The economy in the Ukraine is growing due to top industries including power generation, fuel, petrochemical and gas. There are many types of company formation options for companies looking to expand and low corporate tax rates. Starting a business and managing a workforce in the Ukraine can be challenging, so it’s important for companies to be aware of compliance and payroll considerations before getting started.
Labor and Payroll Considerations:
- Employment contracts should be written, and include job details, pay rate and working conditions
- Minimum wage is UAH 6,000 per month ($212 USD)
- Salaries must be paid to employees every 2 weeks, not to exceed 16 day intervals between payments
- Income tax and social contributions must be made each month
- Annual reporting of year-end tax model must be presented to tax authorities
- Collective Bargaining Agreements apply to every employee regardless of union membership
- Income and military tax are withheld from employee pay
- State Fiscal Services must be notified about new hires
- Foreign workers need a long-term visa valid for 90 days, which allows the worker to apply for temporary residence permit
- Employers must apply for work permits on behalf of prospective foreign workers
Funding payroll in the Ukraine is limited, as companies must have a local in-country bank account in order to pay employees. Companies must submit payroll, tax, and social contributions from the local bank account.
New anti-oligarch legislation has been introduced in 2021 in an effort to identify and define criteria that will create some limitations and barriers for oligarchs, which make up almost 25% of the Ukrainian GDP. This new legislation may have some impacts on large businesses in the Ukraine. Talk to our team if you have questions about this new legislation.
If you are just getting started or need to improve your payroll process in the Ukraine, we can help. Our cloud-based payroll platform gives you real-time access to your payroll, aggregated reporting across all countries and currencies, and a hybrid service model providing you with a dedicated US team and in-country experts to help when questions come up. Ensure compliance for your payroll and simplify the process for your team. To learn more about payroll in the Ukraine, click here