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Hiring in Ukraine
Ukraine, located in Eastern Europe and bordering the Black Sea, has a population of 44.5 million people.
When negotiating terms of an employment contract and offer letter with an employee in Ukraine, it may be useful to keep the following in mind.
Employment contracts in Ukraine
The general rule in Ukraine is that employment contracts are executed for an indefinite duration. Fixed-term contracts are allowed if employment cannot be established for an indefinite term and in specific cases only, for example in case of a particular project or task.
While it is not legally required to put an employment contract in writing, it is strongly recommended and best practice to do so. The contract should be in the local language, and it should include the terms of the employment relationship, including compensation, job title and information, benefits, place of work, and termination requirements. An employment contract in Ukraine should always state the salary and any compensation amounts in Ukrainian hryvnia rather than another currency.
Working hours in Ukraine
The standard work week in Ukraine consists of up to 8 hours per day, 40 hours per week in the case of a 5-day work week. Any hours worked beyond the typical 40-hour workweek are considered overtime and should be compensated at a rate of 100% over the employee’s regular salary. Employees can work no more than 4 hours of overtime every 2 consecutive days, or more than 120 hours per year.
Holidays in Ukraine
Ukraine celebrates a number of public holidays for which employees are given the day off, including:
- New Year’s Day
- Women’s Day
- Orthodox Easter Sunday
- Orthodox Easter Monday
- Labor Day
- Victory Day over Nazism in World War II
- Orthodox Whit Sunday
- Orthodox Whit Monday
- Constitution Day
- Independence Day
- Defender’s Day
- Catholic Christmas Day
Vacation days in Ukraine
Employees in Ukraine are entitled to a minimum of 24 paid days of annual leave per year. Employees from certain professions, disabled employees, and young employees are entitled to additional days off.
Employees are also entitled to a maximum of 7 days for personal circumstances such as marriage or death of a close family member.
Ukraine sick leave
Employees in Ukraine are entitled to sick leave. Benefits are based on the duration of employment and vary between 50% to 100% of pay. The first 5 days of sick leave compensation are paid by the employer and the rest is paid by the Ukrainian State Social Security Fund.
Maternity/paternity leave in Ukraine
Expecting employees are entitled to paid maternity leave of 70 calendar days before the due date and 56 calendar days after the birth (70 calendar days in case of giving birth to twins or complications during childbirth). The total duration of maternity leave in Ukraine is 126 days (140 days in case of giving birth to twins or complications during childbirth).
Upon the mother’s request and provided there are no medical contraindications, a portion of the 70-day leave prior to the due date can be flexibly adjusted and used in part or in full after childbirth. However, the total duration of the leave remains the same, i.e., it cannot exceed 126 calendar days (140 calendar days in the above-referred cases). Mothers are also entitled to unpaid leave until the child reaches 3 years of age.
There is no statutory paternity leave. However, fathers are able to take unpaid leave for up to 3 years after the birth of a child.
Health insurance in Ukraine
Due to certain limitations and quality concerns of the public healthcare system, private health insurance coverage is typically provided by employers in Ukraine.
Ukraine supplementary benefits
There are no supplemental benefits in Ukraine; however, meal allowances, car allowances, medical and life insurance allowances, and additional pension allowances can be provided to professionals in Ukraine.
Bonuses
The 13th-month bonus in Ukraine is considered a gratuity and is not required by local law. Many employers offer performance-based bonuses.
Termination/severance in Ukraine
Employers can set a probationary period in the employment contract of up to 3 months. During the probationary period, employers may terminate the employment contract by providing 3 days’ prior notice in writing.
Termination of an employment contract is only permitted if one of the following applies:
- Mutual agreement
- Expiration of a fixed-term contract
- Entry into military service
- Transfer to another organization, subject to the employee’s consent
- Refusal to move or refusal to work based on changes in the work environment
- Employee imprisonment
- Employee resignation
Employers may also terminate an employment contract for disciplinary reasons, such as: absence from work without a valid reason, theft of employer property, reorganization, liquidation or bankruptcy of the company, and other grounds detailed in the law.
There is typically a great deal of time and cost involved in terminating an employee for reasons other than resignation or mutual agreement, and if the proper process is not followed, the employee may have a claim for unfair dismissal.
The amount of severance pay depends on the reason for dismissal. In the case of redundancy or layoff, the employee is entitled to 1 month’s average salary.
Paying taxes in Ukraine
Employers are obligated to pay a Unified Social Tax (UST) of 22% of the employee’s gross salary. The maximum base for the UST is set at 15 times the average cost of living, subject to a cap.
Employees are subject to:
- 18% personal income tax (PIT)
- 1.5% military tax
- 20% indirect tax
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