Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
An Employer of Record in Ukraine encompasses a wide range of support functions, including managing the payroll cycle, handling employer and employee contributions, ensuring compliance with minimum wage requirements, facilitating the hiring process for both employees and contractors, assisting with the recruitment of expatriates, conducting background checks, preparing employment contracts, overseeing onboarding procedures, managing employee benefits, administering social security programs, coordinating healthcare and insurance provisions, establishing and implementing leave policies, accounting for public holidays, facilitating work permit and work visa processes, managing probationary periods, notice periods, termination, and severance procedures, as well as providing guidance on personal income tax obligations.
| Overview | |
| Continent | Europe |
| Country | Ukraine |
| Capital | Kyiv |
| Time zone | UTC+02:00[4] (EET) — most of the country |
| Total Time zones | 2 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 30th Apr |
| Financial Year | 1st January to 31st December |
| Date format | dd/mm/yyyy |
| Currency | Ukrainian Hryvnia (UAH) |
| VAT | the standard rate is 20% |
Employer Payroll Contributions in Ukraine
| Employers | % of Gross Salary |
| Social Security | 22% |
| Total Employment Cost | 22% |
Employee Payroll Contributions in Ukraine
| Employees | % of Gross Salary |
| Unemployment Benefit | 0.6% |
| Total Employee Cost | 0.6% |
Minimum Wages in Ukraine
| Minimum Wage | |
| Minimum Wage | The minimum wage in Ukraine is 36.11 UAH per hour. |
Payroll Cycle in Ukraine
| Payroll | |
| Payroll Cycle | Bi-Weekly |
| 13th Salary | Not required by law. |
Personal Income Tax in Ukraine
| Income Tax | |
| Flat rate | 18% |
| Military/Defense Levy | 1.5% |
| Overall Flat Fee | 19.5% |
Hiring Options in Ukraine
Employee
In Ukraine, employment options include both part-time and full-time arrangements with varying durations. Employment can be:
- Indefinite, which is the most commonly used type.
- Fixed-term, limited to specific cases such as filling in for a temporarily absent employee or for specific positions like state officials or judges. It can also be agreed upon by the employee for personal reasons.
- Until the completion of a specific project when the duration cannot be determined in advance.
Independent Contractor
The use of independent contractors is permitted in Ukraine. However, it's important to ensure proper classification as contractors, as misclassification can lead to reclassification by relevant authorities. Penalties may apply in cases of reclassification.
Agency Worker
Engaging agency workers is a common practice for employers who require temporary employees or face limitations on direct hiring due to global headcount considerations. Ukrainian employers can engage agency workers if the following conditions are met:
- The engagement is permitted by the agency's collective agreement and has the consent of the relevant trade union.
- The employer has not conducted staff reductions within the year prior to the engagement.
- The employer complies with the statutory ratio of employees in the main professions involved in the technological processes of the primary production.
- The agency workers will not perform work typically done by employees in the main professions of the primary production's technological process.
- The agency workers will not be assigned to hazardous, physically demanding, or dangerous work environments.
Due to legal uncertainties regarding agency workers, they are often engaged through general services agreements.
Employment Contracts and Policies in Ukraine
Employment Contracts
In Ukraine, it is mandatory to have a written employment agreement that includes the employee's name and the terms and conditions of employment. This includes details such as the position, duties, start date, workplace, working hours, probationary period, and wages.
Depending on the circumstances, there are specific types of employment agreements that can be used. These include agreements for work from home (rarely used), remote work (widely used), non-fixed working hours (similar to zero-hour contracts), and agreements under the simplified regime of regulation of employment relations. In the IT industry, the special Diia City regime is commonly utilized, allowing for the conclusion of gig-contracts that combine elements of labor and civil relations.
Probationary Periods
Probationary periods in Ukraine generally cannot exceed 3 months. However, in certain cases and with consent from the applicable trade union, they may be extended to 6 months. The probationary period must be clearly stated in the employment agreement.
Policies
Written internal policies, such as internal labor regulations and labor safety regulations, are mandatory in Ukraine. Employers may also adopt additional policies and regulations as needed. If global policies are to be enforced in Ukraine, they must be localized, including translation into Ukrainian and approval as described below.
Third-Party Approval
Internal labor regulations are developed by the employer and, if applicable, in collaboration with a trade union. These regulations then require approval from the labor collective, which consists of a general meeting attended by at least 50 percent of the employees.
Employment agreements do not require third-party approval. However, any changes to employment agreements or terminations may necessitate notification and/or approval from the relevant trade union.