An important aspect of any expansion venture is designing a competitive compensation and benefits package for employees. The first step is to familiarize yourself with all of Ukraine’s compensation laws to ensure every employee receives the right statutory and supplemental benefits.
Ukraine compensation laws
Ukraine’s minimum wage has increased to UAH 8,000 per month in 2024. Ukraine changes these wages frequently, so it’s important to check for any updates on a regular basis to ensure compliance.
Any hours over a typical 40-hour workweek are considered overtime and should be compensated at a rate of 100% over the employee’s regular salary. Employees cannot work more than 4 hours of overtime every 2 consecutive days or more than 120 hours per year. However, these compensation laws can change depending on certain labor agreements.
Guaranteed benefits in Ukraine
A Ukraine benefits management plan must include guaranteed benefits required by law. For example, the country celebrates several public holidays for which employees get the day off. Employees are also entitled to a minimum of 24 vacation days each year. Certain professions and groups of employees (e.g. disabled employees) get additional days off. Plus, employees can take a maximum of 7 days of paid leave for personal situations such as a marriage or death in the family.
Maternity leave is another guaranteed benefit in Ukraine. Pregnant employees get 70 days of maternity leave before the delivery and then 56 (or 70 days in certain cases) after the delivery. Expecting employees can also take unpaid leave until their child reaches the age of 3. The country does not offer any paid statutory paternity leave.
Ukraine benefits management
When creating a benefits plan for employees in Ukraine, you’ll need to consider supplemental benefits. Ukraine’s public healthcare system has limitations in terms of quality, so employers often provide private health insurance coverage. Meal vouchers are another optional benefit commonly provided to local employees.
Although Ukraine does not require a 13th-month bonus like other countries, many employers provide one. This bonus is considered a gratuity, and employers will often provide either that or other performance-based bonuses.
Restrictions for benefits and compensation
Companies must establish a subsidiary before working in Ukraine. The subsidiary setup process can take months and cost a significant amount of money. But with G-P, you won’t have to establish a subsidiary to begin hiring. We’ll help you start working in a few days and guide you to build a solid benefits and compensation plan to attract and retain talent.
Ukraine competitive benefits
To support your company’s growth internationally, you need to balance legal compliance with budget requirements as you build a benefits program. You’ll also want to meet local market standards and be competitive in the region. When you address these considerations, you’ll be able to more effectively build your hiring, recruiting, and retention strategies in Ukraine.
Ukraine employee benefits plans
Companies must balance several critical considerations when developing a benefits plan, including legal compliance and local market standards. Taking the time to understand local workers’ top expectations and tailoring your benefits offerings to meet those needs can help you more successfully recruit and retain talent.
Your benefits provisions can go a long way toward supporting your team members’ individual and professional growth.
Some supplemental benefits include:
- Educational stipends
- Childcare assistance
- Gym memberships and fitness events
- Life insurance
- Employer-sponsored retirement savings
Required employee benefits in Ukraine
National labor laws outline specific provisions that you must include in your benefits packages. To stay compliant, you’ll need to provide these mandatory benefits:
- Public holidays
- Vacation leave
- Personal leave
- Maternity leave
- Additional leave for certain groups of workers
- Study leave
How to design your employee benefits program
Your benefits strategy will look somewhat different in every country, as each locale will have unique regulations and market conditions. That said, you can follow these general principles.
1. Set a budget and outline your goals.
Establishing a budget is one of the first steps. You might opt to set aside a percentage of revenue rather than a specific amount, as doing so will make it easier to scale your offerings as your company grows.
Your program scope and priorities will depend on your company’s goals. Consider how you want to support employees and what resources you have available. If you want to hire a small core team and focus on retention, you might offer a wider range of supplemental benefits.
2. Explore the market and your competition.
If you want your plan to be competitive, you’ll need to research what other companies in your area and industry are offering. You can also explore local employees’ needs during this stage. Talk with them directly about the offerings they value most. Conduct interviews or send out questionnaires to discuss their top concerns and benefits they’d like to have.
3. Build an employee benefits plan.
Use your research to inform your benefits planning. Structure your offerings around the requirements, then apply the rest of your budget toward key supplemental benefits employees want. As you calculate your program costs, ensure that you factor in cost containment features, employee contributions, and administration expenses.
Average cost of benefits per employee
Each company will have different benefits program costs based on location, industry, and other unique considerations. That’s why a national average for benefits may not be the most accurate metric for your calculations.
How to calculate employee benefits
Companies are responsible for providing full pay for vacation and holiday leave. The state’s social insurance fund covers maternity benefits. For sickness leave, companies must pay for the first 5 days. The social insurance fund will cover any subsequent days.
You can calculate supplementary benefits based on market standards to provide competitive offerings for employees.
How are employee benefits taxed in Ukraine?
Companies must pay a 22% tax for each employee for employer contribution to the social insurance system. The medical insurance premiums you provide are considered part of taxable income, so you’ll need to withhold appropriate amounts.
Employee health benefits plans
Ukraine has a public healthcare system that citizens can access. However, private health insurance options are also available, and many companies opt to provide supplemental coverage for workers.
Partner with G-P to build your everywhere workforce.
As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.
Learn more about our platform and request a proposal today.