Ukraine

Ukraine PEO & Employer of Record Solutions by WeHG

WeHG offers a streamlined International PEO and Employer of Record (EOR) service in Ukraine, designed to support companies entering the Ukrainian market or hiring local and expatriate talent.

Unlike the traditional approach of establishing a subsidiary, our solution enables businesses to begin operations in Ukraine within days, saving both time and resources. WeHG takes on the legal responsibilities of employment—hiring staff on your behalf and managing payroll, compliance, and contracts—while you retain full operational control. Employees work exclusively for you but are legally employed under our Ukrainian entity, ensuring seamless, compliant operations.

This approach is ideal for companies looking to scale quickly, reduce administrative burdens, and maintain flexibility in managing their workforce. Whether you’re hiring for a short-term project or building a long-term team, WeHG provides a cost-effective and efficient pathway to unlock Ukraine’s immense HR potential.

Ukraine fast facts

Population, million: 43,626,593
Land area: 603,628 km²
Capital: Kyiv
Local currency: Ukrainian hryvnia (UAH)

GDP per capita:$ 4,146.53 million
GDP in currency:$ 380.55 billion

Laws applicable to foreign nationals:

On the Legal Status of Foreigners and Stateless Persons

Indicate the legislative acts and other regulations that govern the relations between employer and employee:

  • Labour Code, 
  • Collective bargaining agreements, 
  • Company internal regulations  
  • Individual employment contracts

Employment & Labor Laws in Ukraine

Necessity of written employment contract

This is necessary.

Collective agreements

The collective agreement consists at the companies, in organizations, the organizations (further – the companies) irrespective of patterns of ownership and housekeeping which exercise wage labor and have the right of the legal entity.

The collective agreement can consist in structural sectionings of the company within competence of these sectionings.

The agreement consists at national, industry, territorial levels on the bilateral or tripartite basis:

  • at the national level – the general agreement;
  • at industry level – industry (cross-industry) agreements;
  • at territorial level – territorial agreements.

The collective agreement consists between the employer on the one hand and one or several trade-union organs, and in case of lack of such organs employee representatives, the elite and representatives labor collective on the other hand.

The parties of collective agreements are the parties of the social dialogue which structure is determined according to the legislation on social dialogue.

The agreement at the regional level consists between local authorities of the government or regional associations of entrepreneurs if they have the corresponding powers, and associations of labor unions or other authorized labor collectives organs.

Different forms of engagement: employment, contracting, work with private entrepreneur

There are two main types – Employment (labour) agreement and civil agreement.

Ukraine Employment Contract and Labor Practices

Types of Employment Agreements

In Ukraine, employment agreements are classified into two main types:

  • Fixed-Term Agreements: Fixed-term agreements are allowed under certain conditions, such as temporary assignments or seasonal work. However, there are limitations regarding the maximum duration and the number of successive fixed-term agreements to prevent their misuse. These specifics should be reviewed for compliance with local labor laws.

  • Permanent Agreements: The most common type of contract in Ukraine, offering indefinite employment.

Working Hours in Ukraine

The standard working hours in Ukraine are 9:00 AM to 6:00 PM, Monday to Friday, totaling 40 hours per week (8 hours per day). However, flexible and hybrid work arrangements are increasingly common, especially for remote teams.

Overtime Regulations

Employees are allowed to work a maximum of 120 overtime hours per calendar year. Overtime is compensated at double the regular rate or through additional days off, as agreed upon in the employment contract. If the contract specifies flexible working hours, overtime pay may not apply.

Vacation Leave

Employees in Ukraine are entitled to:

  • Paid Holidays: Ten official public holidays, including New Year’s Day, Christmas Day, International Women’s Day, Orthodox Easter, Labor Day, Victory Day, Trinity, Constitution Day, Independence Day, and Defender of Ukraine Day.

  • Annual Leave: A minimum of 24 calendar days per year. Employees can accumulate unused leave, but this should not exceed 48 days, as working without vacation for more than two consecutive years is prohibited by law.

Sick Leave

Sick leave duration is determined by a doctor and can extend up to four consecutive months. The employer covers the first five days at the employee’s average salary (calculated over the last six months), while the state social security fund bears the cost thereafter.

Maternity Leave

Maternity leave in Ukraine begins 70 days before the expected due date and ends 56 days after childbirth (or 70 days in the case of multiple births or complications). During this period, the employer must reserve the employee’s position.

Severance Laws

Severance payments depend on the reason for termination:

  • Voluntary or Mutual Agreement:

    • Payment for unused vacation days

    • Final month’s salary

  • Employer-Initiated Termination:

    • Payment for unused vacation days

    • Two months’ salary as notice period compensation

    • One month’s severance pay

Termination is permissible only under specific circumstances outlined in the Labor Code, such as staff redundancy, systematic failure to fulfill job duties (with documented evidence), or unjustified absence exceeding three consecutive hours in one working day.

Payroll and Taxes in Ukraine

Statutory Taxes

  • Social Security Tax: Employers contribute 22% of the employee’s gross salary to the social security fund, but not less than 22% of the minimum wage. In 2023, the maximum taxable base was capped at 15 times the minimum wage.

  • Income Tax: Employees pay a flat income tax rate of 18% and a military tax of 1.5%.

Payroll Processing

Employers of Record (EOR) solutions, such as those offered by WeHireGlobally, ensure seamless payroll management, statutory tax compliance, and benefits administration, helping businesses manage their remote or hybrid teams effectively.

Benefits and Perks

Health Insurance

While public healthcare is available, many employers provide private health insurance to attract and retain talent due to the perceived low quality of the public system.

Additional Benefits

  • Meal Vouchers: A popular optional benefit.

  • Equipment Provision: Employers often provide leased cars, office space, computers, mobile phones, and secretarial support for remote or hybrid work setups.

Public Holidays in Ukraine

Ukraine recognizes the following public holidays:

  • New Year’s Day

  • Christmas Day

  • International Women’s Day

  • Orthodox Easter

  • Labor Day

  • Victory Day

  • Trinity

  • Constitution Day

  • Independence Day

  • Defender of Ukraine Day

Employees may take their annual leave at any time, subject to managerial approval, to ensure it does not disrupt operations.

Why Choose WeHireGlobally (WeHG)?

WeHireGlobally (WeHG) simplifies global hiring by handling:

  • Onboarding: Ensuring new hires are onboarded seamlessly.

  • Payroll and Compliance: Managing payroll, statutory taxes, and compliance with Ukrainian labor laws.

  • Benefits Administration: Offering competitive benefits packages, including health insurance and other perks.

  • Termination Support: Streamlining the termination process while ensuring legal compliance.

Our Employer of Record (EOR) solution empowers businesses to manage their international teams efficiently while mitigating risk and reducing administrative burdens.

Frequently Asked Questions (FAQ)

1. What is an Employer of Record (EOR)? An Employer of Record (EOR) Ukraine is a third-party organization that manages payroll, benefits, taxes, and compliance for employees on behalf of a company, enabling businesses to hire internationally without establishing a local legal entity.

2. How does an EOR benefit companies hiring in Ukraine? An EOR ensures compliance with Ukraine’s labor laws, handles payroll processing, statutory tax filings, and administers benefits. This allows companies to focus on managing their remote or hybrid teams without the administrative burden.

3. Are hybrid work arrangements allowed in Ukraine? Yes, hybrid work setups are becoming increasingly popular in Ukraine. These arrangements must be outlined in the employment agreement.

4. What taxes are employers required to pay in Ukraine? Employers must contribute 22% of the employee’s gross salary to the social security fund. Additionally, employees pay an income tax of 18% and a military tax of 1.5%.

5. Can unused vacation days be carried over in Ukraine? Yes, employees can accumulate unused vacation days, but the total should not exceed 48 days. Employees must take at least part of their leave every two years.

6. How is sick leave managed in Ukraine? The employer pays for the first five days of sick leave at the employee’s average salary. Afterward, the state social security fund covers the cost. The duration is determined by a doctor.

7. What additional benefits can companies provide in Ukraine? Common benefits include private health insurance, meal vouchers, leased cars, office equipment, and secretarial support. These perks help attract and retain top talent.

8. What are the public holidays in Ukraine? Ukraine recognizes ten public holidays, including New Year’s Day, Christmas Day, and Independence Day. Employees are entitled to these days off.

9. Why should businesses choose WeHireGlobally? WeHireGlobally handles onboarding, payroll, compliance, and benefits administration, offering a seamless solution for managing international teams while reducing cost and risk.

 

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