How to Use An Employer of Record in
Ukraine

Ukraine's Labour Code (Кодекс законів про працю України) requires every employment contract to be registered with the State Tax Service within three days of an employee starting work, and employer social security contributions run at 22% of gross salary in 2026 with strict monthly remittance deadlines to the Pension Fund of Ukraine. An Employer of Record in Ukraine becomes the legal employer of your staff under local law, handling all statutory filings, payroll, and compliance while you retain full operational control and avoid the cost and time of incorporating a subsidiary. The EOR removes the risk of penalties for late tax registrations, miscalculated social contributions, or non-compliant termination procedures under Ukraine's protective Labour Code.

What Is an Employer of Record in Ukraine?

An Employer of Record in Ukraine is a third-party organisation that becomes the legal employer of your staff under Ukraine law, handling all statutory obligations, payroll, and compliance while you retain full operational control. The EOR issues employment contracts, registers employees with the State Tax Service and Pension Fund of Ukraine, withholds and remits income tax and social contributions, and manages termination procedures. You continue to direct your employees' day-to-day work, performance objectives, and role responsibilities.

Under the Labour Code of Ukraine, every employment relationship must be formalised through a written contract that specifies job title, workplace, remuneration, working hours, and mandatory social guarantees. Employers must register each contract with the State Tax Service within three calendar days of the employee starting work and make monthly contributions to the Pension Fund of Ukraine at 22% of gross salary, the compulsory state social insurance at 8.41% covering temporary disability and unemployment, and withhold 18% personal income tax plus 1.5% military levy from employee wages. Collective agreements at sector or enterprise level may impose additional obligations on working conditions, notice periods, and severance entitlements.

The EOR owns all legal employment responsibilities: issuing compliant contracts, registering employees with tax and social security authorities, running monthly payroll in Ukrainian hryvnia, filing statutory reports, and managing terminations in accordance with Labour Code notice and severance rules. You retain complete operational control over your employees' tasks, performance reviews, promotions, and daily management. The employee works for you in practice but is employed by the EOR on paper, ensuring full compliance without the need for your own registered legal entity in Ukraine.

How Does an Employer of Record Work in Ukraine?

When you hire through an Employer of Record in Ukraine, the EOR takes on the legal status of employer under the Labour Code of Ukraine while you retain full operational control over the employee's work. The process involves contract preparation, government registrations with the State Tax Service and Pension Fund, monthly payroll administration, and ongoing compliance with tax, social security, and labour law. Here is how it works from scoping the role to managing terminations.

Step 1: Define Role and Employment Terms

You identify the candidate, agree on job title, salary, start date, and working arrangements. The EOR confirms the salary meets the statutory minimum wage in Ukraine, which stands at ₴8,000 per month as of January 2026. If the role falls within a sector covered by a collective agreement, the EOR checks whether higher wage floors or additional benefits apply. You provide the final terms and the EOR prepares the compliant documentation.

Step 2: EOR Compliance Check

The EOR verifies that the proposed employment terms comply with the Labour Code of Ukraine, including the 40-hour standard working week, maximum 4-hour daily overtime limit, and correct classification of the role as employment rather than contractor status. The EOR confirms the employee is registered for an individual tax number (реєстраційний номер облікової картки платника податків, or RNOCPP) if they do not already hold one. Misclassification or failure to register carries penalties from the State Tax Service and can trigger back-payment of social contributions and fines starting at ₴34,000 per violation in 2026.

Step 3: Employment Contract

The EOR drafts a written employment contract (трудовий договір) in Ukrainian, as required by Article 24 of the Labour Code of Ukraine. The contract must specify: the employee's job title and workplace, salary and payment terms, working hours and rest periods, start date, and social insurance guarantees. Fixed-term contracts are permitted only for specific statutory grounds under Article 23, such as replacement of a temporarily absent employee or project-based work, and cannot exceed five years. The maximum probationary period is three months for most roles, one month for workers, and must be stated in the contract if applied. Both parties sign the contract before the employee starts work.

Step 4: Government Registrations

Within three calendar days of the employee's start date, the EOR submits the employment contract to the State Tax Service (Державна податкова служба України) electronically. The EOR also registers the employee with the Pension Fund of Ukraine (Пенсійний фонд України) and the Social Insurance Fund, reporting the individual's personal tax number, salary, and start date. Late registration beyond the three-day deadline triggers administrative fines and can result in penalties of up to ₴51,000 per employee for the employer under the Code of Ukraine on Administrative Offences. The EOR ensures all filings are completed on time and retains proof of submission.

Step 5: Payroll in Local Currency

Payroll in Ukraine runs monthly, typically with payment on the last business day of the month or the first few days of the following month, and must be paid in Ukrainian hryvnia. The EOR withholds 18% personal income tax (податок на доходи фізичних осіб, or PDFO) and 1.5% military levy from the employee's gross salary and remits both to the State Tax Service by the payment deadline. The EOR calculates and pays employer social contributions: 22% to the Pension Fund and 8.41% to the compulsory state social insurance fund (Фонд соціального страхування), which covers temporary disability, unemployment, and industrial accident insurance. All payments are reported monthly to the relevant authorities using the unified social contribution report (Звіт про нараховані та сплачені страхові внески).

Step 6: Ongoing Compliance

The EOR manages monthly payroll reporting to the State Tax Service, quarterly income tax reconciliation forms, and annual income statements for each employee. The EOR tracks annual leave entitlement, which is 24 calendar days minimum under Article 6 of the Law on Leave, plus additional days for certain categories of workers, and processes leave requests and payments. The EOR maintains records of working time, overtime, and rest periods in accordance with Labour Code Chapter IV and ensures that any changes to employment terms are documented through written amendments to the contract. If collective agreements apply, the EOR monitors updates to wage floors and benefits. The EOR also ensures compliance with the Law of Ukraine on Protection of Personal Data when processing employee information.

Step 7: Termination

Termination in Ukraine is governed by the Labour Code of Ukraine, which requires just cause for dismissal by the employer except during probation or by mutual agreement. Notice periods depend on the termination ground: one month for redundancy under Article 49-2, two weeks if the employee resigns under Article 38, and no notice during probation if specified in the contract. Many sector or enterprise collective agreements extend notice to two or three months for redundancy or restructuring. Severance pay is mandatory for redundancy dismissals and equals one month's average salary, calculated over the 12 months preceding termination, with no qualifying period required. The EOR prepares the termination order, calculates final pay including unused leave, issues the work book (трудова книжка) or electronic equivalent, and submits the contract termination notice to the State Tax Service within three days.

Employment Laws and Compliance an Employer of Record Handles in Ukraine

When you hire through an Employer of Record in Ukraine, they take on full compliance responsibility under the Labour Code of Ukraine, tax legislation, and social insurance laws, so you do not need to build an in-country HR or legal function. The EOR monitors regulatory changes, manages all statutory filings, and ensures your employment practices meet current legal standards.

• Employment Contracts: Every employment relationship must be documented in a written contract in Ukrainian under Article 24 of the Labour Code of Ukraine, specifying job title, workplace, salary, working hours, and social guarantees. The EOR prepares compliant contracts, ensures fixed-term contracts meet statutory grounds under Article 23, and submits each contract to the State Tax Service within three calendar days of the start date. Failure to register a contract on time results in administrative fines up to ₴51,000 per employee under the Code of Ukraine on Administrative Offences.
• Payroll Tax and Income Tax Withholding: The EOR withholds 18% personal income tax (PDFO) and 1.5% military levy from employee gross salary and remits both to the State Tax Service (Державна податкова служба України) by the 30th of the following month. The EOR files monthly tax reports and annual income statements for each employee. Late or incorrect withholding triggers penalties of 25% of the unpaid amount plus daily interest of 120% of the National Bank of Ukraine discount rate, and the employer remains liable for the full tax debt.
• Social Security and Pension Contributions: Employers in Ukraine pay 22% of gross salary to the Pension Fund of Ukraine (Пенсійний фонд України) and 8.41% to the compulsory state social insurance fund, covering temporary disability, unemployment, and industrial accident insurance. The EOR calculates and remits these contributions monthly and submits the unified social contribution report (Звіт про нараховані та сплачені страхові внески) by the 20th of the following month. Non-payment or underreporting results in penalties of 20% of the unpaid amount, enforcement action by the Pension Fund, and personal liability for company directors in cases of deliberate evasion.
• Statutory Leave Entitlements: Employees are entitled to a minimum of 24 calendar days of paid annual leave under Article 6 of the Law of Ukraine on Leave, pro-rated in the first year, with additional days for hazardous work, irregular hours, or specific sectors under collective agreements. The EOR tracks accrual, processes leave requests, and calculates leave pay based on average earnings over the 12 months preceding the leave. Sick leave is paid by the employer for the first five days at 50% to 100% of average salary depending on length of service, then by the social insurance fund from day six, and the EOR submits electronic sick leave certificates (електронний лікарняни) to the Social Insurance Fund within five days of receipt.
• Termination and Severance: The Labour Code of Ukraine permits dismissal by the employer only on specific grounds listed in Articles 40 and 41, including redundancy, misconduct, or incapacity, and requires procedural steps including written notice and justification. Notice periods vary: one month for redundancy under Article 49-2, two weeks for employee resignation under Article 38, and collective agreements often extend redundancy notice to two or three months. Severance pay is mandatory for redundancy and equals one month's average salary, calculated over the preceding 12 months, with no minimum service requirement. The EOR manages all termination procedures, calculates final payments, and submits the termination notice to the State Tax Service within three days to avoid fines.
• Working Time Limits: The standard working week is 40 hours under Article 50 of the Labour Code, with a maximum daily working time of eight hours for a five-day week or seven hours for a six-day week. Overtime is capped at four hours per day and 120 hours per year per employee, and must be compensated at double the regular rate or with time off in lieu. The EOR tracks working hours, ensures overtime limits are respected, and calculates overtime pay in compliance with Labour Code Chapter IV. Breaches of working time rules trigger fines of up to ₴51,000 and can result in inspections by the State Labour Service (Державна служба України з питань праці).
• Health and Safety Obligations: Employers must comply with the Law of Ukraine on Labour Protection, which requires risk assessments, employee training, provision of personal protective equipment, and workplace inspections. The EOR ensures that remote employees receive instruction on safe working practices and that documentation is maintained for inspections by the State Labour Service. Failure to meet health and safety standards can result in fines, suspension of operations, and criminal liability for company directors in cases of serious injury or death. The EOR also arranges mandatory periodic medical examinations for employees in specific categories under Cabinet of Ministers Resolution No. 559.
• Data Protection and Employee Privacy: Processing employee personal data must comply with the Law of Ukraine on Protection of Personal Data, which requires a legal basis for processing, employee consent where applicable, and registration of the employer as a data controller with the Commissioner for Human Rights if processing sensitive categories. The EOR registers as data controller, implements data security measures, and ensures employee files are stored and accessed in accordance with legal requirements. Breaches can result in fines up to ₴34,000 and claims for damages by affected employees under Article 23 of the Law.
• Collective Agreements: Many sectors and large employers in Ukraine operate under collective agreements (колективні договори) negotiated with trade unions, which set higher wage floors, extended notice periods, and additional benefits beyond the Labour Code minimums. The EOR identifies whether a collective agreement applies to your employee's role, ensures compliance with its terms, and monitors amendments. If your company later establishes its own entity and employs more than one person, you may be required to negotiate an enterprise-level collective agreement under the Law of Ukraine on Collective Agreements.
• Work Books and Employment Records: Ukraine has transitioned to electronic work books (електронна трудова книжка) for employees who started work after 2021, but paper work books remain valid for existing employees. The EOR maintains employment records, issues work book entries for contract start, amendments, and termination, and submits electronic records to the Pension Fund of Ukraine. Paper work books must be handed to the employee on their last working day with all entries certified by stamp and signature, and failure to provide the work book on time triggers compensation for lost earnings under Article 235 of the Labour Code.

How Much Does It Cost to Use an Employer of Record in Ukraine?

The cost of using an Employer of Record in Ukraine has two components: the EOR service fee and the statutory employer costs, which are fixed by Ukrainian law and apply whether you hire through an EOR or your own entity. Statutory costs include social security contributions to the Pension Fund of Ukraine at 22% of gross salary and compulsory state social insurance at 8.41%, covering temporary disability, unemployment, and industrial accident insurance. Playroll's EOR service fee starts from $399 per employee per month, billed separately from payroll and statutory costs.

Let's look at an example that includes a base salary and the EOR service fee.

The EOR service fee covers preparation of compliant employment contracts in Ukrainian, registration with the State Tax Service and Pension Fund within the three-day legal deadline, monthly payroll processing and tax withholding, statutory reporting to all government authorities, ongoing compliance monitoring including Labour Code amendments and collective agreement updates, management of leave and sick pay, and termination procedures including notice calculation and severance. Playroll's transparent monthly pricing means you know exactly what you pay with no hidden setup fees or exit charges.

Employer of Record vs Setting Up an Entity in Ukraine

The decision between an Employer of Record and setting up your own legal entity in Ukraine depends on your hiring timeline, budget, and long-term presence plans. Foreign companies typically establish a limited liability company (товариство з обмеженою відповідальністю, or TOV) in Ukraine, which requires a registered office address, a local director or authorised signatory, and registration with the State Registration Service of Ukraine. The full incorporation process, including notarisation of founding documents, tax and social security registration, and opening a corporate bank account, takes eight to twelve weeks and costs between $5,000 and $10,000 depending on legal and accounting fees.

For companies hiring fewer than 10 employees in Ukraine, an Employer of Record is almost always the faster and more cost-effective route.

Playroll also supports your long-term growth through its Global Entity Setup product, which handles entity incorporation and local payroll in 120+ countries, so you can transition from EOR to your own compliant entity in Ukraine when the time is right, without switching providers or rebuilding your HR processes.

How Long Does It Take to Hire Someone in Ukraine Through an Employer of Record?

Hiring an employee in Ukraine through an Employer of Record typically takes 10 to 15 business days from the moment you agree on employment terms with your candidate to the employee being fully registered and on payroll.

• Stage 1: Contract preparation and signing (2 to 3 business days): The EOR drafts a compliant employment contract (трудовий договір) in Ukrainian, incorporating all mandatory clauses under Article 24 of the Labour Code of Ukraine and any applicable collective agreement terms. Timing depends on how quickly you and the employee review and return signed copies to the EOR.
• Stage 2: Government registrations (3 to 5 business days): Within three calendar days of the employee's start date, the EOR submits the employment contract to the State Tax Service (Державна податкова служба України) and registers the employee with the Pension Fund of Ukraine and Social Insurance Fund. Starting work before registration is complete exposes the employer to fines up to ₴51,000 per employee under the Code of Ukraine on Administrative Offences, so the EOR ensures all filings are submitted before day one.
• Stage 3: Payroll configuration and first cycle (3 to 5 business days): The EOR configures the employee's payroll profile, sets up bank details for salary payment in Ukrainian hryvnia, and schedules the first pay cycle, which typically runs monthly with payment at the end of the month or within the first few days of the following month. The employee receives their first payslip once the cycle closes, showing gross salary, 18% personal income tax and 1.5% military levy withholdings, employer contributions, and net pay.
• Stage 4: Ukraine-specific requirements (runs in parallel): If the employee does not already hold an individual tax number (RNOCPP), the EOR or employee must apply for one through the State Tax Service, which adds two to five business days. Most Ukrainian residents already have a tax number, so this step rarely extends the overall timeline. Remote employees may need a signed addendum to their contract specifying remote work conditions under Labour Code Article 60-2, which the EOR prepares alongside the main contract.

Delays can occur if the candidate lacks a valid tax identification number, if collective agreement terms require additional approval steps, or if the employee needs a medical certificate for roles subject to mandatory health checks under Cabinet of Ministers Resolution No. 559. Public holidays in Ukraine, such as Independence Day on 24 August or Constitution Day on 28 June, may also extend timelines by one or two business days if they fall mid-process.

By comparison, incorporating your own limited liability company (TOV) in Ukraine and setting up compliant payroll takes eight to twelve weeks, meaning the EOR route is six to eight times faster for your first hire.

How Playroll's Employer of Record Process Works in Ukraine

Playroll makes hiring in Ukraine straightforward by becoming the legal employer of your team under the Labour Code of Ukraine while you retain full operational control over their work.

1. You define the role and terms

You tell us who you want to hire, their job title, salary, start date, and any specific working arrangements. We confirm the salary meets the statutory minimum wage of ₴8,000 per month in 2026 and check whether a sector collective agreement applies to the role.

2. We prepare a compliant employment contract

Playroll drafts a written employment contract (трудовий договір) in Ukrainian under Article 24 of the Labour Code of Ukraine, including all mandatory clauses such as job title, workplace, salary and payment terms, working hours, and social insurance guarantees. We also ensure probationary periods do not exceed three months and that fixed-term contracts meet the statutory grounds under Article 23 if applicable.

3. Your employee is onboarded and payroll goes live

Within 10 to 15 business days, Playroll registers the employment contract with the State Tax Service (Державна податкова служба України) and the employee with the Pension Fund of Ukraine and Social Insurance Fund, all within the three-day legal deadline before the start date. Your employee begins work, and Playroll processes their first monthly payroll in Ukrainian hryvnia, withholding 18% personal income tax and 1.5% military levy and remitting employer contributions of 22% to the Pension Fund and 8.41% to social insurance.

4. Playroll manages ongoing compliance and growth

Playroll handles all recurring statutory filings to the State Tax Service, quarterly tax reconciliation, and annual income statements, tracks annual leave and sick pay entitlements, and monitors changes to the Labour Code and collective agreements. If your hiring grows to where a local entity makes sense, Playroll can support that transition through its global entity setup product, so you stay with one partner from first hire to full in-country operations.