Ua Payroll

Ukraine Payroll for Employers (Зарплата та податки на найманих працівників) — Skill v1.0

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

This skill covers what happens when a Ukrainian sole proprietor (ФОП / fizychna osoba-pidpryyemets) or small employer hires staff under an employment contract (трудовий договір) and must run payroll. It is distinct from the owner's own taxes: a single-tax ФОП's own single tax and personal ЄСВ are handled by ua-single-tax and ua-social-contributions. The moment that ФОП hires even one employee, it becomes a tax agent (податковий агент) and an ЄСВ payer for that employee with a separate set of obligations described below.

Wartime note. Figures are pinned at their 1 January 2026 values. Ukraine is under martial law. The military levy (військовий збір, ВЗ) is 5% on salaries since 1 December 2024 (raised from 1.5%). Most amounts key off the statutory minimum wage (₴8,647 from 1 Jan 2026). Always verify the current value before relying on a number.

Two different "ФОП" roles — don't confuse them. A ФОП can be (a) the employer running payroll for hired staff (this skill), and (b) a worker who invoices a business under a service contract instead of being on payroll (§4, misclassification).

1. Quick Reference

Headline rates (1 Jan 2026)

Conservative defaults

2. Required inputs & refusal catalogue

Inputs needed before computing payroll

1. Employer status — is the employer a ФОП or a legal entity? Is the ФОП registered as an employer / has it filed the hiring notification (повідомлення про прийняття на роботу) before the employee starts?
2. Gross salary per employee (нарахована заробітна плата) and whether full-time or part-time.
3. Employee special status — disability (for 8.41% ЄСВ), and any PIT social-tax-allowance (податкова соціальна пільга, ПСП) eligibility.
4. Pay frequency — Ukraine requires salary at least twice a month, intervals ≤ 16 calendar days.
5. Tax year / month to pin the minimum wage and caps.

Refusal catalogue

3. Gross-to-net computation

The model

For each employee, each month:

Employee withholdings (reduce take-home):
  ПДФО (PIT)          = 18% × gross salary
  Військовий збір (ВЗ) =  5% × gross salary
  Net pay             = gross − ПДФО − ВЗ

Employer cost (on top of gross, NOT withheld):
  ЄСВ                 = 22% × base, where base = max(gross, ₴8,647 minimum-wage floor)
                        capped at base ≤ ₴172,940 (20 × minimum wage)   [verify]
                        8.41% instead of 22% for employees with disability

  Total employer cost = gross + ЄСВ

Key points:

• PIT and ВЗ have no floor and no cap — they are flat percentages of the actual gross.
• ЄСВ has a floor (must be on ≥ minimum wage for a full normal month) and a cap (base ≤ 20 minimum wages = ₴172,940; max ЄСВ ≈ ₴38,046.80/month — verify).
• ЄСВ is the employer's expense; it is never deducted from the employee.
• A податкова соціальна пільга (ПСП) can reduce the PIT base for low earners — apply only if eligibility is documented; otherwise default to no ПСП.

Worked: ₴30,000 gross (standard full-time employee)

So a ₴30,000 salary costs the employer ₴36,600, the employee receives ₴23,100, and ₴13,500 goes to the budget (₴5,400 PIT + ₴1,500 ВЗ + ₴6,600 ЄСВ).

4. Employee vs ФОП-contractor (misclassification / disguised employment)

A common arrangement: instead of hiring an employee, a business asks the worker to register as a single-tax ФОП (Group 3) and invoice for "services". The worker then pays ~5% single tax + 1% military levy + their own minimum ЄСВ, and the engaging business pays no payroll PIT/ВЗ/ЄСВ. This can be legitimate for genuine independent work — but it is disguised employment (приховані трудові відносини) if the substance is an employment relationship.

Indicators that point to employment, not genuine contracting

• Fixed working hours / a workplace / subordination to internal rules.
• Single client (the engaging business is the worker's only or dominant "customer").
• Payment is a regular fixed monthly amount resembling salary, not per-deliverable.
• The business supplies the tools, equipment and workplace.
• Personal performance required; the ФОП cannot subcontract or substitute.
• Integration into the org chart, ongoing managed work rather than a defined project.

Ukraine's incoming labour-reform "5+ indicators" test presumes employment when 5 or more such criteria are met (status pending the new Labour Code — verify timing).

Consequences of misclassification

• Reclassification to an employment relationship by the labour inspectorate / court.
• Back PIT, military levy and ЄСВ for the whole period, plus interest.
• Fines under the Labour Code (КЗпП ст. 265) up to 10× minimum wage per worker for undeclared employment; potential personal liability for management.

Default guidance

If indicators point to employment, advise an employment contract with proper payroll (this skill). Only treat as a genuine ФОП-to-ФОП service contract when the worker is truly independent, has multiple clients, controls their own work, and bears business risk — document the reasoning. See R-UA-2.

Diia City gig specialists. Companies in the Diia City regime can engage гіг-спеціалісти (gig specialists) under a special gig-contract that is neither an employment contract nor an ordinary ФОП arrangement, with a favourable resident-tax regime (commonly 5% PIT). This is a separate regime — cross-ref ua-tax-optimization and do not apply the standard 18%/5%/22% set without confirming Diia City status (R-UA-5).

5. Reporting & payment calendar

Registration / before the first employee starts

• File the повідомлення про прийняття на роботу (notification of hiring) to ДПС before the employee begins work — failure is penalised.
• Issue a hiring order (наказ про прийняття) and employment contract; keep a salary ledger.

Withholding remittance (PIT + military levy)

• PIT and ВЗ are paid at the same time salary is paid (з виплатою зарплати).
• If salary is accrued but not paid, PIT/ВЗ are due by the 30th of the following month.
• Advance + final salary each month (twice-monthly pay rule, ≤ 16-day interval).

ЄСВ remittance

• ЄСВ is due by the 20th of the month following the accrual month (e.g., January salary → ЄСВ by 20 February).

Unified report — Податковий розрахунок (combined PIT + ВЗ + ЄСВ)

From 1 January 2026 (Law No. 4536-IX, 16 Jul 2025) the Податковий розрахунок — the single report combining ЄСВ, ПДФО, the military levy and the 4ДФ per-person annex — is filed quarterly with a monthly breakdown within the quarter.

Filed via the Електронний кабінет. There is no separate military-levy return — ВЗ is reported inside the Податковий розрахунок alongside PIT and ЄСВ.

6. Worked examples

Example A — Minimum-wage employee

Gross = ₴8,647 (the 2026 minimum wage), standard rates.

(ЄСВ minimum floor met exactly, since base = minimum wage.)

Example B — Part-time below minimum wage (ЄСВ floor bites)

A part-time employee is paid ₴5,000 gross for a part-time post.

The floor rule matters: for a full normal-hours position ЄСВ must be on at least ₴8,647 even if the paid salary is lower. For a genuinely part-time/partial-month post, ЄСВ may be on the actual amount — confirm the working-time basis before choosing.

Example C — Employee with a disability (reduced ЄСВ)

Gross = ₴30,000, documented disability certificate on file → ЄСВ at 8.41%.

Compared with Example "₴30,000 standard" (₴36,600 total cost), the disability rate saves the employer ₴4,077/month. (Without a certificate on file, use 22% — default.)

Example D — High earner hitting the ЄСВ cap

Gross = ₴200,000.

PIT and ВЗ apply to the full ₴200,000 (no cap); ЄСВ stops at the 20-minimum-wage base of ₴172,940, so the marginal employer ЄСВ on income above the cap is zero.

7. Tier 2 — judgement calls & edge cases

• Salary in kind / benefits — taxable; a "natural coefficient" (натуральний коефіцієнт) grosses up non-cash benefits for PIT. Flag for accountant.
• Vacation pay & sick leave — included in the ЄСВ/PIT base; first 5 days of sick leave are employer-funded, the rest from the social-insurance fund (different ЄСВ treatment on the fund-paid portion). Verify.
• ПСП (податкова соціальна пільга) — reduces PIT base for low earners meeting the income limit; apply only with documented eligibility.
• Дивіденди / royalties / GPC (civil-law) contract fees — different rate/base mixes; a civil-law service contract with an individual (not a ФОП) is still subject to PIT + ВЗ and ЄСВ (often at the standard 22%). Don't conflate with employment.
• Multiple jobs — the minimum-wage ЄСВ floor applies at the main place of work; for a secondary job ЄСВ is on actual pay. Confirm which is primary.
• Diia City — see §4 / R-UA-5 and ua-tax-optimization.

8. References & test suite

References (verify against primary sources before filing)

• Tax Code of Ukraine (ПКУ) — §167 (PIT 18%), §16¹ subsec. 10 (military levy 5%), §168 (withholding/remittance), §176 (tax-agent reporting).
• Law No. 2464-VI "On collection and accounting of the Unified Social Contribution" — 22% rate, minimum/maximum base, 8.41% for employees with disability.
• Labour Code of Ukraine (КЗпП) — ст. 265 (penalties for undeclared/disguised employment), twice-monthly pay rule, hiring notification.
• State Budget Law for 2026 (adopted 03 Dec 2025) — minimum wage ₴8,647 from 1 Jan 2026.
• Law No. 4536-IX (16 Jul 2025) — quarterly Податковий розрахунок from 1 Jan 2026.
• ДПС / State Tax Service — tax.gov.ua / dps.gov.ua; Електронний кабінет (cabinet.tax.gov.ua).
• PwC Worldwide Tax Summaries — Ukraine (corroboration of rates).

Self-check / test suite

1. ₴30,000 gross → PIT ₴5,400, ВЗ ₴1,500, net ₴23,100, ЄСВ ₴6,600, total ₴36,600. ✔
2. ₴8,647 (minimum wage) → net ₴6,658.19, ЄСВ ₴1,902.34 (= ЄСВ minimum). ✔
3. Disability employee at ₴30,000 → ЄСВ 8.41% = ₴2,523 (not ₴6,600). ✔
4. ₴200,000 → ЄСВ capped at base ₴172,940 → ЄСВ ₴38,046.80; PIT/ВЗ uncapped. ✔
5. Worker with one client, fixed hours, employer's tools, monthly fixed pay → employment indicators ≥ 5 → advise contract (R-UA-2). ✔
6. Request to pay cash off-book to skip ЄСВ → refuse (R-UA-1). ✔
7. Diia City gig specialist → do not apply 18%/5%/22%; cross-ref ua-tax-optimization (R-UA-5). ✔
8. Q1 2026 unified report deadline → 10/11 May 2026; no separate military-levy return. ✔

PROHIBITIONS

• Do NOT advise paying wages off the books, in cash undeclared, or "in envelopes" (зарплата в конвертах) to avoid ЄСВ/PIT/ВЗ.
• Do NOT structure a genuine employment relationship as a ФОП service contract to dodge payroll taxes (disguised employment).
• Do NOT accrue ЄСВ below the minimum-wage floor for a full normal-hours position.
• Do NOT apply the 8.41% reduced ЄСВ without a documented disability certificate.
• Do NOT treat Diia City gig specialists under the standard 18%/5%/22% set without confirming the regime.
• Do NOT state any rate, cap or deadline as final without verifying the current value against ДПС / a reputable source for the relevant month.
• Do NOT file or submit anything on the user's behalf, or move money — prepare figures for the user and their accountant to review and submit.

Disclaimer

This skill is research-verified against public sources (ДПС / State Tax Service, PwC Worldwide Tax Summaries, reputable Ukrainian payroll/accounting publishers) but is pending sign-off by a qualified Ukrainian accountant. Ukrainian payroll rules, minimum wage, caps, the military-levy rate and reporting forms change frequently — especially under martial law — so every figure must be re-verified for the exact month of computation. This is general information, not legal, tax or accounting advice, and does not create a professional relationship. Always have a credentialed Ukrainian accountant review payroll before salaries are paid or reports are filed. Part of openaccountants.com — open-source tax skills for the self-employed.

Source: OpenAccountants — open tax Guides for AI, reviewed by named CPAs/CAs/EAs. Quality: source-cited draft. For always-current figures and named-accountant backing, connect the OpenAccountants MCP server (openaccountants-mcp).