TaxLawGHby MSL Business School
MSL Business SchoolGhana employment tax authority guide
Ghana bonus, overtime and casual worker tax
The definitive payroll guide to bonuses, overtime, casual workers, temporary workers and part-time employment in Ghana—with the correct rates, thresholds, tax character and calculations.
Published and prepared by MSL Business School through TaxLawGH, its tax and fiscal policy education platform.
MSL Business School special employment payments at a glance
MSL Business School technical position
The payment label does not determine the tax—the statutory classification does.
A qualifying bonus portion bears 5% final tax. Qualifying 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 |
|---|---|---|---|
| Bonus within the unused 15% annual-basic-salary limit | 5% | Final tax | Exclude the qualifying portion from ordinary employment income. |
| Bonus above the unused annual limit | Applicable ordinary PAYE rate | Part of employment tax | Add the excess to employment income and calculate cumulatively. |
| Qualifying overtime not exceeding 50% of monthly basic salary | 5% | Final tax | Exclude the qualifying overtime from ordinary employment income. |
| Qualifying 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. |
| Overtime paid to an employee who is not a qualifying junior employee | 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.
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.
Employee overtime
The 5% and 10% rates apply only to a qualifying 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.
A worker employed continuously for at least one month who is not a permanent worker, or who is employed for work that is seasonal in character, within the Labour Act definition.
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: the Supreme Court has confirmed that all three features in the casual-worker definition are cumulative: 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
Separate special payments from ordinary non-resident employment income.
A non-resident individual's ordinary Ghana-source chargeable employment income is taxed at the current 25% First Schedule rate. Current GRA PAYE administration separately states a 20% rate for a non-resident employee's bonus or overtime; payroll should keep that special-payment treatment distinct from ordinary salary, allowances, benefits and non-resident part-time employment.
25% under the current non-resident individual rate in the First Schedule.
20% under the current published PAYE administrative treatment for non-resident employee special payments.
The rate in paragraph 2 of the First Schedule applies; the current rate is 25%.
Do not infer tax residence from nationality, currency of payment, work-permit status or the location of the employer alone.
MSL control point: document the employee's residence analysis and keep the payroll code for special payments separate from the code for ordinary non-resident employment income.
MSL Business School worked calculations
Four examples show where the rate and tax character change.
Example 1: a bonus that crosses the annual 15% limit
An 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 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.
Frequently asked questions
Ghana bonus, overtime and worker-tax questions
What is the tax rate on an employee bonus in Ghana?
The 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.
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 junior employee, overtime up to 50% of monthly basic salary bears 5% final tax and the excess bears 10% final tax. Otherwise, the whole overtime payment enters ordinary employment income.
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?
Yes. The tax on the qualifying payment settles the tax 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 current non-resident individual rate is 25% of chargeable income. Current published PAYE administration states a separate 20% treatment for a non-resident employee's bonus or overtime.
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.
MSL Business School legal reference map
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.
- Benjamin Aryee & 691 Others v Cocoa Marketing Company Ltd [2017–2018] 1 SCGLR 147The Supreme Court authority confirming that all three statutory features of a casual worker must be satisfied together.
- Income Tax (Amendment) Act, 2018 (Act 973)The amendment that set the ordinary non-resident individual rate at 25%.
- Income Tax (Amendment) (No. 2) Act, 2023 (Act 1111)The current graduated resident individual bands used where a payment enters ordinary employment income.
- Revenue Administration Act, 2016 (Act 915), as amendedElectronic returns, payment, corrections, records, interest, penalties and enforcement.
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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