Ukraine EOR Services

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Employing in Ukraine

Home to seven world heritage sites, the chicken Kiev and the third-busiest McDonald’s in the world (yes, really), Ukraine lies in the heart of Europe — there’s even an obelisk to mark the spot!

The country is the second largest in Eastern Europe after Russia and is bordered by the former-Soviet superpower as well as Poland, Slovakia, Hungary, Moldova, Romania and Belarus. Thanks to its strategic positioning and good connections, Ukraine is the ideal location for international companies looking to do business in the Slavic nations.

Despite a turbulent political and economic past, Ukraine’s progressive approach to Europe, current political situation and implementation of important reforms have created new opportunities for doing business in the country. And now, thanks to investment and an influx of people seeking to live and work in the country, Ukraine’s economy and population are growing. Today, there are numerous advantages of setting up a business there, including low competition levels, minimal taxation rates, easy reporting and the huge potential of human resources.

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Jump to:

Working in Ukraine

Home to seven world heritage sites, the chicken Kiev and the third-busiest McDonald’s in the world (yes, really), Ukraine lies in the heart of Europe — there’s even an obelisk to mark the spot!

The country is the second largest in Eastern Europe after Russia and is bordered by the former-Soviet superpower as well as Poland, Slovakia, Hungary, Moldova, Romania and Belarus. Thanks to its strategic positioning and good connections, Ukraine is the ideal location for international companies looking to do business in the Slavic nations.

Despite a turbulent political and economic past, Ukraine’s progressive approach to Europe, current political situation and implementation of important reforms have created new opportunities for doing business in the country. And now, thanks to investment and an influx of people seeking to live and work in the country, Ukraine’s economy and population are growing. Today, there are numerous advantages of setting up a business there, including low competition levels, minimal taxation rates, easy reporting and the huge potential of human resources.

Country Guidelines

An overview of employing in Ukraine

Salary pay date

In Ukraine, salaries must be paid at least twice per month (once every 16 calendar days) on dates stipulated in the employment contract or agreement.

Common practice is to pay workers on either:

• The 15th day and last day of the month or
• The 22nd day of the month and 7th day of the next month

If a payment date coincides with a non-working day, wages should be paid the day before.

Salary

Wages are subject to indexation and a monthly minimum wage can be subject to change on a nearly monthly basis.

Bonus

There are no restrictions or guidelines related to bonuses for private-sector employees.

Social security system

Employers make monthly social security contributions to the state at a percentage of the employee’s gross salary. This covers pension, healthcare, sickness, maternity leave, unemployment and workplace accidents. Employers will then be reimbursed for certain statutory benefits such as sick leave and maternity pay.

Healthcare

Ukraine offers a public healthcare system to all Ukrainian nationals. Basic treatments are covered as part of the national healthcare; however, additional fees may be added for certain medical treatment. Private healthcare options are available and may be offered to an employee as part of an additional contractual allowance or benefit.

PEO in Ukraine

Employer costs

Monthly social contributions (USC) are made by the employer each month at a rate of 22% of an employee’s monthly salary. The USC maximum threshold is capped at 15 minimum statutory salaries. Personal income tax (PIT) is withheld by the employer from an employee’s salary. Employers are obligated to submit PIT reports on a quarterly basis to the State Authorities of Ukraine.

An overview of the main statutory benefits

Pension

The employer is required to make obligatory payments to the state pension fund on behalf of employees, this forms part of the mandatory social security contributions (USC — 22%).

Any private pension funds may be established by the employee on a voluntary basis.

Sickness

Employees are entitled to five days sickness leave paid at their regular salary by the employer. From the sixth day of leave, compensation is paid by the social security fund. Employees may receive a sick leave allowance of between 50% — 100% of their average wage, dependent on the length of their employment record.

All employees must provide a medical certificate as evidence of sick leave. For minor illnesses, 14 days is considered the maximum time for sick leave. In the case of long-term, more complex illnesses or employees requiring surgery, a period of four months may be negotiated.

Number of years in employment Sick leave allowance (%)
Less than three years 50%
Three to five years 60%
Five to eight years 70%
More than eight years 100%

Maternity & paternity

Female employees are entitled to 126 days of paid maternity leave (140 days for multiple births). This is subsidised by the social security fund and should be paid at 100% of the employee’s average salary.

Partners are entitled to 14 days of unpaid paternity leave following the birth of their child.

Adoption rights

Ukrainian law entitles parents adopting a newborn baby to 56 days of leave following the birth of the child. This is awarded to one parent only.

Parental leave

A relation of a child is entitled to unpaid leave to take care of a child following maternity leave until the child reaches three years of age. Parental leave can be shared and is transferrable. These rights are available to:

Other

Carers’ leave
Employees are entitled to three days of statutory sick leave allowance per instance of illness to take care of a family member. This is paid for by the social security fund for the first three days. Following this, employees may request up to 30 days of unpaid leave per instance of illness.

Contractual provisions

Contract of employment

A contract must be executed in its original written form. The contract may be executed in dual-language form, provided that one of the languages is Ukrainian.

Rules of registration

The employer must register the employee with the tax office before the start date. Foreign nationals must apply for a long-term visa, which is valid for 90 days; this then enables them to register for a temporary residence permit.

Probationary period

There’s no minimum probationary period for new employees. The maximum probation period is three months.

Working hours

Working hours mustn’t exceed 40 hours per week, and hours must be recorded. Employees are entitled to a five-day working week with two days off.

Rest breaks

Employees are entitled to a rest break after a period of four hours’ work. Rest breaks are not considered in the working hours and should not exceed two hours.

Overtime

Overtime work is restricted by legislation and is permitted only in exceptional cases. Ukrainian labour law states that overtime must not exceed four hours within two consecutive working days or 120 hours per annum. Any additional hours’ work should be compensated at double rates.

Vacation allowance

Vacation allowance should be paid at least three days before the annual leave is taken.

Additional leave

An employer can award a maximum of 15 days unpaid leave per year for family circumstances. The number of days should be agreed by the employer.

Termination

Contracts may only be terminated in accordance with the procedures stipulated in Ukrainian labour law.

In the case of dismissal, an employee is entitled to monetary compensation for any unused annual leave.

Protected employees

The following employees are protected from dismissal initiated by the employer:

PEO in Ukraine

Holiday Entitlement

All employees are entitled to statutory paid vacation of 24 days, once they’ve been employed for a continuous period of   six   months.   Pro-rata   leave   is   calculated   at   a   rate   of   two   days   of   vacation   per   month   worked. Annual leave must be agreed between the employer and employee. The division of annual leave may be requested by the employee, provided that the main part is a minimum of 14 continuous days.

All unused annual leave may be carried forward by a maximum of 12 months from the end of the working year in which the leave was accrued.

If a public holiday coincides with a day off, the holiday rolls forward to the next working day (or where necessary, an employee can instead opt for double remuneration). The day before a national holiday is generally one hour shorter.

Public holidays 2021
New Year’s Day Friday 1 January
Orthodox Christmas Day Thursday 7 January
International Women’s Day Monday 8 March
Labour Day Saturday 1 May *Observed Tuesday 4 May
Orthodox Easter Sunday 2 May *Observed Monday 3 May
Victory Day Sunday 9 May *Observed Monday 10 May
Trinity (Orthodox Pentecost Monday) Monday 21 June
Constitution Day of Ukraine Monday 28 June
Independence Day of Ukraine Tuesday 24 August
Day of the Defender of Ukraine Day Thursday 14 October
Catholic Christmas Day Saturday 25 December *Observed Monday 27 December
Public holidays 2022
New Year’s Day Saturday 1 January *Observed Monday 3 January
Orthodox Christmas Day Friday 7 January
International Women’s Day Tuesday 8 March
Orthodox Easter Sunday 24 April
Orthodox Easter Monday Monday 25 April
Labour Day Sunday 1 May *Observed Monday 2 May
Victory Day Monday 9 May
Trinity (Orthodox Pentecost Monday) Monday 13 June
Constitution Day of Ukraine Tuesday 28 June
Independence Day of Ukraine Wednesday 24 August
Day of the Defender of Ukraine Day Friday 14 October
Catholic Christmas Day Sunday 25 December *Observed Monday 26 December

Please note: Employees practising other (non-orthodox) religions registered in Ukraine are entitled to up to three days off each year to celebrate major holidays.

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To find out how we can help your business with our employment solutions, contact us today.

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Published date: 3rd Aug 2021
Review date: 3rd Aug 2022