Freelancing in Ghana is administratively simple and financially treacherous. Simple because there is very little you must do. Treacherous because there is very little that will remind you to do it.
Withholding tax will surprise you
The first thing that happens to a new Ghanaian freelancer is an invoice coming back short.
Clients that are registered businesses are required to withhold tax at source on payments to you and remit it to the GRA:
| Payment for | Withholding rate |
|---|---|
| Services (resident) | 7.5% |
| Goods | 3% |
| Works (construction and similar) | 5% |
Invoice ₵10,000 for services and ₵9,250 arrives. The missing 7.5% has gone to the GRA against your tax bill.
This is a credit, not a loss. You claim it against your final tax liability. But you only get the credit if you have the evidence.
Always collect the withholding tax credit certificate
Your client should issue one. Chase it. Without it you have paid tax you cannot prove you paid, and you will be assessed as though you never did. Keep every certificate, filed by year.
You still have to file
Withholding is an instalment, not a settlement. Your actual liability is computed on your income for the year using the same graduated bands that apply to employees, after deducting your allowable business expenses.
If your withholding exceeds your liability, you are owed a refund. If it falls short, you owe the balance.
File with the GRA. Registration and filing run through the taxpayers’ portal, and your TIN is your Ghana Card PIN.
Expenses
Expenses wholly and exclusively incurred in earning your income are deductible. For most freelancers that means:
- Equipment and software
- Data and airtime, apportioned to business use
- Transport for work
- Rent for a workspace, or a proportion of your home if you work there
- Professional fees, training, subscriptions
- Bank and payment charges
Keep receipts. All of them. The GRA does not accept an assertion.
Do you need to register a business?
Not immediately. You can operate as a sole proprietor under your own name.
Register when:
- Clients require it. Corporate and government clients often will not engage an unregistered supplier.
- You cross the VAT threshold of ₵200,000 in annual taxable turnover, at which point VAT registration is compulsory.
- You want a business bank account in the business name.
- You want to limit liability, which means a limited company rather than a sole proprietorship.
Registering a business name at the ORC is inexpensive — around ₵60 — and must be renewed annually.
VAT
Above ₵200,000 annual taxable turnover, VAT registration is compulsory. You then charge VAT and the levies on your invoices, file returns, and remit.
The effective rate a client pays is 21.9%, not the headline 15%, because NHIL, GETFund and the COVID levy are charged first and VAT is charged on top of them.
VAT and the levies VAT calculator
Nobody is paying your pension
This is the quiet cost of freelancing in Ghana.
An employee gets 18.5% of basic salary going into pensions every month, 13 points of it from the employer. A freelancer gets nothing unless they arrange it.
Your options:
- SSNIT’s voluntary scheme for self-employed contributors
- A Tier 3 personal pension, with tax relief up to 16.5% of income
Do it by standing order. Nothing else will remind you, and the years pass quickly.
And no NHIS through an employer
Register for the NHIS yourself. It costs ₵25 to ₵50 a year and takes 90 days to activate, so do it before you need it.
Invoicing and getting paid
Put your details on the invoice: your name or business name, your TIN, your address, the client’s details, the date, an invoice number, a clear description, the amount, and your payment details.
State the withholding position explicitly. “Payment subject to 7.5% withholding tax; please issue the withholding tax credit certificate.” It saves an argument and a chase.
Get paid by traceable means. Bank transfer or MoMo. Cash leaves you with no record when the GRA asks how you arrived at your figure.
Late payment is endemic. Take a deposit, invoice promptly, and follow up without embarrassment.
If you are not Ghanaian
Independent work as a foreign national is considerably harder. There is no simple freelance visa; the route generally runs through incorporating a company and meeting the GIPC minimum capital thresholds.