Ukraine

Registrations and Establishing an Entity

To employ staff in Ukraine, a legal entity must be established and registered with local tax and pension authorities.

Registration includes:

• Tax registration
• Employer registration for Unified Social Contribution (USC)
• Banking setup with local currency account
• Signing official labor contracts and submitting to tax authorities

Business entities may also need licenses for regulated industries.

Banking Payments must be made via local bank accounts. Banking hours typically run from 09:00 to 17:00, Monday through Friday.

Ukraine's employment law governs the relationship between employers and employees, ensuring fair labor practices, employee rights, and compliance with local regulations. Key aspects include employment contracts, working hours, wages, social security contributions, and termination procedures.

A typical working week is 8 hours a day, 5 days a week starting at 9 am. Also in Ukraine is the part-time working week, hourly working, and evening/night work.

Overtime Payment:
All work above the standard 40 working hours per week. All overtime hours paid at 200% of the employee’s regular pay rate for every hour.

Work on Holidays:
May be compensated by a day off or 200% monetary compensation.

Public Holidays (2025)

An employer shall arrange for its workers to have holidays on the following festivals:

• 1 January – New Year’s Day
• 7 January – Orthodox Christmas
• 8 March – International Women’s Day
• Orthodox Easter (Sunday & Monday – dates vary)
• 1 May – Labour Day
• 9 May – Victory Day
• Trinity Sunday – 50th day after Easter
• 28 June – Constitution Day
• 15 July – Day of Ukrainian Statehood
• 24 August – Independence Day
• 1 October – Defender's Day

25 December – Catholic Christmas Day

Personal Income Tax (PIT)

• Flat rate of 18% applied to all income
• For non-monetary benefits, tax is calculated with a “natural” coefficient of 1.21951

Tax Benefit (Social Tax Benefit / PSP):

• Income ≤ UAH 3,760 qualifies for PSP
• The PSP amount is 50% of the monthly subsistence level (UAH 2,684 in 2025)

Military Tax (MT)

• 5% applied to all income

Single Social Contribution (SSC)

• Employer contribution: 22%
• Reduced to 8.41% for registered disabled employees
• SSC base:
  
  • Minimum: UAH 8,000
  • Maximum: UAH 160,000

If monthly salary is below UAH 8,000, employer must top up to the minimum SSC base.

Taxation of Benefits

• Monetary Benefits – Salaries, bonuses, and other cash payments are subject to PIT (18%) and USC (22%)

Non-Monetary Benefits – Such as health insurance, housing, or gifts may also be taxed
Proper classification of benefits helps optimize costs and ensures adherence to Ukrainian labor laws.

Payroll is typically paid twice a month: advance and balance
Employers must pay salaries by the 21st of the month and 7th of the next month
13th-month salary is not mandatory, but performance-based bonuses are common

Reporting

• Monthly tax and social reports must be filed electronically
• Payroll taxes and SSC are due monthly by the 20th of the following month
• Payslips must be issued with all applicable taxes and benefits included

Payroll and HR records must be retained for at least 5 years

New Employees

All relevant employment information including personal data, tax forms, contract, bank information, and insurance details must be collected and stored.

Leavers

Termination procedures must comply with labor law and contractual terms. Benefits and unused leave must be paid out accordingly.

It is mandatory to issue a termination order and report the dismissal to the tax and pension authorities.

Final payments are due on or before the last day of employment.

Annual Leave

• 24 calendar days minimum
• Extra leave may be granted for:
  
  • Computer use
  • Non-standard workdays
  • Education
  • Parental status
  • Chernobyl victims
  • Military participants
  • Quarantine reasons

• Participants in hostilities: Extra leave for veterans and active participants in military conflicts, including those involved in recent conflicts.

• During quarantine: Leave during periods of quarantine, as regulated by public health directives or workplace policies.

Sick Leave Pay

• 0–3 years seniority: 50%
• 3–5 years: 60%
• 5–8 years: 70%
• 8+ years: 100%
• First 5 days paid by employer, the rest by FSS

Maternity Leave

• 126 days fully paid (70 before, 56 after birth)
• Additional 14 days for complications or multiples
• Paid by FSS, 100% of salary
• Minimum per day not less than 262.77 UAH
• Monthly maximum: not to exceed UAH 160,000

Work Permit

• Required for all foreign workers
• Valid for 1–3 years, issued by the State Employment Service of Ukraine

D-type Visa

• Required for entry
• Must be followed by application for a temporary residence permit

Exemptions

• Simplified process for highly skilled professionals, IT workers, and foreign rep office staff

The Trusted Employer Scheme

The Trusted Employer Scheme is set to be the linchpin of this transformation, designed to simplify immigration management and cater to the needs of high-skilled professionals, technical experts, corporate professionals, and investors.

Under the TES, companies and employers will bear the responsibility of demonstrating financial strength, participating in training programs for Ukrainian citizens, and maintaining the mantle of good corporate citizenship. In exchange, they will enjoy priority processing of visa applications, reducing the burden of documentation and enhancing the efficiency of the process.

• Payroll tax payments are due on the 21st and 7th of each month
• SSC compliance includes mandatory top-ups to minimum wage base
• Bonus payments are customary, though not statutory
• Some employee benefits (health insurance, housing, etc.) may be taxed
• Ukraine’s employment law allows significant leave flexibility tied to social protections
• All reports are filed through the eCabinet tax portal
• Currency: UAH (Ukrainian Hryvnia)
• Banks operate Mon–Fri, 9am–5pm. Most closed weekends
• Salary must be paid in UAH to a Ukrainian bank account

Further Information

For more information, or assistance with Ukraine Tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.