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How to Hire Legally in Ukraine in 2022?

All You Need to Know About Employment Agreements, Wages, Taxes, and Contributions to Hire Software Developers Legally in Ukraine.

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An aerial view of Ukrainian capital, Kyiv
An aerial view of Ukrainian capital, Kyiv

In recent years, there has been a significant rise in international investors and businesses venturing into Ukraine. 

The country is a popular destination for IT outsourcing due to its abundant talent supply. Many foreign companies also hire Ukrainians for various project-related work or consulting services. 

So if you want to expand your team, this post will give you an overview of Ukrainian labor laws, taxes, and data protection to hire legally in the country.

Software developers in Ukraine

Typically, Ukrainian developers are proficient in popular coding languages and are part of local Java, PHP, .Net, JavaScript communities. Many programmers are specialized in multiple computer languages.

It is little wonder then that numerous software outsourcing companies, including MNCs, have offices and affiliated branches in Ukraine. 

It makes sense to strengthen your team with Ukrainian IT specialists when you have a limited budget but do not wish to compromise on your project's quality. The tech talent in Ukraine offers high-quality expertise at a reasonable price.

The average annual salary of Ukrainian programmers is approximately $25,000, whereas that of American programmers is roughly $75,000. As you can see, the difference between the two is significant.

Ukrainian developers have vast skills and come with experience in varied industries. So when hiring a developer, you will likely get a seasoned specialist with exceptional soft skills.  

Things to consider when hiring in Ukraine

The basic facts international employers must keep in mind about the Ukrainian labor force and laws governing employment are given below.

Languages in Ukraine

Around 70% or more Ukrainians speak upper-intermediate or fluent English. They have a moderate level of English proficiency, like that in Spain, Italy, Hong Kong, and South Korea. This makes it easy for U.S. and European businesses to communicate and negotiate with Ukrainian developers. 

A man signing an employment agreement
A written employment agreement

Employment agreements in Ukraine

An employment agreement doesn't need to be in writing. Exceptions are made in cases involving minors, employment contracts, and contracts for home-based work. Generally, agreements are formalized by the employer's order and employee's submission.

All employment agreements are categorized as per:

Their term: 

  • An open-ended employment agreement.
  • A fixed-term employment agreement.
  • An employment agreement for the term of the performance of certain kinds of work.

The type of engagement involving labor activity:

  • A part-time employment agreement.
  • A full-time employment agreement.

The type of employer and employee relations:

  • An employment agreement for primary employment, which is usually full-time.
  • An employment agreement for secondary employment, which is usually part-time.

There are also certain employment agreements related to short-term and seasonal work regulated by outdated rules from the Soviet Era.

While there are no obligatory terms to be included in employment agreements as per the Ukrainian employment law, the following terms must be kept in mind while creating an employment agreement:

  • Names of the parties involved.
  • Employment commencement date.
  • Remuneration.
  • Terms of payment.
  • Hours of work.
  • Place of work.
  • Job title or job description.

Ukrainian employment law does not consider any implied clauses. Statutory rules are applied when:

  • Terms in the employment contract do not regulate certain issues.
  • Provisions in the agreement are less beneficial to the employee than legislative rules.

Collective bargaining agreements, rules of internal labor procedures, and other internal procedures may result in additional terms and benefits.

What are the wages and working hours in Ukraine?

The minimum wage for a full-time employee is UAH 6,500/month, which is approximately $231. According to the State Statistics Service of Ukraine, the average salary is UAH 14,045 as of October 2021, which is around $438. In Kyiv, the Ukrainian capital, the average salary is UAH 20,481, roughly $639.

Salary is to be paid monthly in two installments, and the maximum gap between the two installments is 16 days. Salaries cannot be paid in foreign currency; companies registered in Ukraine must pay wages in the local currency, Hryvnia. 

A standard working week length is forty hours -- five working days at eight hours per day. The employer can introduce a six-day working week  in some cases, leading to seven working hours per day.

Employees who work under harmful conditions and are below 18 years can work less than forty hours per week. 

Certain employees such as pregnant women, women whose children are under 14 years, and those who care for sick family members or have disabled children may need a shorter working week. This results in a proportionate decrease in their salary.

Paid time off

All employees in Ukraine are entitled to paid leave for at least 24 calendar days, depending on their workload and health. 

The number of paid leaves change when:

  • Employees are under 18 years - They get 31 days off.
  • Employees have a disability - They get 26 to 30 days off (depending on their condition's severity).

Employers are required to accept their employees' requests for unpaid leave in cases like their honeymoon. Employers also may need to provide unpaid leave for employees' family matters or other pressing issues. Please note that unpaid leave cannot exceed 15 calendar days a year.

According to Ukrainian Labor law, all 11 public holidays are paid. Employees also receive an annual holiday entitlement.

Sick leave

Employees are allowed unlimited paid sick leave until complete recovery or till they are officially declared as disabled to work. Employers are required to pay for the sick leave until the sixth day. After that, employees get a sickness benefit from Ukraine's Social Security Fund. The sickness benefit will be between 50% to 100% of their income.

Maternity leave

Female employees get 126 days of fully paid maternity leave, starting 70 days before their delivery date and extending up to 56 days post-delivery. In case they have significant complications or give birth to two or more children, the maternity leave can be up to 140 paid days, split before and after delivery.

Post-birth, parents of either gender can avail of unpaid parental leave to care for the child until three years. The leave entitlement can be taken from time to time or at a stretch. However, only one parent can receive the leave entitlement.

Parents who choose to adopt a newborn from a hospital get 56 days of paid maternity leave. In the case of multiple adoptions, the leave duration becomes 70 days.

Workday breaks

Employees in Ukraine can take breaks for up to two hours during a workday. The break is not part of the work time and can be taken four hours after a shift begins. Employees cannot work two successive shifts.

Income tax and social security in Ukraine

Employers must pay taxes on behalf of their employees before paying them salaries. Taxes to be paid include: 

  • Personal income tax at 18%, payable from the monthly salary.
  • Military tax at 1.5%, payable from the monthly salary.
  • Social security tax at 22%, payable over the monthly salary. 

The Social Security tax is calculated for a salary base that does not exceed fifteen minimum salaries in Ukraine. 

It is calculated on the amount that does not exceed UAH 55,845. This means an employee's maximum monthly Social Security contribution is UAH 12,285.9 (22% of UAH 55,845).

Hiring process in Ukraine

Ukraine's Constitution and Labor Code covers its workforce of 19.5 million by employee protection and workers' rights. All employees are protected against discrimination with regard to race, religion, sexual orientation, age, and gender expression.

The hiring process varies depending on whether you choose local or foreign employees for your company. For foreign employees, you will require a work permit through a local employment center, and you need to prove that you could not find Ukrainian citizens for those positions. 

Ukrainian residents do not require a permit to work; however, they have to be at least 18-years-old to be employed. Foreign employees require work permits. They are usually for a year and can be extended. 

During the hiring process, the most common questions revolve around minimum wage, guaranteed paid time off, and overtime rates

Virtual interviewing 

International employers usually conduct interviews online when hiring remote employees in Ukraine. The country has fantastic internet penetration rates, so connecting with candidates via online communication channels is easy. When scheduling online interviews, consider the time difference and pick a reasonable time for the candidate and the interviewer.

Legal & background checks

Unlike most countries worldwide, background checks are not pervasive in Ukraine, given its privacy and data protection laws. You need the candidate's express consent to process their data or information. 

Parting thoughts

Do you want to hire in Poland instead? Check out this guide to hire in Poland.

Contact us if you want to hire without the hassles involved in global expansion. We at Starkflow, are here to streamline the entire process of international hiring for you so that you can focus on growing your business.

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