Taxes and payrolls: the peculiarities of the labour market in Ukraine

Taxes and payrolls: the peculiarities of the labour market in Ukraine

Each labour market has some peculiarities. It may be tricky for foreigners to understand fully the payment methods, the taxes and other benefits related. In TalentUp we are starting a series of different blog articles, one for each country. This article analyses the labour market in Ukraine.

Even if the national currency is the Ukrainian Hryvnia (UAH), the whole article is in EUR to compare easily across countries and exchange rates

General data about the Ukrainian labour market

Minimum wage164.28€ monthly
Payment basisBi-weekly
PaymentMust be paid between the 15th and 20th of each month and the 31st and 7th of the following month.
Maximum working hours40h
Maximum overtime hours 4h during 2 consecutive days
Maximum overtime hours a year120h
Working hours compensation200% rate of an employee’s regular hourly rate. 
Ukrainian minimum wage and maximum working hours disclosure. Data for January 2024. Source:

Employees who are pregnant or have children under three years of age, those under 18, and those who are studying at school or college are prohibited from working overtime. Employers are required to obtain consent from women who have children aged between 3 and 14 and individuals with disabilities to work overtime. However, in cases of production disruptions due to accidents or to avoid production downtime, overtime may become mandatory.

Payroll taxes in …

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

ContingenciesEmployer %Employee %
Unified Social Contributions (maximum annual contribution 5,825.94€)22%
Total Employment Cost0.6%
Share of contingencies applied to the gross salary. Data source:

Once contributions are paid, employees need to pay a flat income tax of 18%. Moreover, there is a rate of 1.5% for the military/defence levy. In total, the income tax is 19.5%.

Contingencies from self-employees

Self-employment workers should register with the Ukrainian government. Once registered, you’ll pay a 5% tax on your profit in addition to the regular income tax rate.

Example of net salary in Ukraine

As a reference, we use the average salary of a software engineer. In Ukraine, on average, software engineers earn annually 29,400€.

Gross salary (annually)29,400
Unified Social Contributions 22%6,468 → maximum annual contribution 5,825.94€
Total Employment Cost0.6%176.4
income tax18%5,260.25
Military/defence levy1.5%438,35
Net salary (annually)23,525€
From gross to net salary of a software engineer in Ukraine.

The employer contributes 5,825.94 euros to social security, and the employee contributes 176.4 euros.

After paying the income tax, the employee has a net salary of 23,525 euros from a gross salary of 29,400 euros. 

Unemployment regulation in Ukraine

Pregnant women, women with children under three years of age, and pre-pension employees are all protected against dismissal.

The notice period depends on the individual initiating the process

Notice periodIndividual initiating
2 monthsThe employer
14 daysThe employee
No notice periodMutual agreement
Notice periods in Ukrainian contracts Data source:

In Ukraine, the severance payment is one month’s salary for every two years of employment.

The probation period for a non-qualified employee is one month and three months for specialists and managers.

Different kinds of leaves in Ukraine

After completing at least six months of continuous employment, employees have the right to a minimum of 24 days of paid annual leave. However, for minors and employees with challenging and hazardous jobs, the entitlement to paid leave may be higher.

There are 12 public holidays.

Paid sick leave lasts for 4 months. It is paid by the Social Insurance Fund, except for the first 5 days that the employee pays. The Social Insurance Fund’s compensation depends on the seniority of the employee.

Time workedSick leave payment
Less than 6 monthsPayment based on minimum wage
0-3 years of employment50.00% of the employees’ average salary
3-5 years of employment60.00% of the employees’ average salary
5-8 years of employment70.00% of the employees’ average salary
More than 8 years of employment100.00% of the employees’ average salary
Sick leave in Ukraine.  Data source:

Other leaves are:

  • Up to 7 days for bereavement leave.
  • 10 days after marriage.
  • Leave for students during the exam period.

Maternity leave lasts for 126 paid calendar days of leave: 70 before the due date, 56 after the birth. It is paid by the Social Insurance Fund at 100% of the employee’s average salary.

There is no paid paternity leave in Ukraine. Fathers can take two weeks of unpaid leave or part of the mother’s leave if they have returned to work earlier.

After maternity leave ends, mothers, fathers, and grandparents can take unpaid parental leave until the child turns 3.

Other common Ukrainian benefits

Benefit% of companies with this benefit
Casual dress code24.2
Flat hierarchy18.8
Professional development17.7
Free snacks12
Health insurance9.3
Top 5 benefits offered in Ukrainian companies. Datasource: TalentUp’s database.

How to employ a Ukrainian worker

If you are hiring workers in Ukraine, it is compulsory to provide a written employment contract that can be concluded either for a fixed or an indefinite period. Regardless of the duration of the contract, it must be in Ukrainian language.

Some platforms (Papaya Global among them) offer the Employer of Record (EoR) service helping companies hire countries where they do not have any office.

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About Author

Èlia Adroher i Llorens

Content Writer. Èlia studied International Business Economics with a focus on digital marketing. She is also interested in learning about data analysis.