With the shift to remote working, companies across the globe are increasingly seeking top-tier, remote talent beyond the corporate HQ. If you’re looking to expand into West Africa, Ghana offers a broad talent pool and just might be the perfect place to begin growing your distributed team thanks to a highly educated and motivated workforce.
Ghana is home to over 17 million people with over 40% of the population having some post-secondary education. Beyond that, the primary language is English, removing the language barrier for many global companies based out of North America.
When it comes to hiring Ghanaian talent, salaries aren’t the only monetary consideration to factor into your budget. Before expanding into this African nation, it is important to consider the costs of setting up an employment package. This includes tax contributions, social security contributions, overtime and vacation pay, stipends and benefits. All of these elements must be taken into account before beginning the hiring process.
Let’s analyze the costs of hiring an employee in Ghana. This includes mandatory and optional expenses. This will help you expand your global reach without increasing hiring costs.
Mandatory Costs of Hiring in Ghana
Mandatory hiring costs are non-negotiable expenses when hiring remote, Ghanaian talent. Proper accounting of salaries, taxes, overtime pay, and vacation pay is essential. Otherwise, you may break local labor laws and regulations. Mandatory costs include:
Salary
The minimum wage in Ghana is GHS 446 per month (USD 37.83) as of 2023. Employers are legally obligated to pay this wage. Salaries vary greatly between industries and job types. To offer a competitive salary, employers must consider the type of job and the skillset required for success.
Salaries in Ghana are much lower than in the U.S. and Canada. This means you will pay less for similarly qualified workers in countries with a stronger economy.
Taxes and Benefits
Employers in Ghana pay 13% in payroll taxes. This money is put towards a three-tier social security contribution scheme.
→ In Ghana, an employer is typically required to pay 13% in payroll taxes on top of an employee's gross salary. This is a general rule.
Overtime Pay
Standard working hours are 8 hours per day, 40 hours per week. The standard work week is from Monday to Friday. Overtime hours are usually paid at 150% of the normal hourly wage.
Severance Pay
There are no legal requirements for severance payments in Ghana. The worker will be paid their regular salary during the notice period. In the case of redundancy, it will need to be negotiated between the employee and employer.
Supplemental Costs of Hiring in Ghana
When the world is your competition, it pays to incentivize new and existing hires with attractive supplementary benefits like medical, dental, vision, life insurance, retirement savings plans, and other stipends and perks. When you offer attractive supplementary benefits, you are boosting morale and increasing retention which in turn lowers onboarding costs and helps you establish a strong, remote team you can rely on.
Offering attractive supplementary benefits boosts morale and increases retention. This lowers onboarding costs, helping to establish a strong, remote team that you can rely on.
Benefits
In Ghana, there are a variety of supplementary benefits certain companies offer. Typical supplementary benefits can include:
Health Benefits: To complement government-funded health care in Ghana, many companies will offer supplementary health insurance. The price will vary significantly depending on the type of private health insurance and coverage. The National Health Insurance Authority in Ghana lists a variety of private companies including Ace Medical Insurance and Apex Health Insurance Limited.
Private Pension (Provident Fund): Employers can pay into private pension plans to provide Ghanaian employees with even more retirement security. According to Enterprise Trustees, the employer, employees or both will contribute up to 16.5% of your basic salary into this fund, which is tax exempt.
Bonuses and Extras
There are no mandatory bonuses in Ghana, but many companies will choose to provide annual benefits based on performance. In Ghana, employers will sometimes offer a Christmas bonus, paid at 8.33% of the employees’ salary.
Average Cost of Hiring
Below is an estimate based on a salary of $100,000 for an employee in Ghana. This salary is designed to make it easier to calculate. It will vary depending on your hiring goals. These include the employment contract details, the candidate's experience and education, and the type of position.
Average Cost Of Hiring One Employee in Ghana (Annual in $USD)
Mandatory Burdens
Salary: $100,000
Employer Taxes: $13,000
Total: $113,000
Optional Burdens
Private Pension at 16.5% (Provident Fund): $16,500
Christmas Bonus: $8,330
Total Hiring Cost: $137,830
These totals do not include costs for soft benefits. Examples of these are memberships to co-working spaces and office set-up subsidies.
Work with Borderless
Growing your remote, global team and hiring Ghanaian talent can seem overwhelming, especially when you consider all the associated costs. Leave the headache to Borderless. Working with an Employer of Record (EOR) handles all the administrative work, ensuring compliance and giving you cost-savings, so you can focus on growing your business.
To get started, book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
