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Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in Ukraine
Tax in Ukraine
Immigration in Ukraine

Ukraine map

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Mercans offers complete payroll, PEO and HR services in Ukraine

A developed market economy, Ukraine has been undergoing a steady pace of reform which, coupled with the availability of good talent and high quality undervalued assets, continues to make the country an important long-term investment destination. At the same time, Russia’s ongoing invasion continues to affect growth, infrastructure, labor markets, and business operations, so employers should monitor legal and practical developments closely.

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Doing Business in Ukraine

Ukraine continues to maintain an extensive trade network and has pursued ongoing regulatory and European integration reforms. Since 2022, special wartime labor rules and targeted digital-economy frameworks have also affected parts of the labor market, including more flexible regulation for some IT businesses and wartime adjustments to ordinary employment rules.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Ukraine is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: Monday – Thursday from 9:00 am – 3:00 pm

Working Week

The standard working week is from Monday to Friday and the general limit remains 40 hours per week.

Labor Law

Since 2014, Ukraine has embarked on an ambitious deregulation program aimed at achieving regulatory compliance with European Union standards and global best practices as well as easing doing business. Since 2022, IT companies in Ukraine have also had access to more flexible regulation of labor relations, enhanced IP protection, and certain legal mechanisms influenced by common law approaches.

Main Industries

Coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing

GDP Growth

2.9%

Dates & Numbers

dd/mm/yyyy

Official State Name

Ukraine

Population

Population estimates vary significantly because of war-related displacement

Capital

Kyiv

Major Languages

Ukrainian

Currency

Ukrainian Hryvnia (₴)

Internet Domain

.ua

International Dialing Code

+380

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Ukraine
Kyiv, UA
8:29 pm, June 4, 2026
19°C
broken clouds
76 %
Wind Gust: 11 mph
Clouds: 56%
Sunrise: 4:50 am
Sunset: 9:02 pm

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Payroll

Salary is payable to employees at least twice a month and the amount shall be indicated in the employee’s employment agreement. Companies that operate a multi-country payroll should take note that it is obligatory to maintain timesheets for companies in Ukraine, including small businesses. These records set the grounds for salary accrual.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports should be kept in line with applicable tax, labor, and archiving rules

Reports

24 calendar days of paid annual leave on completing a minimum of six months employment

Annual Leave

Sick leave is generally paid under temporary disability rules rather than as a fixed full-pay four month entitlement

Sick Leave

126 days of paid maternity leave, usually 70 before birth and 56 after. Fathers and certain other carers may take 14 calendar days of paid paternity leave

Maternity & Paternity Leave

2 months for redundancy-related dismissal

Employee Termination

No provisions set by law

13th month salary

8647 UAH per month

Minimum Wage

If work exceeds the 40 hour work week, overtime compensation is generally 100% over the employee’s normal salary

Overtime

In many employer-initiated termination cases, severance is at least one average monthly salary

Severance Pay

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Tax and Social Security

Taxes are set out in the Tax Code. Residents are taxed on their worldwide income, subject to restrictions in any applicable Double Taxation Treaty. The same main tax rates generally apply to tax residents and non-residents, with some exceptions. An individual is enrolled in the state social security system upon signing an employment contract with a Ukrainian employer, who is responsible for payment of unified social contribution at its own expense. Employment income is also subject to military levy under the current wartime tax framework.

Tax

The tax rate applies to all passive income, such as interest, dividends, royalties, and investment profits, subject to the specific rules of the Tax Code. Income earned by tax non-residents from sources within Ukraine is generally subject to the same personal income tax rate as that for tax residents unless otherwise stated.

18%

Corporate Income Tax

18%

Personal Income Tax

20%

Sales Tax

20%

VAT

Social Security

Foreign individuals working in the representative office of a non-resident company are not usually subject to the unified social contribution. Remuneration paid by a non-resident company to an individual working in Ukraine is generally not subject to the unified social contribution.

22%

Social Security Rate

22%

Social Security Rate for Employers

0%

Social Security Rate for Employees

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Employment Law

An employee’s remuneration received is provided for performing employment duties and is subject to the unified social contribution and regulated by law. Ukraine also retains employment-related protections for persons with disabilities, while wartime labor legislation temporarily modifies some ordinary labor-code rules.

Employment Agreement

All employees should be provided with an employment agreement which contains details on the employee’s position, date of hiring, salary, terms of payment and more.

Working condition

Employees working in specified hazardous conditions and employees aged between 16 and 18 may not work over 36 hours per week. While overtime is possible, this must be well documented and compensated.

Leaves

Employees are entitled to 24 calendar days of base annual vacation, except for individuals providing services under civil law agreements. Employees may be entitled to additional vacation if working in hazardous conditions and due to the specific nature of work. Vacation allowance is calculated based on the employee’s average daily salary.

Employment termination

Termination can be initiated by either the employer or employee. All terminations are required to be in written form. An employer may terminate an agreement in a limited number of cases such as redundancy, systematic failure to fulfill employment duties, deteriorating health, unjustified absence for more than three consecutive hours during a work day and more. The employer is obligated to pay the employee the salary for the number of days worked in the month of dismissal, compensation for unused vacation days and any other payments due.

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2 months

Minimum notice period for terminating an employee

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Application suspended

Total number of public holidays

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40

Working hours per week

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As provided

Total number of days for Compassionate & Bereavement Leave

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Immigration

Obtaining a work permit has become more streamlined compared with earlier procedures, and the rules distinguish between ordinary foreign employees and certain special categories who may receive longer permit periods. There are also statutory minimum salary thresholds for some foreign employees depending on the category and legal basis of employment.

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Residency permits

There is no need to obtain a visa for applying for a work permit itself. The visa requirement depends on the foreign national’s nationality and intended stay in Ukraine. Where a foreign individual intends to obtain a temporary residence permit, they generally need the relevant long-stay D visa and must apply for the temporary residence permit not later than 15 working days before the expiration of their permitted stay or residence period.

Work Permit validity

Generally 1 year, with up to 3 years for certain special categories

Required Documents

Completed application form

Copy of the passport showing personal details

Passport-sized color photo of the employee

Draft or copy of the employment contract

Documents confirming the power to represent the employer, where applicable

Supporting documents for special categories of foreign employees where relevant

D visa and temporary residence permit documentation where the foreign national will reside in Ukraine

Other category-specific documents required by the competent employment authority

Compliant, reliable, error-free and touchless payroll in Ukraine

Build the best team and hire top talent compliantly in Ukraine. Get in touch with Ukraine payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Ukraine and how does it work for foreign companies?

    An Employer of Record in Ukraine provides a legal framework for international companies to hire local employees without establishing a Ukrainian entity. The EOR becomes the legal employer, manages employment contracts, payroll, tax filings, social security contributions and compliance with Ukrainian labour law while the client company retains operational direction.

    Why should businesses use an EOR instead of establishing a legal entity in Ukraine?

    Partnering with an EOR enables faster entry into the Ukrainian market and avoids entity registration, local licensing and the burden of administrative HR tasks. It reduces costs, simplifies scaling and ensures compliance with employment, tax and social security regulations in Ukraine.

    How does payroll outsourcing in Ukraine ensure compliance with tax and labor regulations?

    Payroll outsourcing in Ukraine ensures that salary payments, income tax withholdings and mandatory social contributions are processed in line with Ukrainian law. The service encompasses statutory reporting, maintenance of employment records and alignment with the Ukrainian labour code, reducing compliance risk.

    Can an Employer of Record in Ukraine hire employees and manage work permits for international companies?

    Yes. An EOR in Ukraine can hire both Ukrainian nationals and foreign nationals on behalf of international companies. The support includes employment agreement drafting, registration with local authorities, work permit and visa assistance and ongoing compliance with Ukrainian immigration and employment requirements.

    What are the main benefits of using EOR and payroll services in Ukraine for global expansion?

    Key benefits include rapid market access without entity formation, lower administrative cost, full legal and tax compliance in Ukraine, access to local HR and payroll expertise and flexible workforce management. This enables companies to expand into Ukraine efficiently and scale operations with minimal risk.

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