Ukraine

The peculiarities of the labour market in Ukraine

Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, taxes, and other benefits related to them. 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

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 Ukraine

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.

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-employed 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 29,400€ annually.

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

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. With the exception of the first five days, the Social Insurance Fund is responsible for paying it. The Social Insurance Fund’s compensation depends on the seniority of the employee.

Other leaves are:

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

Paid parental leave

Maternity leave lasts for 126 paid calendar days of leave: 70 before the due date, 56 after the birth. The Social Insurance Fund pays it at a rate equal to 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

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.