Some of the most important information for foreign investors when considering investment projects in countries concern the cost of labor and employment. We put together here a quick guide to payroll taxes and other employment costs in Ukraine .
In general, the payroll tax structure is similar as in other countries in the region. The social contribution the employer pays from the employees´ gross salary is relatively balanced or lower in comparison with countries in the region. On the other hand, the employee´s income taxes are higher in comparison with neighboring non-EU countries.
For a standard limited liability company the payroll tax structure in Ukraine is as follows (for convenience, we include as example a salary of 1000 units).
Employee´s monthly gross salary in their employment agreement: 1000 units
The company is liable to pay the following taxes:
– Compulsory social security contribution 22 %
Total company cost per month: 1220 units
The employee is liable to pay the following taxes (employer usually takes care of these on the employee´s behalf)
– Personal income tax 18 %
– Compulsory military tax contribution 1,5 %
Total net salary received by employee: 805 units
It is interesting to know that the social contribution of 22 % is capped, which comes into play if an employee is well compensated. Currently the contribution does not have to be paid for the portion of salary which exceeds 15 times the Ukrainian minimum wage (UAH 90 000 or approx. USD 3300 at the moment).
