Updated on: 2025/08/04 14:35 (UTC)
Overview
Ukraine is a republic that consists of 24 oblasts (область, plural областях) and the national capital city of Kiev (Київ), also transliterated as Kyiv, which has oblast status. An additional city with oblast status, Sevastopol, and the autonomous republic of Crimea were annexed from Ukraine by Russia in 2014 and have been administered by Russia since then, but are still claimed by Ukraine.
Each of Ukraine’s oblasts generally is named after the oblast’s capital city. The oblasts of Ukraine are Cherkasy, Chernihiv, Chernivtsi, Dnipropetrovsk, Donetsk, Ivano-Frankivsk, Kharkiv, Kherson, Khmelnytsky, Kirovograd, the city of Kiev, the oblast of Kiev, Luhansk, Lviv, Mykolaiv, Odesa (Odessa), Poltava, Rivne, Sumy, Ternopil, Vinnytsya, Volyn, Zakarpattya, Zaporizhzhya, and Zhytomyr.
The countries that border Ukraine are Russia to the north and east; Belarus to the north; Poland, Slovakia, and Hungary to the west; and Romania and Moldova to the southwest. As per Russia’s administration of Crimea and Sevastopol, Ukraine also shares a border to its south with Russian-controlled Crimea.
The primary written and spoken language used in Ukraine is the Ukrainian language, which is the country’s official language. Although the Russian language often is used in the national capital city of Kiev and is widely used in the eastern part of Ukraine, the populace of the western part of Ukraine predominantly speaks Ukrainian. Some government entities may provide information only in Ukrainian, while others may use both Ukrainian and Russian. The English language is not commonly used throughout Ukraine. The writing system for the Ukrainian language is an alphabetic writing system with Cyrillic script that includes 33 letters. In Ukrainian, the country of Ukraine’s name is України, transliterated as Ukrayina. The directionality that is used for written Ukrainian text, as is used for English writing, is a left-to-right addition of characters along horizontal lines, with the horizontal lines read top-to-bottom.
Ukraine’s currency is the hryvnia.
Employers are responsible for withholding income tax, including a military surcharge, from employee wages, contributing a social tax known as the single social contribution, and remitting those taxes to the national government. There are no other payroll-related taxes in Ukraine. Employers are also responsible for providing basic workplace protections and benefits, such as vacations and holidays.
Foreign workers in Ukraine generally are subject to the same taxation, compensation, and benefits provisions as Ukrainian nationals, but must obtain the proper visas and permits to work legally in Ukraine.
Ukrainian citizens working in the United States are covered by U.S. tax law with possible treaty and work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.
CURRENCY DETAILS
The currency of Ukraine is the hryvnia (₴), also transliterated as hryvnya and as hryvna. The currency’s name is pronounced “HREEV-na” in Ukrainian and “GREEV-na” in Russian. The word hryvnia is rendered in Ukrainian as гривня. The internationally recognized three-letter currency code for the hryvnia is UAH, which also is one of the currency’s commonly used currency symbols in English and which is derived from Ukraine’s internationally recognized two-letter country code of UA, an abbreviation of the country’s transliterated Ukrainian-language name of Ukrayina, and H as an abbreviation of hryvnia. The English plural forms of hryvnia, hryvnya, and hryvna respectively are hryvnias, hryvnyas, and hryvnas, and the currency’s plural forms in Ukrainian are hryvni (гривні) and hryven’ (гривень), with the second of the transliterated Ukrainian plural forms also rendered with no apostrophe and with usage of the Ukrainian plural forms dependant on context.
When an amount of hryvnias is written using the currency symbol ₴, the symbol precedes the numerical value with no space between the numerical value and symbol.
When an amount of hryvnias is written in English using the currency symbol UAH or UAH., the symbol either precedes or follows the numerical value with a space between the numerical value and symbol. When an amount of hryvnias is written in Ukrainian using the currency symbol грн or грн., whose Cyrillic letters are the equivalent of “hrn” in Ukrainian, the symbol follows the numerical value with a space between the numerical value and symbol.
One hundredth ( 1 ⁄ 100 ) of a hryvnia is referred to in English as a kopek and in Ukrainian as a kopiyka (копійка), with an English plural form of kopecks and Ukrainian plural forms of kopiyok (копійок) and kopiyky (копійки), and with usage of the Ukrainian plural forms dependant on context.
When amounts of hryvnias are written in Ukrainian, the comma that in English separates the thousands place from the hundreds place instead usually is rendered as a period, and the period that in English separates the ones place from the tenths place instead usually is rendered as a comma. Some four-digit whole numbers of hryvnias may be rendered in Ukrainian government documents with no separating symbol or space between the thousands and hundreds place.
Digital Currencies: Ukraine’s payment laws and regulations require wage payments to employees and payments between businesses to be made in hryvnias, restricting the use of digital currencies for payroll-related purposes. The country’s central bank is developing a digital currency known as the e-hryvnia, which it does not plan to base on cryptocurrency technology.
TAXES
The national government enacts laws relating to taxation (оподаткування). Taxes include income tax and a single social tax, which covers many types of insurance and benefits. Employers are required to withhold income tax from employees’ wages and pay social tax contributions on the wages of employees.
Ukraine’s State Fiscal Service (Державна фіскальна служба України, abbreviated as ДФС) is responsible for administering assessment and collection of income taxes withheld from employment income and mandatory social insurance contributions.
Ukraine’s tax year is the calendar year from Jan. 1 to Dec. 31.
The word salary often is rendered in Ukrainian as ЗП, which is the abbreviation for the term equivalent to salary in Ukrainian, заробітна плата.
Income Taxes
Employees in Ukraine are liable for personal income tax (податку на доходи фізичних осіб, abbreviated as ПДФО) on their employment income. The tax rate (ставка податку) applicable to employment income differs from rates applicable to some other types of income.
Coverage: In general, all employers are required to withhold income tax from employment income paid to all employees.
Rates and Thresholds: Ukraine assesses a flat personal income tax rate of 18% on employment income.
In addition to the flat personal income tax rate, employees are assessed a military levy (військовий збір, abbreviated as ВЗ) of 1.5% that is assessed as a surtax on income.
Registration: Employers must register with the State Fiscal Service using the service’s Payer Registration (Реєстрація платника) online portal to be able to transact with the service regarding income taxes withheld from employment income. Employers must register with the Unified State Register of Enterprises and Organizations of Ukraine (Єдиний державний реєстр підприємств та організацій України, abbreviated as ЄДРПОУ), which is administered by the Ministry of Justice (Міністерство юстиції), to be able to operate as a business in Ukraine.
Taxable Amounts: Wages, incentive and compensatory payments, and benefits and reward paid or provided to employees in connection with their employment or civil-law contracts are subject to the employment income tax rate.
The value of travel vouchers for rest and health improvement provided by an employer once during a year to an employee for the employee’s use or use by members of the employee’s immediate family may be exempt from income taxation, but not the military levy, if the cost of the travel voucher is less than five times the monthly minimum wage of the year when the travel voucher was provided.
Effective for 2021, the maximum value of a tax-free employer-provided travel voucher is ₴30,000, which is five times the monthly minimum wage. Effective for 2020, the maximum value of a tax-free employer-provided travel voucher was ₴23,615, which was five times the monthly minimum wage.
Unlike self-employed individuals and independent contractors, for whom the military levy respectively is assessed on net taxable income and net income, the military levy is assessed on employees’ total gross taxable income.
Withholding Methods: Employers must withhold income taxes from employment income paid to employees.
Tax Social Benefit: Some employees may reduce the amount of their income subject to income tax withholding, and income tax in general, by an amount known as the tax social benefit (податкова соціальна пільга, abbreviated as ПСП). Employees who are eligible to reduce their taxable income for a month by the tax social benefit generally are those who were paid for that month no more than 1.4 times Ukraine’s monthly living wage as of Jan. 1 of the year of which that month is part, rounded to the nearest 10. However, employees with at least two children younger than 18 years of age are eligible for the tax social benefit for a month if the total amount of employment income they were paid for the month was no more than the standard maximum amount of income they could have been paid to be eligible, multiplied by their number of children younger than 18 years of age. As Ukraine’s monthly minimum wage typically is higher than the maximum monthly amount of employment income that may be paid to an employee for the employee to be eligible for the tax social benefit, employees with fewer than two children younger than 18 years of age usually need to be part-time employees to be eligible for the tax social benefit.
Effective for 2021, as Ukraine’s monthly living wage for the year is ₴2,270, an employee with fewer than two children younger than 18 years of age must have been paid no more than ₴3,178 during a month to be eligible to reduce his or her taxable income by the tax social benefit for the month. Effective for 2020, as Ukraine’s monthly living wage for the year was ₴2,102, an employee with fewer than two children younger than 18 years of age must have been paid no more than ₴2,940 during a month to be eligible to reduce his or her taxable income by the tax social benefit for the month.
The standard monthly amount of the tax social benefit generally is half of Ukraine’s monthly living wage. However, an employee with at least two children younger than 18 years of age may acquire a tax social benefit equal to the employee’s number of children multiplied by half of Ukraine’s monthly minimum wage. Some employees, such as student employees, are eligible for a tax social benefit equal to 1.5 times the tax social benefit for which employees generally are eligible. Single parents are eligible for a tax social benefit equal to their number of children younger than 18 years of age multiplied by 1.5 times the tax social benefit for which employees generally are eligible. A very limited number of employees are eligible for a tax social benefit equal to twice the tax social benefit for which employees generally are eligible, and among these employees are those who have been awarded with at least four medals for bravery.
Effective for 2021, half of Ukraine’s monthly living wage is ₴1,135 and this was the standard monthly tax social benefit amount, 1.5 times that amount is ₴1,702.50, and twice that amount is ₴2,270. Effective for 2020, half of Ukraine’s monthly living wage is ₴1,051 and this was the standard monthly tax social benefit amount, 1.5 times that amount was ₴1,576.50, and twice that amount was ₴2,102.
The amount of income subject to the military levy may not be reduced by the tax social benefit.
Returns and Remittance: Effective starting Jan. 1, 2021, employers report both income tax withheld from employment income paid to employees and social taxes using Form No. 1DF (Форма Њ 1ДФ), Tax Calculation: Amounts of Income Accrued (Paid) in Favor of Taxpayers and Tax Amounts Withheld from Them, as well as Amounts of the Accrued Single Contribution (Податкового розрахунку сум доходу, нарахованого (сплаченого) на користь платників податків - фізичних осіб, і сум утриманого з них податку, а також сум нарахованого єдиного внеску). Effective until Dec. 31, 2020, employers only reported income tax withheld from employment income using Form No. 1DF.
Form No. 1DF must be filed on a quarterly basis and must be submitted to the State Fiscal Service by the 40th day following the reported quarter. If the 40th day following a reported quarter is a weekend day or holiday, the deadline for filing the form is the next banking day following the weekend day or holiday. The form must be filed electronically using tools accessible from the State Fiscal Service’s Electronic Reporting (Електронна звітність) webpage. Among the tools is downloadable software known as the Specialized Client Software for Creating and Submitting Reports to the “Single Window of Submission of Electronic Reporting” (Спеціалізоване клієнтське програмне забезпечення для формування та подання звітності до “Єдиного вікна подання електронної звітності”), which is the primary tool through which forms may be electronically submitted to the State Fiscal Service.
Income tax withheld from employment income paid to employees generally must be paid to the State Fiscal Service when the employees were paid. However, income tax due to the government based on noncash fringe benefits provided to employees or nonelectronic cash provided to employees must be paid to the government within three banking days of the provisions of the noncash fringe benefits or nonelectronic cash.
Recordkeeping: Employers are required to keep records of remittances of withheld income tax for each quarter and year.
Penalties: Employers that fail to timely and adequately submit Form No. 1DF are subject to a penalty of ₴1,020 for their first violation during a year and ₴2,040 for subsequent violations during a year.
Employers that fail to sufficiently retain records regarding income taxes withheld from employment income or to provide regulatory authorities with original income tax withholding calculation documents or copies thereof for inspection are subject to a penalty of ₴1,020 for their first violation during a year and ₴2,040 for subsequent violations during a year.
The penalty for remitting to the State Fiscal Service a lower amount of income tax withheld from employment income than was required to be remitted by a particular date is 25% of the underpaid amount. However, if an employer fails to timely remit income tax withheld during a period of 1,095 days for a second time, the penalty for that second failure during that period is 50% of the underpaid amount, and if an employer fails to timely remit income tax withheld during that period for a third or subsequent time, the penalty for that third or subsequent failure during that period is 75% of the underpaid amount.
Social Taxes
The State Fiscal Service administers social taxation in Ukraine. Employers, and not employees, have social tax liability in connection with employment.
Ukraine has one social tax known as the consolidated insurance contribution (консолідований страховий внесок), often called the single social contribution (єдиний соціальний внесок, abbreviated in English as SSC and in Ukrainian as ЄСВ) or the single contribution (єдиний внесок). The single social contribution funds numerous types of insurance and benefits, including pension insurance, health insurance, temporary disability insurance, maternity leave, occupational injury insurance, and unemployment insurance. This contribution also is known in English as the unified social contribution (USC).
Coverage: All employees who are Ukrainian citizens are required to be insured by the state’s social insurance program. Ukrainian citizens who work or live outside Ukraine and citizens of other countries who work or live in Ukraine may choose to be voluntarily insured.
Rates and Thresholds: The rate of the single social contribution assessed on employers generally is 22%.
However, the single social contribution rate assessed on private-sector employers based on employment income they pay to employees with a disability is 8.41%. Lower rates are applicable to public-sector employers based on employment income they pay to employees with a disability. With regard to applicability of the reduced single social contribution rate based on employment income paid to employees with a disability, employers with eight to 25 employees are required to have at least one employee with a disability, and employers with more than 25 employees are required to have a workforce in which at least 4% of their employees have a disability.
There is a maximum amount of employment income paid to an employee during a month upon which the single social contribution rate may be assessed on the employer. This maximum amount is known as the maximum monthly contribution base, also known as the maximum base of accrual of the single social contribution (максимальна база нарахування ЄСВ) and as the maximum value of the base of the single contribution payment (максимальна величина бази нарахування єдиного внеску).
Effective since Jan. 1, 2018, the maximum monthly contribution base is 15 times the monthly minimum wage. Effective until Dec. 31, 2017, the maximum monthly contribution base was 25 times the monthly minimum wage.
Effective from Jan. 1 to Nov. 30, 2021, the maximum monthly contribution base is ₴90,000. Effective starting Dec. 1, 2021, the maximum monthly contribution base is ₴97,500. Effective from Sept. 1 to Dec. 31, 2020, the maximum monthly contribution base was ₴75,000. Effective from Jan. 1 to Aug. 31, 2020, the maximum monthly contribution base was ₴70,845.
The single social contribution also is subject to a minimum monthly tax base. If an employee’s compensation for a month was less than the minimum monthly tax base for the single social contribution, the employee’s compensation for the month would be treated as having been the minimum monthly tax base for calculations of the employer’s single social contribution liability for the month. The minimum monthly tax base is equivalent to the monthly minimum wage.
Effective from Jan. 1 to Nov. 30, 2021, the minimum monthly tax base is Ukraine’s monthly minimum wage of ₴6,000. Effective starting Dec. 1, 2021, the minimum monthly tax base is Ukraine’s monthly minimum wage of ₴6,500. Effective from Sept. 1 to Dec. 31, 2020, the minimum monthly tax base is Ukraine’s monthly minimum wage of ₴5,000. Effective from Jan. 1 to Aug. 31, 2020, the minimum monthly tax base was Ukraine’s monthly minimum wage of ₴4,723.
Registration: Employers must register with the State Fiscal Service using the service’s Payer Registration online portal to be able to transact with the service regarding social taxes.
Taxable Amounts: Taxable payments include employees’ wages, bonuses, and other incentives, as well as payments to independent contractors.
Types of payments that are not subject to the single social contribution include other employer-provided benefits, such as payments to employees with children or to employees on leave to care for a child, severance pay, and reimbursements for travel expenses.
Withholding Methods: Social insurance contributions are assessed on employers based on employee wages on a monthly basis. Employers assume the role of tax agents and are responsible for calculating and remitting all social insurance contributions.
Returns and Remittance: Single social contribution amounts must generally be remitted at the same time as payment of wages.
Effective starting Jan. 1, 2021, employers report both social taxes and income tax withheld from employment income paid to employees using Form No. 1DF (Форма Њ 1ДФ), Tax Calculation: Amounts of Income Accrued (Paid) in Favor of Taxpayers and Tax Amounts Withheld from Them, as well as Amounts of the Accrued Single Contribution (Податкового розрахунку сум доходу, нарахованого (сплаченого) на користь платників податків - фізичних осіб, і сум утриманого з них податку, а також сум нарахованого єдиного внеску).
Effective until Dec. 31, 2020, a monthly return known as Form No. D4 (Форма Њ Д4) stating the amount of contributions paid, including attached tables providing detail on wage payments, was to be submitted to the State Fiscal Service by the 20th of the following month.
Form No. 1DF must be filed on a quarterly basis and must be submitted to the State Fiscal Service by the 40th day following the reported quarter. If the 40th day following a reported quarter is a weekend day or holiday, the deadline for filing the form is the next banking day following the weekend day or holiday. Form No. 1DF must be filed electronically using tools accessible from the State Fiscal Service’s Electronic Reporting webpage. Among the tools is downloadable software known as the Specialized Client Software for Creating and Submitting Reports to the “Single Window of Submission of Electronic Reporting,” which is the primary tool through which forms may be electronically submitted to the State Fiscal Service.
Employers with more than five employees must file the return electronically using software provided by the State Fiscal Service.
Recordkeeping: Employers are required to keep records of social tax payments made, including calculations of the single social contribution, for each month and year.
Penalties: Tax-related penalties are often expressed in units known as the non-taxable minimum income of citizens (неоподатковуваний мінімум доходів громадян), often known as a minimum income (мінімум доходів). One minimum income is worth ₴17.
Penalties related to the single social contribution include:
- for failing to register as a business, 10 minimum incomes;
- for late payments, 20% of the amount owed and a penalty of 0.1% per day;
- for failing to keep records as required, eight to 15 minimum incomes;
- for failure to file a return, 10 minimum incomes.
Willful avoidance of payment of contributions is considered a criminal offense, and penalties include a fine of 300 to 2,000 minimum incomes or imprisonment, depending on the circumstances.
Other Taxes
Ukraine’s national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.
State/Jurisdiction Taxes
Taxes on employment income are not assessed by any of Ukraine’s oblasts or local jurisdictions.
COMPENSATION AND BENEFITS
The Labor Code of Ukraine regulates minimum wage requirements, overtime pay, regular hours of work, holidays, leave, wage payment, and termination pay. Ukraine’s Ministry of Social Policy enforces the country’s Labor Code.
Gig economy: Law No. 1667-IX establishes a special legal and tax regime known as Action City or Diia City (Дія Сіті) for companies in the IT industry, which is planned to launch in January 2022. Businesses participating in the regime may hire employees and gig workers, subject to the requirement that the business have an average of at least nine workers and that the average monthly pay for all workers is the equivalent of at least €1,200 per month in hryvnia, as based on the official exchange rate on the first day of a given month. Gig workers are covered by social insurance, may receive maternity and temporary disability benefits, and are entitled to 17 days of annual paid leave after six continuous months of work. A gig worker’s pay may be stated in foreign currency in their contract.
Minimum Wage
Ukraine’s national monthly and hourly minimum wages must be established at least once each year by the government.
Effective Jan. 1, 2021, the government increased the minimum wage to ₴6,000 per month or ₴36.11 per hour, and is to raise it Dec. 1, 2021, to ₴6,500 per month or ₴39.12 per hour. Effective from Sept. 1 to Dec. 31, 2020, Ukraine’s minimum wage was ₴5,000 per month or ₴29.20 per hour. Effective from Jan. 1 to Aug. 31, 2020, Ukraine’s minimum wage was ₴4,723 per month or ₴28.31 per hour.
Workers must be paid at least 20% more than their normal salary for night work, defined as work done from 10 p.m. to 6 a.m. The exact amount may be determined by industry standards or a collective bargaining agreement.
The Ukrainian term for minimum wage is мінімальна заробітна плата.
Overtime
Overtime work (надурочних робіт) is any work done beyond the daily work hours permitted under the labor law. Overtime may not exceed four hours for every two consecutive days or 120 hours in a year.
Employers only may require employees to work overtime for work necessary for national defense, maintaining public utilities, finishing work that could not be completed during normal work hours because of unforeseen circumstances, preventing shipment delays, or continuing a process where a replacement employee is absent.
Compensation for overtime is calculated as double the regular rate of pay for each hour. Work performed on holidays also must be paid at double wages.
Hours of Work
Under Ukraine’s labor law, the standard workweek is 40 hours, generally for a five-day work week.
A 24- or 36-hour workweek may apply to employees who are under 18 years old or working in hazardous conditions.
For six-day workweeks, the average workday may not exceed seven hours in a 40-hour workweek, six hours in a 36-day workweek, or 4 hours in a 24-hour workweek. Employees may not work more than five hours a day on weekends during a six-day workweek.
Night work is defined as any work between the hours of 10 p.m. and 6 a.m.
Holidays
Employees are entitled to the following paid holidays each year:
- Jan. 1: New Year’s Day, also known as New Year (Новий Рік)
- Jan. 7: Orthodox Christmas (Православний Різдво), also known as the Holiday of the Nativity of Christ (Свято Різдва Христового)
- March 8: International Women’s Day (Міжнародний жіночий день)
- Orthodox Easter Sunday, also known simply as Easter (Пасха) and as Light Christ Resurrection/Bright Christ Resurrection (Світле Христове Воскресіння)
- May 1: Labor Day (День Праці)
- May 9: Day of Victory Over Nazism in the Second World War (День перемоги над нацизмом у Другій світовій війні), also known simply as Victory Day (День Перемоги)
- Orthodox Pentecost (П’ятдесятниця), also known as Trinity (Трійця), as Holy Trinity Day (День Святої Трійці), as Day of the Descent of the Holy Spirit (День Зіслання Святого Духа), and as Green Sunday (Зелена неділя)
- June 28: Constitution Day (День Конституції)
- August 24: Independence Day (День Незалежності)
- Oct. 14: Defender of Ukraine Day (День захисника України)
- Dec. 25: Catholic Christmas (Католицьке Різдво)
Holidays that would occur on weekends are moved to the following Monday with regard to when paid leave is required to be granted.
Employers must provide employees who are members of religions other than Orthodox Christianity with up to three days a year to celebrate religious holidays.
The workday must be reduced by one hour on the day before a holiday, regardless of whether the employee has a five- or six-day week.
Employees are generally prohibited from working on holidays unless the employer is in the service industry or is continuously operating. Employees working on holidays must be paid double their normal salary. Employees may choose to receive another day off instead of extra pay.
Leave
Employees are entitled to 24 days of paid annual leave after working for an employer for at least six months. Employees additionally may take up to 15 days of unpaid leave per year for personal reasons.
Child Care Leave (відпустки для догляду за дитиною): Employees may take paid leave to take care of a child until the child is three years old.
Maternity Leave (допомоги по вагітності та пологах): Female employees may take up to 70 days of paid leave before the due date and 56 days of paid leave afterwards. Employees may take 70 days of paid leave after delivery in the case of multiple deliveries or complications during delivery. Women who are considered victims of the Chernobyl disaster may take up to 90 days of paid leave both before and after delivery. Maternity leave is paid by the State Social Insurance Fund at 100% of the employee’s average monthly salary for six months.
Leave at the Birth of a Child (відпустка при народженні дитини): Effective since May 9, 2021, male employees are entitled to 14 days of paid leave to start within three months after the birth of a child. Those eligible include the father of a child, whether married or unmarried and cohabiting, and grandparents or adult siblings regardless of gender who care for the child of a single parent.
Adoption (усиновила дитину): An employee who adopts a child within two months of the child’s birth generally may take 56 days of paid leave. However, the employee may take 70 days of paid leave when adopting multiple children.
Temporary disability insurance (допомоги по тимчасовій непрацездатності): Employees may receive temporary disability benefits in the event of their own illness or injury or that of a family member.
Compensation is paid by the employer for the first five days that the employee is incapacitated. Temporary disability insurance benefits are paid by the State Social Insurance Fund starting with the sixth day of disability. The amount of compensation depends on the length of the worker’s employment, as follows:
50% of average salary for employees with up to three years of continuous employment;
60% of average salary for employees with continuous employment for at least three years plus one day, but with continuous employment for no more than five years;
70% average salary for employees with continuous employment for at least five years plus one day, but with continuous employment for no more than eight years; and
100% for employees with more than eight years of continuous employment.
Wage Payment
Workers, whether residents or nonresidents, must be compensated in hryvnias.
Workers may be paid according to a schedule set by an employer or a collective bargaining agreement, but must be paid at least twice per month. One pay period may not exceed 16 days, and payments must be distributed within seven days of the end of the pay period.
Bonuses and Special Benefits
Ukraine does not require employers to provide bonus payments to employees.
The form and amount of bonuses may be determined by employers and industries through collective bargaining agreements.
Termination Pay
Employees wishing to terminate an employment relationship generally must provide notice at least two weeks before the intended date of termination, but may rescind their notice during the two-week period. Employers generally require the consent of the employee to terminate an employment relationship.
Employees generally must be paid at least one month of their average salary if they are terminated because of the employer’s reorganization, such as a reduction in the number of employees; because the employee is unsuited for the position; or because of the reinstatement of an employee who previously occupied the position.
If an employee chooses to resign because the employer violated labor law, a collective bargaining agreement, or the employment contract, the employee must be paid at least the amount specified in the collective bargaining agreement, with a minimum of three months of the employee’s average salary required to be paid.
If an employee leaves for conscription or entry into equivalent service, the employee must be paid at least twice the minimum wage.
Employees also must be paid compensation for unused annual leave, as well as for unused additional leave granted for employees with children.
Workers’ Compensation
Employers in Ukraine finance occupational injury (виробнича травма) benefits that provide replacement income to employees who are either totally or partially unable to work because of an injury or illness they experienced in the course of employment. The occupational injury benefits are among the social program benefits financed by the single social contribution assessed on employers.
If an employee experiences an injury or illness in the course of employment, the employer is required to inform the State Social Insurance Fund within an hour of when the employer learned of the injury or illness of the employee’s average monthly earnings and the extent of the injury or illness that the employee sustained.
In addition to receiving the temporary disability insurance benefits identified in the Leave section of this primer, if the employee becomes certified by the State Social Insurance Fund as having a permanent disability, the employee is entitled to be paid permanent disability benefits, with the monthly benefits amount based on the employee’s disability group, as follows:
- 70% of average monthly salary in the last six months of the individual’s employment for Disability Group 1, which includes individuals who no longer can work and require constant care;
- 60% of average monthly salary in the last six months of the individual’s employment for Disability Group 2, which includes individuals who no longer can work under normal production conditions and do not require constant care; and
- 40% of average monthly salary in the last six months of the individual’s employment for Disability Group 3, which includes individuals who still can work in a relatively low-intensity working environment.
The State Social Insurance Fund would be required to pay a one-time assistance payment to survivors of an employee who became deceased because of an injury or illness experienced in the course of employment, plus monthly survivors’ benefits to survivors of the deceased employee who are eligible for such benefits, and a burial expenses benefit.
Recordkeeping
Employers are required to retain records for all workers who are employed for more than five days.
Employers must provide upon an employee’s request the records of the employee’s hours worked and wages earned.
FOREIGN WORKERS
Foreign workers are entitled to the same rights as Ukrainian citizens and are generally covered by the same tax and workplace laws.
Visas: A Type D long-term visa allows an individual to enter Ukraine for a period of 90 days for the purpose of obtaining a residence permit that would enable the individual to reside in Ukraine for more than 90 days. When the individual is in Ukraine using a Type D visa, which is a multiple-entry visa, the individual must contact the State Migration Service of Ukraine to acquire a temporary residence permit or permanent residence permit.
Among the types of temporary residence permit that may be obtained is an employment permit, which is available to individuals who arrived in Ukraine specifically for employment. The individual’s employer must communicate with the State Migration Service in advance of the individual’s arrival in Ukraine to arrange for the individual to be able to receive the employment permit after arrival. The employment permit would be issued by the Ukrainian State Center of Employment.
U.S. citizens are ineligible for Ukraine’s Type C short-term visa, but this type of visa is available to residents of other countries designated as eligible by the Ukraine Ministry of Foreign Affairs. The Type C short-term visa allows an individual to reside in Ukraine for up to 90 days within the period of 180 days that starts with the first day when the individual entered Ukraine using the visa.
Individuals from the countries of Armenia, Azerbaijan, Belarus, Georgia, and Russia may enter Ukraine for a period with no maximum duration without needing to acquire a visa. Individuals from some other countries may enter Ukraine for a threshold number of days without needing to acquire a visa.
Taxes: Foreign workers are subject to the same flat personal income tax rate as Ukrainian nationals.
Wages/Payments: All workers must be compensated in hryvnias.
WORKING IN THE UNITED STATES
Foreign workers from Ukraine must meet general visa requirements and be certified to be employed in the United States. General visa requirements for the U.S. are included in the separate
U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.
For tax purposes, Ukraine citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they can claim an exemption under certain tax treaty provisions or they work under specific visa types that exempt earnings from taxes. Ukraine has an income tax treaty with the U.S.
State and local taxation of Ukrainian workers also can apply, although some states within the U.S. recognize international tax treaties that can eliminate that income tax liability for foreign workers.
The U.S. labor laws apply to all workers employed and providing services in the country.
Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.
Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the
Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.
Income Taxes: Generally, nonresidents in the U.S. who are from Ukraine and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.
A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Ukraine and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.
Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the
Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.
An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the
Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.
Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.
Tax treaties: Ukraine and the U.S. have a tax treaty with provisions addressing host country taxation of the nonresident workers. A summary of those benefits is listed in the Tax Treaty Exemption Comparison Chart. To claim the tax treaty benefit, the nonresident must file Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with the employer.
Students and trainees in particular must include a statement with Form 8233 to claim a tax treaty exemption from withholding of tax on compensation for dependent personal services. This statement affirms that the student or apprentice is temporarily in the U.S. for purposes of studying by a university or other recognized educational institution in the U.S. It also must affirm that the individual will receive compensation for services performed in the U.S. No limit is placed on student or trainee compensation for Ukrainian citizens.
Examples of the statements necessary to claim a treaty exemption from U.S. taxes are included in Internal Revenue Service Publication 519, U.S. Tax Guide for Aliens.
Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.
Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.
Totalization Agreements: Ukraine has not entered into a totalization agreement with the U.S.
Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.
There are no particular requirements that employees be paid in U.S. dollars.
TREATY ARRANGEMENTS
Ukraine has entered into more than 70 income tax treaties, including an income tax treaty with the United States. Ukraine also has more than 10 totalization agreements for social tax coverage purposes, but does not have an agreement with the United States.
Ukraine’s tax treaties can be found in
RESOURCES
All resources in English unless otherwise noted.
General
U.S. State Department: U.S. Relations With Ukraine
U.S. Central Intelligence Agency:
- The World Factbook: Ukraine
- The World Factbook: Languages
U.S. Department of Commerce: Export.gov: Ukraine - Business Travel
U.S. Library of Congress: Ukrainian Romanization Table
Currency Details
Unicode Consortium: Currency Symbols
International Organization for Standardization: Currency Codes - ISO 4217
United Nations: United Nations Terminology Database: Russia
Taxes
Tax Code of Ukraine (Ukrainian)
State Fiscal Service: (Ukrainian)
- Order of the Ministry of Internal Affairs of Jan. 21, 2014, No. 49 (Ukrainian)
- Military Levy
(Ukrainian)
Law on the Collection of a Single Contribution to Compulsory State Social Insurance (Ukrainian)
Law on Compulsory State Social Insurance (Ukrainian)
Fundamentals of Ukrainian Legislation on Compulsory State Social Insurance (Ukrainian)
State Labor Administration in Ivano-Frankivsk Oblast: The Standard of Employment for Employing Persons with Disabilities and the Correctness of its Calculation (Ukrainian)
Law No. 115-IX (Ukrainian)
Law No. 116-IX (Ukrainian)
Order of the Ministry of Finance of Dec. 15, 2020, No. 773 (Ukrainian)
Compensation and Benefits
Ukraine Ministry of Social Policy (Ukrainian)
Ukraine State Labor Service (Ukrainian)
Labor Code (Ukrainian)
Law on Leave (Ukrainian)
Law on Vacations (Ukrainian)
Law on Wage Payments (Ukrainian)
Law on the State Budget for 2021 (Ukrainian)
Law No. 1401-IX (Ukrainian) and Procedure for Granting Leave at the Birth of a Child (Ukrainian)
Law No. 1667-IX (Ukrainian) and Ministry of Digital Transformation, Diia City
Portal of State-Owned Services: Categories and Disability Groups in Ukraine (Ukrainian)
Belopil District, Sumy Oblast: Industrial Injury: Obligations of the Enterprise Regarding Compensation to the Victim (Ukrainian)
Foreign Workers
Ukraine Ministry of Foreign Affairs:
- Visa Information
- Entry Regime to Ukraine for Foreign Citizens
State Migration Service of Ukraine:
- Status Check of Residence Permit Processing
- Registration of a Temporary Residence Permit (Ukrainian)
Embassy of Ukraine in the United States of America: Visa Requirements
Working in the United States
U.S. Department of Labor:
- Foreign Labor Certification
- Hiring Foreign Workers
U.S. Internal Revenue Service:
- IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
- IRS Publication 15, Circular E, Employer’s Tax Guide
- IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS Publication 901, U.S. Tax Treaties
Treaty Arrangements
State Fiscal Service: Treaties on Avoidance of Double Taxation