Employer of Record in Ukraine

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Ukraine if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Ukraine below, to avoid any compliance issues.

Employment Contract Requirements

When hiring in Ukraine, written employment contracts in Ukrainian are mandatory for both fixed and indefinite terms. The labour law distinguishes between employment agreements, commonly used, and more flexible employment contracts, limited by law. The only formal requirement in employment agreements is specifying probation periods.

Onboarding Process

We can help you get a new employee started in Ukraine quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in Ukraine

The probation period for an employee is determined by their job role. Non-qualified employees have a probation period of 1 month, while specialists and managers undergo a 3-month probation period.

In Ukraine, the standard work week consists of 40 hours spread across 5 days. Employees are generally expected to work eight hours each day

Overtime work is compensated at a rate of 200% of the employee's regular hourly wage. This applies to overtime on weekdays, weekends, and public holidays. Employers must maintain accurate records of overtime hours worked to ensure compliance with these regulations.

Setting up a local legal entity in Ukraine can be time-consuming and expensive. It often involves complex paperwork, local representation, banking, registrations, and ongoing tax filings, which isn't cost-effective if you're simply looking to hire a few employees or test the market. An Employer of Record removes these barriers entirely. Instead of spending months establishing a presence, an EOR lets you hire and onboard employees within days while staying fully compliant.

This enables faster market entry and greater agility. Whether you’re launching a pilot program, supporting a regional client, or adding specialized talent, you don't need to commit to long-term infrastructure to explore new business opportunities. The EOR handles local employment logistics while you retain day-to-day oversight of your hires. This model lets you scale up or down based on business needs, giving you more flexibility with less overhead and risk.

Navigating payroll taxes in Ukraine requires understanding various tax obligations, including Personal Income Tax, Military Tax, Unified Social Contribution, and Single Tax for Individual Entrepreneurs. Employers must ensure timely submissions and accurate calculations to maintain compliance.

Using payroll management software, such as Playroll, can help employers consolidate payroll data and stay compliant in Ukraine.

One of the biggest risks in global hiring is payroll mismanagement. In Ukraine, even small errors in tax reporting or social contribution payments can trigger audits, fines, or reputational damage. For companies without in-country expertise, the risk isn’t worth taking. An Employer of Record removes this burden by owning the legal responsibility of payroll, executing every step with built-in compliance.

Key Ways an EOR Supports Payroll in Ukraine:

• Mitigates Compliance Risk: Oversees all legal obligations for payroll, tax filings, and recordkeeping.
• Local Regulatory Expertise: Interprets and applies Ukraine’s latest labor and tax changes in real time.
• Free Processing: Reduces mistakes in wage calculations and reporting through built
• Payroll Record Management: Maintains compliant payroll audit trails and documentation for each employee.

In Ukraine, most foreign nationals who want to work legally need both the correct visa and a work permit issued by the State Employment Service, usually followed by a temporary residence permit. Common routes include a work permit for employment with a Ukrainian company, a D-type long-term visa (such as a D-04 visa for employment), and a Temporary Residence Permit based on employment. These elements work together: the work permit authorizes the job, the D visa allows entry for long stay, and the residence permit allows you to live and work in Ukraine for the duration of the employment.

Employers in Ukraine typically initiate the work permit process on behalf of the foreign employee, submitting corporate documents, a draft employment contract, and evidence that the role and salary meet Ukrainian legal standards. Once the work permit is approved, the employee applies for the D-type visa at a Ukrainian consulate abroad, enters Ukraine, and then finalizes their temporary residence permit with the State Migration Service. Rules and practice can change, especially in light of security and regulatory developments, so companies should always verify current requirements with Ukrainian authorities or qualified local counsel.

Mandatory Leave Entitlement in Ukraine

The annual leave entitlement in Ukraine is 24 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Ukraine

The following are the 10 recognised holidays in Ukraine in a calendar year:

Paid Time Off in Ukraine

Following six months of continuous employment, employees in Ukraine are entitled to a minimum of 24 days of paid annual leave. This allowance may be extended for minors and those in challenging or hazardous occupations. Additionally, unused leave days can be accumulated for later use.

Maternity Leave In Ukraine

In Ukraine, a pregnant employee is entitled to 126 days of paid maternity leave, with 70 days taken before the expected due date and 56 days after childbirth. The Social Insurance Fund provides compensation for maternity leave at 100% of the employee's average salary. In cases of complications during childbirth or multiple births, maternity leave can be extended to 140 calendar days. Women affected by the Chernobyl disaster are entitled to 180 calendar days (90 days before and 90 days after childbirth).

Paternity Leave In Ukraine

Paternity leave in Ukraine allows fathers to take up to 14 paid calendar days leave within the first three months after the birth of their child.

Sick Leave In Ukraine

In Ukraine, employees are entitled to up to 4 months of paid sick leave. During this period, the employer covers the first 5 days, and reimbursement is obtained from the Social Insurance Fund. The compensation from the Social Insurance Fund varies based on the employee's length of service:

• Less than 6 months of service: based on minimum wage
• 0-3 years of service: 50% of their average wage
• 3-5 years of service: 60% of their average wage
• 5-8 years of service: 70% of their average wage
• More than 8 years of service: 100% of their average wage

Parental Leave In Ukraine

In Ukraine, mothers, fathers, and grandparents have the right to unpaid parental leave, which can be taken after the conclusion of maternity leave and extends until the child reaches 3 years of age.

Bereavement Leave

An employee in Ukraine is eligible for bereavement leave for a maximum of 7 days following the death of an immediate family member.

Marriage Leave

In Ukraine, an employee is entitled to 10 days of leave in celebration of their wedding.

Study Leave

Employees in Ukraine have the right to paid study leave, and the employer provides compensation. The duration of the leave depends on the length of the exam period.

Adoption Leave

A person who has adopted a child has the right to leave in connection with the adoption of a child, provided that the application for the leave is received no later than three months from the date of entry into force of the court decision on the adoption of the child.

Employee benefits in Ukraine combine robust statutory protections with a growing market for competitive, employer-funded perks. As you build your local offering, you should align with Ukrainian labor law first, then layer on supplemental benefits that fit your culture and budget.

Your company will need to budget for generous paid annual leave, extensive maternity protections, and compulsory social security contributions, while considering extras such as private medical coverage or flexible working to stand out in a competitive talent market, especially in IT and professional services.

• Top mandatory benefits include: paid annual leave, paid public holidays, sick leave with temporary disability benefits, maternity and parental leave, and compulsory social insurance contributions
• Leading supplemental benefits include: private health insurance, meal or food allowances, and performance-based bonuses or stock options
• Key legal and tax considerations include: strict compliance with the Labour Code of Ukraine, correct withholding of personal income tax and social contributions on taxable benefits, and maintaining proper documentation to support leave, benefits, and payroll records

In Ukraine, benefits play a central role in attracting and retaining top talent. Employees often expect more than just a paycheck – they're looking for stability, healthcare coverage, pension plans, and other perks that show a company is invested in their well-being. If you're not familiar with what’s standard or required, you risk falling short. An Employer of Record helps bridge that gap by administering a locally competitive benefits package that meets both legal requirements and employee expectations.

An EOR doesn't just check boxes, they make sure your employees receive benefits that are timely, properly communicated, and well-managed from the moment they’re onboarded. From managing healthcare contributions to adjusting for regional differences in leave or bonus entitlements, an EOR acts as both a legal and operational partner. The result is a better employee experience, less administrative burden on your internal team, and greater confidence that your offer is aligned with what top candidates in Ukraine actually want and need.

Termination Process in Ukraine

In Ukraine, at-will terminations are not permitted beyond the probation period. Termination must be justified and based on specific scenarios, such as:

• Voluntary employee resignation
• Mutual agreement
• Unilateral decision by the employer (e.g., probation period, changes in production or labour organisation, intoxication at work, incompatibility with the position, unsuitability for the job, systemic non-fulfillment, or absence from work for over 4 months due to temporary incapacity)
• Contract expiration

Notice Period in Ukraine

The notice period for termination varies depending on the initiator:

• Employer-initiated termination: 2 months notice
• Employee-initiated termination: 14 days written notice
• Mutual agreement: no notice period

Severance in Ukraine

In Ukraine, the severance payment amounts to one month's salary for every 2 years of employment.