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Hire and manage employees in Ukraine
General overview
Ukraine, located in the heart of Eastern Europe and occupying a land area of 603,700 square kilometers, is the second largest country in Europe. It is divided into 24 provinces (oblasts) and the Autonomous Republic of Crimea, with Kyiv as its capital and the largest city. Ukrainian is the official language, and the currency is the hryvnia (UAH). Ukraine’s population was estimated at 41 million people. It’s Europe’s land of wide, fertile agricultural plains, with large pockets of heavy industry in the east.
Employment Contracts
Can be permanent and fixed-term with possible extension for another period. After the 2nd extension the contract will get indefinite. Acvian’s Ukraine PEO or Ukraine EOR is able to provide a solution of how to extend fixed-term contracts several times.
- Can be bilingual, however Ukrainian will prevail.
- Shall be signed in person; e-signature is not allowed.
- Backdated agreement is not possible.
Employees can be onboarded within one business day if all documents are provided in time (passport, id, additional statements).
Probation Period
The probationary period is typically between one-three months. It is not mandatory, however it will secure employers from severance payment in case of dismissal during the probation period.
In the employment landscape of Ukraine, a pivotal aspect for both employers and employees to understand is the probation period. A standard part of most employment contracts in Ukraine, the probation period provides an opportunity for the employer to assess the new employee’s competence and suitability for the job, and for the employee to determine if the job meets their expectations.
The Ukrainian Labor Code allows for a probation period up to three months, but for certain roles, it can extend to up to six months. However, this must be explicitly stated in the employment contract.
During the probation period, both parties have the right to terminate the employment agreement with a three-day notice.
Once the probation period is successfully completed, the employee is then confirmed in the position, offering a degree of job security. By comprehending these details, companies can navigate Ukraine’s labor law environment more proficiently, making the Employment of Record (EOR) service a valuable tool for enterprises operating within or expanding into Eastern European nations.
Working Hours
The standard amount of working time for workers cannot exceed 40 hours per week.
They are spread over five days, with two days reserved for rest. The standard working day shouldn’t exceed eight hours, however, for specific industries with difficult or hazardous conditions, it may be reduced. Overtime is permitted but strictly regulated, requiring mutual agreement between employer and employee, and often entails additional pay.
Furthermore, it’s crucial to acknowledge the provision of annual leave, which comprises 24 calendar days. Companies must take note of these factors to ensure compliance and uphold employee rights. Deep understanding of these employment specifics can foster smooth operations, workforce satisfaction, and overall success in Ukraine’s business landscape.
Vacation Days
Employees are entitled to a minimum of 24 calendar days of paid annual leave after six consecutive months of employment with the employer. After the expiration of this six-month period, employees can take paid annual leave.
The vacation allowance is measured based on the average daily salary of the employee. For the purposes of the vacation allowance, the average daily wage is measured on the basis of the employee’s compensation for the preceding 12 months (or any other applicable period), divided by the number of calendar days during the 12-month period (days of statutory holidays and days of unpaid leave are not included).
Sick Leave
Employees are entitled to sick leave in the event of sickness or accident, provided that the certificate of sick leave (or other document) from the medical institution confirms the illness or injury. For the first five days of sick leave, an employer must pay the allowance at the same rate as the daily wage.
After the sixth day, compensation is paid by the Social Security Fund of Ukraine.
Wages and Salary Payment
Employees in Ukraine are entitled to the standard minimum wage, which is modified every year.
By April 1st, 2024, it will increase to 8,000.00 UAH gross per month.
Public Holidays
Important: holidays are not celebrated during martial law.
Public holidays are paid and not included in the minimum annual holiday entitlement:
- 1st of January – New Year
- 8th of March – International Women’s Day
- 20th of April – Easter (2025) (movable)
- 1st of May – Labour Day
- 21st of April – Easter Monday (2025) (movable)
- 8th of May – Victory Day in the 2nd World War
- 8th of June – Orthodox Whit (2025) (movable)
- 9th of June – Orthodox Whit Monday (2025) (movable)
- 28th of June – Constitution Day
- 15th of July – Day of Ukrainian Statehood
- 24th of August – Independence Day
- 1st of October – Day of Ukrainian Defender
- 25 of December – Christmas
Employer Taxes
Effective January 1st, 2025, the Social Security Contribution (SSC) stands at 22%, capped at 160,000 UAH (equivalent to 20 times the minimum wage of 8000 UAH). The single contribution rate, also known as the minimum insurance contribution, is set at 1,760.00 UAH per month. This implies that the maximum SSC is calculated as 22% of 160,000 UAH, resulting in 35,200.00 UAH.
For monthly gross salaries below 160,000 UAH, the contribution is 22% of the gross amount.
The 22% of the gross salary is allocated to various funds, including the unemployment fund, accident fund, pension contribution, and temporary disability fund.
Notably, certain private pension funds are not within the scope of the coverage.
Employee Taxes
- Personal Income Tax: 18%
- Military Tax: 5%
Notice Period
The general notice period for termination of a permanent employment agreement by an employee is two weeks.
When parties agree to a mutual termination, no notice period applies.
Termination and Severance Pay
Depending on the reason for termination (dismissal, redundancy etc.), Ukraine EOR employees may have the right to a statutory severance payment from one to three monthly average salaries.
Frequently
Asked
Questions
What is International EOR and PEO?
International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.
Does Acvian handle time record submissions?
Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.
How can employees view their payroll details?
Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.
How Acvian handles payroll disputes?
Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.
Does Acvian require advanced monthly payments of salaries and service?
Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.
Can Acvian provide consultations regarding a labor and tax legislation?
Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.
Which benefits does Acvian provide?
Acvian provides a diverse range of benefits, including but not limited to:
- Health insurance
- Car leasing
- Gym allowance
- Per diem compensation
- Maternity leave
We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.
Can Acvian provide private health insurance?
Acvian can provide private health insurance options as part of its comprehensive employee benefits package.
What would the monthly/yearly costs for the employee be?
The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.
Can Acvian help with entity set up?
While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.
Offboarding: how it is handled?
Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.
When does business need it?
Businesses typically need EOR and PEO services when they:
- Expand into new international markets.
- Hire remote employees in foreign countries.
- Seek to streamline global workforce management.
- Aim to ensure compliance with local labor laws and regulations.
- Want to reduce the time and cost of establishing legal entities abroad.
Is Acvian compliant with GDPR?
Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.
Where can Acvian supply EOR services?
Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.
How does payroll work under EOR?
Under EOR, Acvian manages the payroll process by:
- Acting as the legal employer of your foreign workforce.
- Handling salary calculations, deductions, and disbursements.
- Ensuring compliance with local tax and labor laws.
- Managing payroll taxes, social contributions, and benefits.
- Providing timely and accurate payroll processing for your employees.
Explore the details here.
Can you provide support for expatriate EOR workers?
Yes, Acvian provides comprehensive support for expatriate EOR workers, including:
- Visa and work permit assistance.
- Relocation and housing support.
- Local registration and compliance.
- Payroll and tax management.
- Coordination of benefits and insurance coverage.
Explore in details here.
What are the details of expats support?
Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:
- Assistance with visa and work permit applications, renewals, and compliance.
- Support for relocation, including housing, schooling, and local registration.
- Guidance on local tax regulations and filings.
- Coordination of locally compliant benefits and insurance coverage.
- Ongoing support for any changes or issues that may arise during the expatriate assignment.
What happens after onboarding?
After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.
How many days will it take for our personnel to be onboarded?
The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.
Does Acvian provide in-country support for employee inquiries or assistance requests?
Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.
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