TaxLawGHby MSL Business School
Ghana employment tax guide
Ghana bonus, overtime and casual worker tax
Bonuses, overtime, casual workers, temporary workers and part-time employment in Ghana: rates, qualifying conditions, final tax, withholding credits and worked calculations.
Published and prepared by MSL Business School through TaxLawGH, its tax and fiscal policy education platform. Editorial authority: Michael Siaw Larbi.
MSL Business School special employment payments at a glance
How the rules apply
The payment label does not determine the tax—the statutory classification does.
For a resident employee, a qualifying bonus portion bears 5% final tax. Qualifying resident junior-staff overtime bears 5% and 10% final tax. Casual-worker pay bears 5% final tax. Excess bonus, non-qualifying overtime, temporary-worker pay and most ordinary employment payments enter the applicable PAYE computation.
Before processing a payment, establish the employee's tax residence, worker classification, annual basic salary, earlier bonuses, monthly basic salary, qualifying employment income and whether the payment is final tax or a credit on account.
Rate and treatment map
Each payment must be classified before a percentage is applied.
| Payment or worker | Current treatment | Tax character | What happens next |
|---|---|---|---|
| Resident bonus within the unused 15% annual-basic-salary limit | 5% | Final tax | Exclude the qualifying portion from ordinary employment income. |
| Resident bonus above the unused annual limit | Applicable ordinary PAYE rate | Part of employment tax | Add the excess to employment income and calculate cumulatively. |
| Qualifying resident overtime not exceeding 50% of monthly basic salary | 5% | Final tax | Exclude the qualifying overtime from ordinary employment income. |
| Qualifying resident overtime above 50% of monthly basic salary | 10% on the excess | Final tax | Apply 5% to the first qualifying slice and 10% to the excess slice. |
| Resident overtime that does not satisfy the qualifying junior-employee conditions | Applicable ordinary PAYE rate | Part of employment tax | Include the whole overtime payment in employment income. |
| Casual worker payment | 5% of gross payment | Final tax | Do not treat a temporary or permanent worker as casual merely because payment is daily. |
| Resident temporary worker | Resident graduated PAYE | Employment tax | Calculate in the same manner as other resident employment income. |
| Specified examining, invigilating, examination-supervision or part-time teaching or lecturing fee paid to a resident individual | 10% | Final tax | Apply the specified-service-fee rule rather than the general part-time employment rule. |
| Other part-time employment of a resident individual | 10% | On account | Credit the deduction when the individual's annual employment tax is determined. |
Final and on-account are not interchangeable: a final deduction settles the tax on that payment. An on-account deduction is tax already paid toward an annual liability and does not remove the annual reconciliation.
Resident employee bonus
The 15% bonus ceiling is annual, cumulative and employer-specific.
- 01Determine annual basic salary
Use the employee's basic salary for the year of assessment to which the bonus relates. Cash allowances and benefits do not enlarge the basic-salary base.
- 02Calculate the annual concession
Multiply annual basic salary by 15%. This is the maximum cumulative bonus from that employer that can bear the 5% final rate for the year.
- 03Deduct earlier bonuses
Subtract bonus payments already placed within the concession during the year. The remainder is the unused concession available to the current payment.
- 04Split the current payment
Tax the portion within the unused concession at 5% final. Add any excess to ordinary employment income and calculate PAYE using the applicable rate schedule.
Do not reset the limit every month: a later bonus can exceed the annual concession even where that single payment is less than 15% of annual basic salary. Payroll needs year-to-date bonus records.
Resident employee overtime
The 5% and 10% rates apply to a qualifying resident junior employee.
The employee must be a junior staff member. A job title alone is not enough where the employment grade and records show otherwise.
The employee's qualifying employment income from that employment for the year must not exceed GHS 18,000.
Where the overtime payment does not exceed 50% of monthly basic salary, withhold 5% from the overtime payment.
Where overtime exceeds 50% of monthly basic salary, the first slice bears 5% and the excess bears 10%.
If either employee condition fails: the overtime concession does not apply. Include the whole overtime payment in employment income and calculate ordinary PAYE. The GHS 18,000 test refers to qualifying employment income, not take-home pay.
Casual and temporary workers
The Labour Act definitions control the classification.
A worker engaged in work that is seasonal or intermittent, not for a continuous period of more than six months, whose remuneration is calculated on a daily basis.
Withhold 5% from the gross payment. The deduction is final tax on that casual-worker payment.
Section 78 defines a temporary worker as a worker employed continuously for at least one month who “is not a permanent worker or employed for a work that is seasonal in character”.
Employment income is taxed under the employer-withholding rules and the applicable First Schedule rate. A resident temporary worker therefore follows ordinary resident PAYE.
Classification is factual: section 78 joins three requirements in the casual-worker definition: the work is seasonal or intermittent, the engagement is not continuous for more than six months, and remuneration is calculated daily. A daily rate alone is insufficient.
Part-time employment and specified services
Two different 10% rules must not be confused.
| Activity | Resident rate | Character | Practical result |
|---|---|---|---|
| Examining, invigilating or supervising an examination | 10% | Final tax | The specified-service-fee treatment settles the tax on that payment. |
| Part-time teaching or lecturing | 10% | Final tax | The specified-service-fee rule applies where the statutory activity is performed. |
| Other employment that is not the employee's regular employment | 10% | On account | The employee includes the income in the annual position and claims the tax withheld. |
“Part-time employment” has a defined payroll meaning: under L.I. 2244 it is employment that is not the regular employment of the employee. The examination and teaching categories are carved out and taxed under the specified-service rule.
Non-resident employees
The non-resident chargeable-income rate is 25%; published withholding statements conflict.
Paragraph 1(2) of the First Schedule to Act 896, substituted by section 13(a) of Act 1094, taxes a non-resident individual's chargeable income at 25%. This covers Ghana-source employment income, including bonus and overtime. Regulation 5 of L.I. 2244 sets no separate non-resident rate.
Conflicting withholding statements: paragraph 8(1)(a)(ii) of the First Schedule nevertheless prints a 20% withholding rate for a non-resident employee. The GRA PAYE page also states 20% for a non-resident employee's bonus or overtime. Those statements conflict with the 25% chargeable-income rate. Obtain written clarification from GRA on withholding and reconciliation before relying on the affected treatment in payroll.
The non-resident chargeable-income rate is 25%. Keep the withholding deduction and the employee's final liability distinct where the published rates conflict.
The 25% chargeable-income rate applies. The published 20% withholding statements above require written GRA clarification; do not treat them as an undisputed final-tax concession.
Regulation 9(b)(ii) of L.I. 2244 refers to paragraph 2 of the First Schedule. Confirm the application of that cross-reference and the withholding treatment with GRA rather than assuming that it establishes a separate 25% withholding rule.
Do not infer tax residence from nationality, currency of payment, work-permit status or the location of the employer alone.
Keep the supporting evidence: retain the residence analysis, written GRA clarification, amounts withheld and the reconciliation to the employee's chargeable-income liability.
worked calculations
Four examples show where the rate and tax character change.
Example 1: a bonus that crosses the annual 15% limit
A resident employee earns GHS 10,000 monthly basic salary, so annual basic salary is GHS 120,000. Earlier bonuses from the employer total GHS 6,000. The employer now pays a further GHS 20,000 bonus.
The excess is not taxed automatically at 5%: it enters the employee's cumulative PAYE computation. Its incremental tax depends on the employee's ordinary chargeable income and year-to-date payroll position.
Example 2: qualifying overtime above 50% of basic salary
A qualifying resident junior employee earns monthly basic salary of GHS 1,200 and receives GHS 900 overtime. The employee satisfies the junior-staff and annual GHS 18,000 qualifying-employment-income conditions.
Example 3: casual-worker payment
This calculation applies only after the worker satisfies the statutory casual-worker definition.
Example 4: other resident part-time employment
The GHS 300 is not final tax: the employee includes the part-time employment income in the annual position and receives credit for the amount withheld. A qualifying examination or part-time teaching fee would instead fall under the separate 10% final-tax category.
Employer payroll controls
A defensible result needs more than a rate table.
- 01Confirm worker and residence status
Document whether the person is an employee, casual worker, temporary worker, part-time employee or independent contractor, and determine tax residence.
- 02Maintain the correct bases
Keep annual and monthly basic salary separate from allowances, benefits, overtime and bonus. Maintain year-to-date bonus and qualifying-employment-income fields.
- 03Code final tax separately
Do not merge qualifying bonus, qualifying overtime or casual-worker final tax into ordinary PAYE. Their tax character affects annual reconciliation and reporting.
- 04Reassess when facts change
A salary change, earlier bonus, change in grade, new employment or revised residence position can alter the correct treatment during the year.
- 05File and pay by the payroll deadline
Report the employer withholding and employee-level information through the online tax system and pay by the fifteenth day of the following month.
- 06Retain the evidence
Keep employment terms, worker-classification evidence, payroll registers, bonus approvals, overtime authorisations, annual basic-salary workings, returns and payment records.
Common failures: resetting the bonus limit monthly; taxing all overtime at 5%; applying casual-worker tax to a temporary employee; treating 10% part-time withholding as final; or adding final-tax payments back into ordinary chargeable employment income.
Cumulative bonus control
Multiple bonus payments must be tested against the remaining annual concession.
Assume GHS 120,000. The 15% ceiling is GHS 18,000, provided the employee and payment satisfy the statutory conditions.
A first qualifying bonus of GHS 10,000 uses GHS 10,000 of the ceiling. At 5% final tax, the tax is GHS 500.
After the first payment, GHS 8,000 of the annual ceiling remains available with that employer.
For a later GHS 12,000 bonus, GHS 8,000 remains within the concession and bears GHS 400 at 5%.
The remaining GHS 4,000 is added to ordinary employment income and taxed through the graduated PAYE calculation.
Track annual basic salary, every bonus date and amount, concession used, excess transferred to payroll and tax paid.
Classification first: This example addresses a qualifying resident-employee bonus. Overtime, casual-worker, part-time and non-resident payments require their own statutory tests.
Frequently asked questions
Ghana bonus, overtime and worker-tax questions
What is the tax rate on an employee bonus in Ghana?
For a resident employee, qualifying cumulative bonus within 15% of annual basic salary bears 5% final tax. Any excess above the unused annual limit is added to ordinary employment income and taxed through PAYE. The non-resident section explains the 25% chargeable-income rate and conflicting published 20% withholding statements.
Is the 15% bonus test applied monthly?
No. The ceiling is 15% of annual basic salary and cumulative bonus payments by the employer during the year must be considered.
How is overtime taxed in Ghana?
For a qualifying resident junior employee, overtime up to 50% of monthly basic salary bears 5% final tax and the excess bears 10% final tax. Other resident overtime enters ordinary employment income. The non-resident section explains the 25% chargeable-income rate and conflicting published 20% withholding statements.
Who is a qualifying junior employee?
The employee must be a junior staff member and the employee's qualifying employment income from that employment for the year must not exceed GHS 18,000.
Is tax on qualifying bonus and overtime final?
For the qualifying resident bonus and overtime payments described above, yes. The tax settles the liability on that payment, which is excluded from ordinary employment income. Excess bonus and non-qualifying overtime do not receive that treatment.
What is the tax rate for a casual worker?
Five percent is withheld from the gross casual-worker payment and treated as final tax, provided the worker satisfies the Labour Act definition.
Is a temporary worker taxed at 5%?
No. The 5% final rate belongs to a casual worker. A resident temporary worker is taxed under the ordinary resident employee PAYE rules.
How is part-time employment taxed?
Other part-time employment of a resident individual bears 10% withholding on account. Specified examining, invigilating, examination-supervision and part-time teaching or lecturing fees paid to a resident individual bear 10% final withholding.
What is the ordinary PAYE rate for a non-resident employee?
The chargeable-income rate is 25% under paragraph 1(2) of the First Schedule, substituted by Act 1094, including employment bonus and overtime. Paragraph 8(1)(a)(ii) nevertheless prints a 20% employment withholding rate, and GRA's PAYE page states 20% for non-resident bonus and overtime. Obtain written GRA clarification on affected withholding and reconciliation; the non-resident section explains the conflict.
When must the employer report and pay the tax?
The employer reports the deduction through the monthly PAYE process and pays the tax by the fifteenth day of the month following the month of deduction.
Legal references
Primary authority and operative framework
- Income Tax Act, 2015 (Act 896), as amendedEmployment income, employer withholding, final withholding payments, residence and the First Schedule individual rate framework.
- Income Tax Regulations, 2016 (L.I. 2244), regulations 3–13Employer withholding, bonus, overtime, casual workers, temporary workers, part-time employment, qualifying cash payments, annual liability and employer records.
- Labour Act, 2003 (Act 651), section 78The definitions of casual worker and temporary worker used by the income-tax regulations.
- Income Tax (Amendment) Act, 2023 (Act 1094), section 13(a)Substitutes paragraph 1 of the First Schedule; paragraph 1(2) sets the non-resident chargeable-income rate at 25%.
- GRA September 2026 implementation noticeOfficial notice identifying Act 1178 and publishing resident individual bands for implementation from 1 September 2026. Confirm the applicable periods and treatment with GRA for pay or annual reconciliations spanning the change.
- Revenue Administration Act, 2016 (Act 915), as amendedElectronic returns, payment, corrections, records, interest, penalties and enforcement.
Official sources: Read the Ghana Revenue Authority's Income Tax Act, 2015 (Act 896), PAYE guidance on bonuses and overtime, September 2026 implementation notice, and notice to employers on correct PAYE withholding.
Authority hierarchy: the Acts and Regulations control the legal position. Administrative guidance and the online filing process explain implementation but do not replace the legislation.
Institutional publisher
TaxLawGH is MSL Business School's Ghana tax education platform.
This guide forms part of MSL Business School's public tax and fiscal policy education work. MSL publishes TaxLawGH to make Ghana's tax law accurate, understandable and useful to employers, employees, payroll teams, practitioners, students and policy professionals.
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