Payroll and Benefits Guide Ukraine

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

General

The minimum wage is 6,700 UAH per month.

Payroll Cycle

The payroll cycle in Ukraine is bi-weekly and runs twice a month between the 15th and 20th of each month and the 31st and 7th of the following month.

13th Salary

There are no provisions in the law regarding 13th salaries.

General

The standard workweek consists of 40 hours over the course of five days. An employer can also establish a working week for six days of seven hours.

Overtime

Work in excess of the standard weekly work hours is to be paid as overtime and is regulated by the employment contract or collective agreements. When an employee is requested to work overtime or work on holidays, there are maximums in relation to the number of hours allowed. These maximums are 4 hours during two consecutive days and not more than 120 hours per year.

All overtime hours in excess of 40 hours per week are paid at an overtime compensation rate of 200% of an employee’s regular hourly rate. The overtime work performed on a rest day can be compensated by another rest day in lieu of payment.

Employees who are pregnant or have children under the age of 3, employees under 18, and employees studying at school or college are forbidden from working overtime.

Employers must receive consent from women who have children between the ages of 3 and 14 and people with disabilities to work overtime.

Overtime may be mandatory in the case of production disruptions due to accidents or to avoid production downtime.

Working Week

Monday–Friday

Paid Time Off

Employees are entitled to a minimum of 24 days of paid annual leave after completing at least 6 months of continuous employment. The paid leave entitlement may increase for minors and employees with difficult and dangerous jobs. Unused days can be accumulated for future use.

Public Holidays

Public holidays falling on weekends are moved to another day in lieu.

Sick Days

Employees are entitled to four months’ paid sick leave. The employer compensates the first five days of sick leave and the rest is compensated by the Social Insurance Fund.

The amount the Social Insurance Fund compensates an employee is dependent on the seniority of the employee:

• Fewer than six months of employment: payment based on minimum wage
• 0-3 years of employment: 50% of the employee’s average salary
• 3-5 years of employment: 60% of the employee’s average salary
• 5-8 years of employment: 70% of the employee’s average salary
• 8+ years of employment: 100% of the employee’s average salary

Maternity Leave

The maternity leave entitlement in Ukraine allows an employee 126 paid calendar days of leave, 70 of which must be taken before the estimated due date of the child and 56 after the birth.

Social Insurance Fund compensates maternity leave at 100% of the employee’s average salary.

Paternity Leave

There is no paid paternity leave in Ukraine, however, fathers can take two weeks of unpaid leave for the birth of a child. Fathers can also acquire leave from the mother’s maternity leave if she has returned to work.

In order to do this, a father must apply to his employer and provide them with a copy of the child’s birth certificate, a document confirming family ties, and a certificate from the mother’s place of employment confirming her return to work.

Parental Leave

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

Other Leave

Depending on the collective agreement or the terms of the employment contract, an employee may be allowed additional leave types upon approval between the employer and employee:

• Bereavement: An employee is entitled to bereavement leave of up to 7 days for the death of an immediate family member.
• Marriage: An employee is entitled to 10 days of leave in the event of their wedding.
• Study: Employees are entitled to paid study leave which is compensated by the employer. The length of the leave is dependent on the duration of the exam period.

Termination Process

The termination process varies according to the employment agreement and collective agreement and is based on the type of contract and reason for termination. In general, an employee’s rights are strongly protected by legislation and pregnant women, women with children under three years of age, and pre-pension employees are all protected against dismissal.

Notice Period

The notice period is dependent on the individual initiating the termination as follows:

• 2 months’ notice when the employer initiates the termination
• 14 days written notice when the employee initiates the termination
• Termination by mutual agreement has no notice period requirement

Severance Pay

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

Probation Period

The probation period is dependent on the job role of the employee. The probation period for a non-qualified employee is one month and three months for specialists and managers.

General

Taxable Benefits:
• Bonus
• Medical insurance – for employees and their families.
• Life insurance
• Meal allowance
• Car allowance
• Mobile phone expenses

VISA

Ukrainian immigration law provides limited options for employers of foreign nationals. Nationals of Azerbaijan, Armenia, Belarus, Georgia, Moldova, Russia, and Uzbekistan are D visa-exempt.

Nationals of North Macedonia are D visa-exempt for specific purposes of stay, including employment and family reunification. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by the purpose of stay and visa classification.

Business visitors to Ukraine generally require a C visa for a short-term stay unless they are visa exempt based on their nationality. C visas usually permit single, double, or multiple entries. They are granted for six months or a duration corresponding to the intended visit but no longer than five years.

Business visitors must limit their stay to 90 days in a 180-day period. They may apply for an exceptional extension of stay for a total stay of six months calculated from the initial entry if they can show compelling reasons and evidence of sufficient funds. The allowable activities under business visitor status are limited.

The main work authorization categories are the Work/Temporary Residence Permit for when the host entity is a Ukrainian company or the Accreditation Card/Temporary Residence Permit for when the host entity is a Ukraine-based representative office of a foreign company.

Work permits can be issued between one and three years depending on the foreign national’s position, education, and salary, and can be renewed. Accreditation Cards are issued for up to three years and can also be renewed.

General

Ukrainian law distinguishes between Home-based work and Remote work.

Homebased work is defined as the work that is done from home or a designated location agreed upon between the employer and the employee. Such work arrangement is more structured as employer can inspect the employee’s remote workspace and employee is required to follow regular work hours (unless agreed otherwise). In addition, employment agreements should be established in writing and location may not be changed unless approved by the employer.

Remote work is a more flexible option that allows employees to work from any location of the employee’s choosing and according to their own schedule. Remote work arrangements should be established in writing unless emergency circumstances preventing it (such as a pandemic).

The employer is required to provide remote and home-based work employees with the necessary tools and equipment to perform the job and reimburse related expenses to the employee.

Additionally, flexible working hours may be available at the request of the employee. Also at the initiative of the employer when there is a substantial change in working conditions (with two months’ notice) or when there is a threat of epidemic or any emergency (no prior notice is needed).

General

VAT is 20% standard rate.