Employer of Record in Ukraine

For foreign businesses, the famously stringent and intricate labor laws in Ukraine may be extremely perplexing. When considering Ukraine as a possible location for future expansion, take into account hiring an Employer of Record there.

Marzuna Ukraine EOR solutions adapt to your growing objectives. We take care of all administrative, payroll, recruiting, onboarding, and other employment-related procedures so you may swiftly and effectively launch and achieve your company’s goals.

Overview of Ukraine

• Estimated Population: 44.39 million (2019)
• Currency: Ukrainian Hryvnia (UAH)
• Capital: Kyiv
• Languages used: Ukrainian and Russian
• GDP: 153.8 billion USD (2019)

Employment In Ukraine

In Ukraine, every employee, regardless of their nationality, is legally required to possess a labor book, which functions as a concise repository of their employment history. The initial labor book is provided by the first employer, and subsequent employers bear the responsibility of maintaining and updating it as necessary. Within this record, you will find essential information such as the commencement and conclusion of employment, career development milestones, workplace alterations, and other pertinent details.

Ukrainian labor laws extend their coverage to all workers within the country, irrespective of their nationality. In the event of any employment-related disputes, Ukrainian jurisdiction is the prevailing authority. However, it’s important to note that there are exceptions to this general rule:

• When there are international treaties in place that specify an alternative applicable law.
• In situations where foreign employers have dispatched their employees to work in Ukraine, specific regulations may come into play.
• Employees working at foreign diplomatic missions or embassies may be subject to distinct rules and regulations.

For both local and foreign employers operating in Ukraine, it is of paramount importance to acquaint themselves with the labor laws and ensure strict compliance. Seeking guidance from legal experts or professional advisors can be invaluable in navigating the intricacies of Ukrainian labor regulations and ensuring a seamless employment experience for all workers.

Entitlements	Explanation
Statutory Work Hours	40 hours per week; 5 days a week
Statutory Employment Rights of workers	Employment contracts are not time-limited. Only a few background checks may be performed due to data protection and privacy laws, and such verifications may only be made with the subject’s agreement. Only with the applicant’s permission can background checks be conducted by third parties.
Categories of Worker	The law in Ukraine does not distinguish between workers. According to an employment agreement, all workers are permitted to work. Civil laws apply to self-employed individuals and contractual workers, whereas employment rules apply to employees.
Employment contract Ukraine & Employment agreement Ukraine	Employment agreements and contracts differ. The former is more flexible, whereas the latter is used to formalise work connections. Terms of service, rights, obligations, and grounds for termination all need to be included in an employment contract. All contracts for employment and other agreements must be written in Ukrainian. Collective bargaining agreements made with trade unions are legally enforceable against all employees and employers.
Changing of employment terms and conditions	Changes to essential terms, such as work hours and pay, can be made by employers, but they must be communicated to affected workers in writing at least two months in advance. The employee’s permission is not necessary.
National Minimum Wages	Every month, the minimum salary in Ukraine is UAH 60,000.
Bonus	In Ukraine, there are no regulations governing bonuses. There are particular caps on salaries for those working in the public sector, nevertheless.
Working Hours	Students between the ages of 14 and 15 can work for 24 hours per week during the summer, while employees between the ages of 16 and 18 can work for 36 hours per week.
Overtime	The use of overtime is only permitted under extraordinary circumstances, according to the legislation, and it should not exceed 120 hours per year for each employee. The hourly salary is doubled for overtime.
Shift workers	For shift employees, the maximum daily work period is 12 hours. Workers cannot work consecutive shifts.
Leave	Annual Leave: Regular employees on payroll are entitled to a minimum of 24 calendar days of annual leave. However, workers under the age of 18 enjoy an extended minimum annual leave of 31 calendar days. Additional Paid Holidays: Certain categories of workers are eligible for additional paid holidays. This includes workers who perform their duties under challenging conditions, employees engaged in special types of production, and mothers with two or more children under the age of 14. Sick Leave: Compensation for sick leave is provided through the Ukrainian State Social Security Fund. Employees who are unable to work due to illness or injury can avail themselves of sick leave benefits. Maternity Leave: Expectant mothers are entitled to 70 paid days of maternity leave before giving birth and an additional 56 paid days after the birth of their child. Furthermore, women employees have the option to take additional unpaid leave until their child reaches the age of three. Paternity Leave: In Ukraine, fathers can also take 14 days of unpaid paternity leave if their wives are on maternity leave. This allows fathers to support their partners and bond with their newborn children.
Paid Holidays	There are 11 public holidays every year. All of these holidays are paid for. These are: 1 January – New Year’s Day 7 January – Christmas (Julian Calendar) 8 March – International Women’s Day 1 May – 2 May – International Workers Day 9 May – Victory Day 28 June – Ukraine Constitution Day 24 August – Ukraine Independence Day Moveable dates – Easter Monday Moveable dates – Pentecost Monday 14 October – Defender of Ukraine Day 25 December – Christmas (Gregorian Calendar)
Employee health benefits in Ukraine	In Ukraine, the state-run social security system offers free benefits to all employees. These benefits, which may be long-term or short-term, cover unemployment, death, pension payments, and disabilities brought on by work illnesses or accidents. Additional employee benefits include retirement, health and life insurance, and personal accident protection. Although Ukraine offers free healthcare, most people do not have enough insurance to fulfil all of their requirements. Since private medical treatment is quite expensive, employees’ medical expenses are covered by optional medical insurance. The insurance premium is paid by the employer.

Contractors vs. Full-time Employees

In Ukraine, the workforce can be categorized into two official types:

• Employees: These individuals are engaged by a company under a formal written employment contract or agreement. Employees enjoy specific rights and privileges, and their employers are responsible for managing tasks such as taxation, accounting, and social security contributions. Ukrainian labor laws govern the working conditions of these individuals. Properly classifying employees is essential to avoid potential sanctions and fines under Ukrainian employment contract regulations.
• Self-Employed Contractors: These are independent professionals, often referred to as solo or private business owners, who have the autonomy to set their own schedules and handle their own tax and financial matters. They operate based on civil contracts, which grant them greater flexibility in terms of working conditions. However, it’s important to note that contractors do not have the same benefits and protections as employees.

Navigating the intricate landscape of Ukraine’s employment and contractual regulations can be challenging. Nevertheless, with the assistance of Marzuna’s flexible Employer of Record (EOR) services, you can simplify the process and focus on your business operations in Ukraine. Marzuna’s EOR services offer comprehensive support in managing employment responsibilities, ensuring compliance with local laws and regulations, and facilitating a seamless entry into the Ukrainian market.

Recruitment in Ukraine

Establishing a Ukrainian subsidiary or representative office opens up opportunities for foreign businesses seeking to hire both local and international talent in Ukraine. It’s worth emphasizing that Ukrainian labor regulations extend equitable treatment to domestic and foreign workers, ensuring that all categories of employees enjoy the same rights and protections.

To streamline the process of hiring local talent in Ukraine, several services are readily available, including popular job platforms like work.ua, glassdoor.com, jooble.com.ua, jobs.ua, rabota.ria.ua, Career Jet, and Learn 4 Good. These platforms are invaluable resources for identifying qualified candidates for your open positions.

As you embark on the hiring process, it’s advisable to start by crafting comprehensive job descriptions. The expertise of leading recruitment agencies in Ukraine can be instrumental in shortlisting eligible candidates. Subsequent to creating the shortlist, you can conduct virtual interviews and, once the selection process is complete, extend offers of employment contracts or agreements while discussing the terms and conditions of employment with the chosen candidate.

For a seamlessly managed hiring and onboarding journey, consider partnering with an Employer of Record (EOR) like Marzuna in Ukraine. Our all-encompassing EOR solution is designed to support your expansion objectives, from recruiting top-tier talent to creating labor contracts and employee benefit packages that align with Ukrainian legal requirements. Contact Marzuna today to learn more about our comprehensive services and value-added offerings.

Probation & Termination

Specifications	Details
Probation	In Ukraine, the usual probationary term for newly employed staff is three months long.The probationary term in Ukraine is limited to three consecutive months under the labour regulations of the country. When the Primary Trade Union Organization agrees, the probationary period in some situations might last for six months.
Termination of employment in Ukraine	Under the following circumstances, termination is allowed in Ukraine: • In a fixed-term agreement, the end of the period is specified in the contract. Voluntary termination requires a two-week notice. Termination may be due to a staff reduction Termination may result from a violation of the labour agreement, the law, or the company’s internal procedures Liquidation In the final two situations, employee reduction and liquidation, the employer must provide two months’ notice. Employees who voluntarily leave their jobs must provide their employers with two weeks’ notice.

EoR Solution

Our Employer of Record (EOR) solution in Ukraine is meticulously crafted to simplify and streamline your company’s operations. Beyond the advantages of cost-efficiency that give your organization a distinct competitive edge, we, as a prominent player in the EOR market, offer a cost-effective solution that aligns seamlessly with your objectives.

Our proficiency in acting as your Employer of Record in Ukraine translates into a comprehensive range of services, from identifying the most qualified local talent to handling the intricacies of HR administrative tasks behind the scenes. We excel in facilitating a smooth onboarding process for your employees while ensuring unwavering compliance with Ukrainian labor regulations. Handling month-to-month responsibilities such as payroll management, salary disbursements, tax compliance, and benefits administration is made effortless through our integrated system.

Recognizing that each client brings their unique needs and growth aspirations, our effective EOR services are tailored to meet your distinct requirements, offering specialized solutions that harmonize with your corporate goals.

Our self-service platform offers top-tier services encompassing data compliance, round-the-clock support, industry-leading services that span the entire employee lifecycle, and more. It acts as a pivotal stepping stone on your path to success. If you’re eager to explore how our services can benefit your company, we invite you to reach out to us without delay.

Types Of Visas In Ukraine

Employing Foreigners	Hiring foreign individuals to work for your company in Ukraine involves the process of obtaining a work visa. However, certain categories of foreign workers are exempted from the requirement of a work visa in Ukraine. These include: Refugees Foreigners holding immigration permits Foreigners with a permanent residence permit Representatives of foreign maritime fleets and airlines in Ukraine Foreigners in need of temporary protection in Ukraine Sportspeople and artists Foreign media employees Clergy members in Ukraine Teachers and individuals from the scientific community teaching at higher education institutes Employees working at foreign representative offices in Ukraine. For these specific categories of foreign workers, a work visa is not necessary to legally work in Ukraine.
Ukraine Work Visa Requirements	Employers are required to apply for work permits on behalf of their workers. The documents needed are a copy of a passport, a copy of an employment contract, a passport-size photo, and evidence that the employer. Copies of academic documents A submission
Types of Work Visas	Transit (B Type) – given to foreigners whose transit through Ukraine lasts no more than five days. Short-term (C Type) – given to foreigners who want to stay in Ukraine for 90 to 180 days. Long-Term (D Type) – given to foreign nationals who apply for a temporary residence visa and intend to stay in Ukraine for a period of time longer than 90 days.

Work Permits

It’s crucial to comprehend that the Employer must apply for a work permit in addition to being aware of the many forms of work permits available in Ukraine. The lack of an online application process for Ukrainian work permits for foreigners presents another difficulty; as a result, a corporate representative must physically visit the State Employment Service of Ukraine to submit the work permit application and supporting documentation.

The work permit can be renewed many times and is issued for the duration specified in the job contract. The processing of the application typically takes seven days. Once your application has been accepted, you will get bank information to pay the work permit charge. When visiting Ukraine, your employee must have a verified copy of the work permit with them. Keep in mind that you need to have a job offer in order to apply for a work visa in Ukraine.

Payroll & Taxes in Ukraine

Payroll taxes paid by employers in Ukraine include payments to the Unified Social Tax of up to 22% of the employee’s wage. This section discusses several employee benefits and social security. A 0.6% unemployment benefit is required from the employee.

Ukraine Payroll Tax Rate

Employer Taxation

Tax	Explanation
Corporate Tax	18%
VAT	20%

Employee Taxation

Tax	Explanation
Income Tax	18%
Military Tax	1.5%

Bonuses

Bonuses, both contractual and discretionary, are common in Ukraine.

Establishing a business in Ukraine can present challenges due to bureaucratic hurdles and the dynamic nature of labor regulations. To ensure a seamless and efficient workflow in Ukraine, it is crucial to leverage the expertise of local professionals who possess an in-depth understanding of the legal landscape and available resources.

The burgeoning Ukrainian economy offers a multitude of opportunities for corporate expansion. A strategic approach involves establishing a domestic holding company. The Limited Liability Company (TOV) framework is the most commonly adopted model for business formation in Ukraine.

Opting for the TOV structure enables businesses to capitalize on limited liability while simultaneously solidifying their presence in the Ukrainian market. This model enjoys widespread popularity among both domestic and international enterprises, thanks to its flexibility and alignment with regional business standards.