000.01 and above | 30.0% |
The tax reliefs or deductibles for individual are as follow:
| Type of Relief | Amount (GHS) |
| Individual | 3,828 |
| Individual aged 60 or more | 1,500 |
| Individual with dependent spouse or at least 2 dependent children | 1,200 |
| Disable person | 25% of assessable Income |
| Dependent child or ward education (limited to 3 dependents)* | 600 each |
| Aged dependents (over 60 years old) – limited to 2 dependents | 1,000 each |
| Professional, technical, or vocational training cost | up to 2,000 |
| Social security – employee contribution | Actual amount contributed |
* Where more than 1 taxpayer qualifies for the same dependent, only 1 taxpayer can claim the relief.
Ghana practices withholding tax, that is, the employee’s annual income is estimated or calculated at the beginning of the year and the annual tax is divided over 12 months and paid monthly by the employer.
The amounts paid are reconciled to the total tax liability at the end of the year and an annual tax return must be submitted.
About Us
NuSmart is Oracle NetSuite SDN Partner, and Product Development Company focused on developing HRMS on NetSuite Cloud Platform. NuSmart is a very powerful Cloud-based HRMS software, with a vision to solve the challenges of HR processes from talent management to performance management, time management, payroll management, on boarding and exit formalities. We have it all in one HRMS software.
We understand the changing needs of the workforce so we provide an easy-to-use mobile application for employees so that they can apply leave, expenses and check their salary slip anytime on their mobile phone. With NuSmart all the information is readily available to the employees even when they are not in the office.
Our mission is to ease out the complications of HR processes.
Besides offering a complete cloud-based employee life-cycle management software, we do offer the following services:
- Payroll Outsourcing
- HR Consulting
