Before expanding to Ukraine, companies have to consider several factors, such as setting up payroll, establishing a subsidiary, and more. G-P can help make your expansion easier through our Employer of Record (EOR) solutions. We’ll use our existing subsidiary to hire employees on your behalf and add them to our compliant payroll.
Taxation rules in Ukraine
Companies have to pay a Unified Social Tax (UST) of 22% of every employee’s gross salary as part of Ukraine’s social security program. As an international company, you are also liable to contribute a corporate profit tax that’s 18% of your gross income and 20% indirect tax.
Employees pay 18% of their gross salary to income taxes, which employers are responsible for withholding. Employees also need to pay a military tax that’s 1.5% of their gross salary.
Ukraine payroll options for companies
You have 3 different Ukraine payroll options to choose from:
- Internal: Large companies that want to operate in Ukraine long-term can run internal payroll through their subsidiary. You will need the budget and time to hire the right HR team to ensure compliance.
- Ukraine payroll processing company: A Ukraine payroll processing company can help you outsource your payroll, so you won’t have to worry about paying employees. However, you’ll still be held responsible for compliance.
- G-P: By partnering with and Employer of Record like G-P, you can expand your global footprint without the hassle of entity setup and management. With us, companies can rest assured that all employees will be paid punctually and compliantly.
How to set up a payroll in Ukraine
Before you set up your payroll, you need to establish a subsidiary in the country. Depending on where you incorporate and what entity you choose, it could take weeks or months, and certain steps of the process will include fees. You’ll also need to open bank accounts in the country to pay employees.
Entitlement/termination terms
Entitlement and termination terms should be included in a written employment contract before hiring employees and adding them to your payroll. Ukraine allows probationary periods of up to 3 months.
Streamline global payroll management with G-P.
G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.
Contact us to learn more about how we can support you.