Hiring Your First Employee in Ghana: Contracts, SSNIT and Payroll (2026)

Your first hire is the point at which you stop being a person who trades and become an employer with statutory duties. Most of those duties are cheap to meet on day one and expensive to fix eighteen months later, when a worker leaves and files a complaint with the Labour Department, or when SSNIT assesses arrears with a compounding penalty attached.

This guide covers what the law actually requires — not best practice, not what a consultant will sell you — for a small Ghanaian business taking on its first paid employee.

Employee or contractor? Decide honestly

The cheapest way to get this wrong is to call someone a contractor because it avoids payroll. The label on the agreement does not decide the question; the substance of the relationship does. If you control when and where the person works, supply the tools, direct the method rather than just the result, and the person works for you and largely no one else, you have an employee — whatever the document says.

That matters because an employee brings the whole Labour Act with them: a written contract, statutory leave, notice on termination, and mandatory pension contributions. A genuine contractor invoices you, handles their own tax under the rules covered in our complete guide to tax in Ghana, and may be subject to withholding tax on your payment instead.

Misclassification is not a technicality. If it unravels, you owe backdated SSNIT contributions with penalties, backdated PAYE, and potentially leave pay — all at once.

Put the contract in writing

Two separate rules apply, and small employers routinely satisfy neither.

Section 12 of the Labour Act, 2003 (Act 651) requires that employment "for a period of six months or more or for a number of working days equivalent to six months or more within a year shall be secured by a written contract of employment." A permanent hire is obviously caught. So is a seasonal worker you use repeatedly across a year.

Section 13 goes further and is the one people miss. Within two months of the employment starting, you must give the worker a written statement of the main terms, in the form set out in Schedule I, signed by both you and the worker.

Schedule I lists thirteen particulars. You need all of them:

1. Your name as employer
2. The employee's name
3. Date of first appointment
4. Job title or grade
5. Rate, method and intervals of pay
6. Hours of work
7. Holiday periods and holiday pay
8. Conditions on incapacity through sickness or injury, and sick pay details
9. Details of the social security or pension scheme
10. Notice required to terminate — separately for employer and for worker
11. Disciplinary rules that apply
12. The grievance and dispute procedure
13. Overtime payment, if any

Item 13 carries a trap. Under section 35(2), a worker "may not be required to do overtime work unless that undertaking has fixed rates of pay for overtime work." If you have not written down an overtime rate, you cannot compel overtime at all. Set the rate before you need it.

Note also that a probation period is permitted but the Act does not fix a maximum. If you want one, state its length in the contract. An unstated probation is not enforceable by implication.

Register as an employer

Two registrations, two different bodies.

With the GRA. You need to be registered for PAYE so you can file the employer's monthly return. If your business itself is not yet registered, start with our guide to registering a business in Ghana — the Ghana Card PIN now serves as the TIN for individuals, and the company gets its own number at incorporation. If your turnover has crossed the registration line you will also be dealing with VAT at the flat 20% rate, which is a separate obligation from payroll.

With SSNIT. Every employee to whom the social security scheme applies gets a Social Security Number on registration with the Trust (Act 766, s.61). That number is personal and permanent — section 61(3) expressly forbids an employer from using one worker's number for another, which occasionally tempts employers trying to save a registration step. Register the worker before the first contribution falls due; if you leave it late, SSNIT treats the missing months as arrears from the start date rather than from the date you got around to it. Confirm the current registration window directly with SSNIT, as published guidance varies.

You will also want a dedicated business account so that salary payments, deductions and your own drawings are not tangled together. Our guide on how to choose a bank account covers what to compare.

The deductions, exactly

Get these three numbers right and payroll is largely solved.

Pension: 18.5% of salary. Act 766, section 3 splits it precisely. You deduct 5.5% from the worker's salary (s.3(1)). You pay 13% on top, from your own pocket (s.3(2)). Section 3(5) is emphatic that you may not recover your 13% from the worker's pay, whatever they agree to.

Out of that 18.5% total, section 3(3) requires you to transfer, within fourteen days from the end of each month:

• 13.5% to the first-tier basic national social security scheme (SSNIT), and
• 5% to the second-tier mandatory occupational pension scheme run by a licensed corporate trustee.

A detail worth knowing: of the 13.5% that reaches SSNIT, section 63(4) diverts 2.5 percentage points to the National Health Insurance Fund — which is part of how NHIS is financed. Our SSNIT pension explainer covers what the worker eventually gets for it.

Section 63(7) adds an obligation employers forget: you must submit the monthly contribution report at the end of that month whether or not you actually remit the money. Cash-flow trouble does not excuse the report.

The penalty for late payment is not trivial. Section 64(1)(a) adds "a sum equal to three per centum per month of the contribution payable." Ignore the demand notice for thirty days and s.64(1)(c) allows a further 3% per month on the combined outstanding contribution and penalty. On a small payroll this compounds into real money quickly, and it is the single most common way a first-time employer creates a liability they did not budget for.

PAYE: monthly, by the 15th. You withhold income tax using the graduated monthly rates and file the employer's return (Form DT 107) on or before the fifteenth day of the following month, with an annual return (DT 108) after year end. The detail of the bands sits in our guide to how PAYE works in Ghana.

The one thing to get right: the employee's 5.5% SSNIT contribution comes off before you apply the tax bands. Taxing the full gross is a genuinely common payroll error and it overtaxes your staff every single month.

What one hire actually costs

Take an employee on a basic salary of GH₵2,000 a month.

Working the PAYE through the monthly bands: the first ₵402 is taxed at 0%, the next ₵110 at 5% (₵5.50), the next ₵130 at 10% (₵13.00), and the remaining ₵1,248 at 17.5% (₵218.40) — ₵236.90 in total.

Now your side of it:

Of the ₵370 combined pension money, ₵270 (13.5%) goes to SSNIT and ₵100 (5%) to the Tier 2 trustee, both within fourteen days of month end. You separately remit ₵236.90 of PAYE by the 15th.

So a ₵2,000 salary costs ₵2,260 — a 13% loading on every advertised figure. Budget on the loaded number, not the headline. You can sanity-check the tax line with our income tax calculator before you commit to an offer.

The floor, and the entitlements you cannot contract out of

The 2026 National Daily Minimum Wage is GH₵21.77, a 9% increase effective 1 January 2026. It was determined by the National Tripartite Committee under section 113(1)(a) of Act 651 at its meeting of 9 November 2025 and published in a communique signed by the Ministers for Labour and for Finance, the Ghana Employers' Association and the TUC. Any establishment paying below it "should adjust accordingly", and flouting it is sanctionable. The NTC recommended that the 2026 minimum wage be tax exempt — a recommendation, not an enactment, so confirm the position with the GRA before treating minimum-wage pay as untaxed.

Act 766 s.3(4) also sets a floor for pension contributions at 18.5% of "the approved monthly equivalent of the national daily minimum wage". The Act does not state the multiplier used to derive that monthly figure — ask SSNIT for the approved equivalent rather than assuming one.

Beyond pay, these are statutory and cannot be signed away:

• Hours (s.33): a maximum of eight hours a day or forty hours a week. Section 34 allows variation, but the average over four weeks or less must still come back to eight hours a day, and no day may exceed nine hours under a shorter-hours arrangement.
• Breaks (s.40): at least thirty minutes where hours are continuous, counting as working time; at least one hour where the day is split in two parts, not counting as working time.
• Daily rest (s.41): at least twelve continuous hours between two consecutive working days.
• Weekly rest (s.42): forty-eight consecutive hours in every seven days of normal working hours — preferably Saturday to Sunday.
• Annual leave (s.20): not less than fifteen working days with full pay in a calendar year of continuous service. "Full pay" means normal remuneration excluding overtime, including the cash value of pay in kind. Public holidays and certified sickness do not eat into it (s.22), and certified illness during leave is not counted as leave (s.24).
• Maternity leave (s.57): at least twelve weeks on full pay and benefits, extended by at least two weeks for an abnormal confinement or multiple birth. A nursing mother may interrupt work for an hour a day to nurse, and that hour is paid working time. You may not dismiss a woman for being absent on maternity leave.

Note that sections 33, 34 and the rest-period rules do not apply to task workers or domestic workers in private homes (s.44) — a real distinction if your first "hire" is a house help.

Ending it properly

Section 17 fixes the notice periods:

• Contract of three years or more — one month's notice, or one month's pay in lieu
• Contract of less than three years — two weeks' notice, or two weeks' pay in lieu
• Week-to-week contract — seven days' notice

Notice must be in writing, and the day it is given counts as part of the period. Either side can substitute pay for notice (s.18(4)). All outstanding remuneration must be paid no later than the expiry of the notice, or the next working day where no notice was required (s.18(2)–(3)).

Section 63 then lists reasons that make a termination unfair regardless of notice — among them trade union membership, pregnancy or absence on maternity leave, disability, certified temporary illness or injury, filing a complaint against you, and discrimination on gender, race, ethnicity, religion or political grounds. Paying notice does not cure an unfair reason.

What is changing

A new Labour Bill has been drafted and validated through the tripartite process and is expected to replace Act 651, with reforms reported to include longer maternity leave and the introduction of paternity leave. It has not been passed. Until it is, the Act 651 rules above are the law. Do not let a consultant sell you compliance with a bill that does not yet exist.

Frequently asked questions

Do I need a written contract for a part-time or casual worker?

Section 12 attaches to employment of six months or more, or working days equivalent to six months within a year — so a casual you use regularly across the year can be caught even though no single engagement is long. The section 13 written statement is a low-cost habit regardless: it is your evidence of what was agreed.

Can I pay the SSNIT contributions quarterly to save on transfer costs?

No. Both Act 766 s.3(3) and s.63(1) require remittance within fourteen days of the end of each month, and the section 64 penalty runs monthly. The contribution report is due at month end whether or not you have the cash.

My employee says they would rather have the cash than the pension. Can we agree that?

No. Contributions are mandatory, and section 3(5) blocks any agreement letting you recover your own 13% from the worker's salary. The money is held in trust by you until remitted (s.63(5)).

Does the employer's 13% come out of the salary I advertise?

No — it sits on top. A ₵2,000 role costs ₵2,260 a month. Plan hiring against the loaded figure so that a growing headcount does not quietly outrun your margin.

What records should I keep?

The signed Schedule I statement, a payroll register showing gross pay, the 5.5% deduction, PAYE withheld and net pay per worker per month, the monthly SSNIT contribution reports, and proof of remittance for both SSNIT and the GRA. If you need working capital while you scale headcount, lenders will ask for exactly these — see comparing business loans and the Development Bank Ghana SME facilities.

Can I hire someone and register them later once the business is stable?

That is the expensive version. SSNIT assesses arrears from the actual start date, and the 3% monthly penalty runs from when the contribution should have been paid, not from when they catch you.

Reviewed 5 September 2026. Figures verified against the Labour Act, 2003 (Act 651), the National Pensions Act, 2008 (Act 766), the National Tripartite Committee communique of 9 November 2025, and the Ghana Revenue Authority. Statutory rates and the national daily minimum wage are revised periodically — confirm current figures with the GRA and SSNIT before running payroll.

This article is general information, not financial, tax or legal advice. Speak to a qualified adviser about your own circumstances. For more, see our money guides and the Rateweb blog.