How can an Umbrella Company Help with Contracting in Ghana?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Ghana. Even better, most are experts in Ghana and expat tax law, meaning they’ll also help you optimise your earnings in Ghana.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Ghana.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Ghana, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Ghana and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Ghana
One of the most consistently challenging aspects of contracting in Ghana is complying with the country’s tax system. As well as paying tax in Ghana, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Ghana
If you’re working in Ghana under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Ghana for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Ghana, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Ghana through PAYE is left with the prospect of doing everything themselves.
Do you know much about Ghanaian Tax Law? Does Ghana have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Ghana can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Ghana
| When Do You Need to Lodge Your Tax Return? | The tax year is the Calendar year (31 December). Tax returns may be filed after the tax year ends. |
| Tax Filing Deadline | 30 April |
| Can you file it online? | Yes, https://egovonline.gegov.gov.gh/EghanaWeb/GRAHome/eghana.portal |
How to File Taxes in Ghana as a Contractor
Employers are required to file returns on behalf of employees within 3 months after the end of the tax year. If the employees and the Commissioner General agree, the returns filed by the employers will be the final return. All employees with more than one employment income must file a tax return at the end of the year.
The process of filing personal income taxes in Ghana involves:
Step 1: Register for a tax identification number. To do this, first register for temporary credentials here(link is external) by filling out your details. You will need either your national identity authority (NIA) OR Drivers License (DVLA) OR Voters Card (EC). After completing the form, you will receive an email link to register for the TIN.
Step 2: Click the link in the email and log in using your temporary credentials. Complete and submit the form to the GRA to receive your TIN.
Step 3: Log in(link is external) with your TIN and password.
Step 4: After you log in, click the “submission” tab and then click “return”.
Step 5: Enter the “Doc Type” that you would like to file a return for. For personal income tax, choose “Personal Income Tax Final”.
- If filing manually, the personal income tax return form is called the DT 103 form(link is external).
- A list of other forms are available here(link is external).
Step 6: Fill out the PIT form and click “Submit”.
- Note that failure to submit a tax return by the deadline attracts a penalty of GHC500 and an additional GHC10 for each late date.
Step 7: Any tax due can be paid via the eTax portal(link is external) or at your bank with a completed pay-in slip(link is external).
Additional information:
- A list of other forms are available here(link is external).
- Guides for filing returns and refunds for other taxes available here(link is external).
Tax Figures in Ghana
| Currency | Ghanaian Cedi (GHS) | ||||||||||||
| Tax-free Threshold in Ghana | GHS 2,592 | ||||||||||||
| Income Tax Rates |
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| Notes | The table above represents the progressive rates of income tax applicable to resident individuals. Non-residents are subject to a flat rate of 20%. |
Tax Residency in Ghana
When do you become a tax resident in Ghana
You become a tax resident in Ghana when:
- A citizen of Ghana excluding citizens who have a permanent home outside Ghana and lived in that home for the whole year of assessment.
- An individual who is present in Ghana for at least 183 days in the year of assessment.
- An employee or official of the government of Ghana posted abroad during the year of assessment
- A citizen with a permanent home in Ghana who is temporarily absent from Ghana for no longer than 365 successive days.
Does the 183 day rule apply in Ghana
Yes
Am I taxed on my global income in Ghana
Yes if you are a resident. However, the employment income of a resident individual from employment exercised in a foreign country is exempt if the employment is exercised with either:
- A nonresident employer
- A resident employer if the individual is present in the foreign country for 183 continuous days or more during the year of assessment.
Non-residents are Ghanaian-source income only.
Can you set up your own Limited Company in Ghana?
| How long does it take to set up | 14 days |
| How much does it cost | GHC 445 + 0.5% of the stated capital as commencement tax. |
| Is it easy? | Starting a Business Rank: 110 https://www.doingbusiness.org/data/exploreeconomies/ghana |
Tax Calculator in Ghana
If you are a contractor and want a calculation on your tax and net retention in Ghana, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Ghana
Contractors in Ghana are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Ghana umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Ghana taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Ghana tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Ghana
We work with numerous umbrella companies in Ghana, many of whom are experts in tax and immigration laws. If you have any questions about tax in Ghana, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Ghana work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Ghana but without the overhead of directly dealing with the Ghana tax authorities. Get in touch with us today for some reliable advice on tax in Ghana!
A Contractor’s Guide to Work Permits in Ghana
Immigration is one of the primary concerns for any contractor hoping to start working in Ghana. Permanent employees will find it easy to get their Ghana work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Ghana work permit, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Ghana is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
Work Permit Application Process
As your permanent employer, umbrella companies are able to sponsor you for your Ghana work permit provided they’re on the register of approved sponsors. Many different companies offer this service, because it makes contracting in Ghana infinitely simpler and saves you the hassle of continuous paperwork. Instead of changing your work permit every time you get a new contract, you can just work how you ordinarily would under the same permit. They protect you from the bureaucratic “rain” of legal compliance with the Ghana immigration authorities. They can even deal with the Ghana Embassy directly.
Through their service you may be able to use a business visa to get started quickly and then transition to a work visa in Ghana. It depends on your specific visa requirements. Be aware you may have to register for a residence permit in Ghana.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Ghana (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Ghana. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Ghana and match contractors with the right company for them. If you’ve already secured a contract in Ghana, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
