Do I Need a Local Entity to Hire in Ghana?

In Ghana, a "local entity" typically refers to a recognized business presence, such as a subsidiary or branch office, that can act as the employer. This setup allows you to comply with local employment laws, manage payroll, and fulfill tax obligations. Without a local entity, you can’t effectively register as an employer or handle mandatory contributions and employment protections.

For companies looking to hire in Ghana without establishing a local entity, an Employer of Record (EOR) offers a viable alternative. An EOR can manage payroll and compliance on your behalf, allowing you to focus on your core business activities.

What is Required to Employ Someone in Ghana?

• Local employing entity required to directly employ? Yes (you must register with the Registrar General's Department)
• Payroll registration required? Yes (mandatory for all employers with employees)
• Withholding/tax remittance required? Yes (employers must withhold income tax and remit to GRA)
• Social contributions required? Yes (contributions to SSNIT are mandatory)
• Local employment agreement required? Yes (written contracts are standard practice)
• Mandatory benefits to budget? Yes (includes social security and other statutory benefits)
• Works council/collective agreements considerations? Usually (depends on the sector and employee count)

Best Options If You're Hiring in Ghana

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about misclassification risks.

While hiring contractors can bypass the need for a local entity, Ghanaian law has strict criteria for distinguishing between employees and contractors. If the contractor performs work that resembles employment, you may face legal challenges. Here are some key points to consider:

• Ensure the contractor has autonomy in how they complete their work.
• Avoid controlling their hours or location excessively.
• Be mindful of the nature of the work; core business functions should be handled by employees.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Ghana, depending on the type of business and the registrations required.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated GHS 1,500–3,500 per month ($130–$300)
• Payroll provider: Estimated GHS 200–600 per employee per month ($17–$50)
• Employer registrations and recurring compliance: GHS 1,000–2,000 per year ($85–$170)
• Corporate tax filings and annual reporting: Estimated GHS 2,000–5,000 per year ($170–$425)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions, which are 13% of gross salary)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Ghana

Hiring in Ghana can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Ghana quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.