Payroll in Ukraine 2026: income tax, military levy and USC

In Ukraine the employer withholds 18% personal income tax (PDFO) and the 5% military levy from each employee's gross salary and pays them to the budget when the salary is paid. Employees pay no social contributions: the employer pays the single social contribution (USC, ЄСВ) of 22% of gross pay on top.

Payroll in Ukraine at a glance

Social contributions: the single social contribution (USC)

Ukraine's state social insurance is funded by one contribution, the single social contribution (єдиний соціальний внесок, ЄСВ), set by the law on the collection and accounting of the single contribution. For employees it is paid only by the employer, on top of gross pay, and it is collected by the State Tax Service.

If a full-time employee's pay for the month is below the minimum wage at their main job, the employer still pays USC on a base of one minimum wage. The monthly base is capped at a multiple of the minimum wage; check the cap that applies to the month with the State Tax Service before you pay a high salary. For most salaries the cap makes no difference.

USC is not deducted from the employee's pay and it does not reduce the base for PDFO or the military levy. Taxes and contributions can be paid through the taxpayer's unified tax account.

Personal income tax and military levy on salaries

The employer is the tax agent. It calculates PDFO and the military levy on each employee's gross salary, withholds them at source and pays them to the budget at the time the salary is paid.

Ukraine taxes salaries at a flat rate rather than in bands, so for most employees 23% of gross pay is withheld.

Military levy and martial law. Law No. 4015-IX raised the military levy for individuals from 1.5% to 5% from 1 December 2024. After martial law ends, the rate for individuals returns to 1.5% from 1 January of the following year. Military personnel and certain defence and security employees keep paying 1.5%.

Diia City. Qualifying remuneration paid by a Diia City resident company is taxed at 5% PDFO and 5% military levy instead of 18% and 5%. Check the conditions before you apply these rates.

Minimum wage and mandatory pay

• Minimum wage: UAH 8,647 a month from 1 January 2026, up from UAH 8,000, which applied from 1 April 2024 to 31 December 2025.
• Minimum USC: for a main job the employer pays USC on at least the minimum wage, UAH 1,902.34 a month in 2026.
• Extra pay: Ukrainian law does not require a 13th salary; bonuses and annual premiums depend on the employment contract, the collective agreement or the employer's pay rules.

The minimum wage also drives other payroll figures, such as the minimum USC and the cap on the USC base, so update it in your payroll settings when it changes.

Payroll calendar and filings

• When the salary is paid: withhold PDFO and the military levy and pay them to the budget at the time of payment.
• Every month: calculate the USC on each employee's pay, at least on the minimum wage for a main job, and pay it.
• Every quarter: file the tax calculation of income paid to individuals, the PDFO and military levy withheld and the USC accrued, broken down by employee, within 40 calendar days after the end of the quarter, like other quarterly returns.
• Payments: PDFO, the military levy and USC can be paid through the unified tax account.

Keep the records behind each payslip, including the accrual and payment dates, because the tax is due when the salary is actually paid.

Worked example: UAH 30,000 a month

A single employee in Kyiv with no children, at their main job, paid UAH 30,000 gross a month. The employer is not a Diia City resident.

The salary is well below any cap on the USC base, so USC applies to the full UAH 30,000. For an employee whose pay for the month at their main job is below UAH 8,647, the employer would still pay USC of UAH 1,902.34.

Common mistakes

1. 1Withholding the old 1.5% military levy: since 1 December 2024 the rate for employees is 5%.
2. 2Deducting the USC from the employee's pay: the 22% is the employer's cost on top of gross salary.
3. 3Forgetting the minimum USC for a main job when an employee's pay for the month at their main job is below the minimum wage.
4. 4Applying Diia City rates to pay that does not qualify, or to a company that is not a Diia City resident.
5. 5Paying the tax late because it is treated as a monthly liability: PDFO and the military levy are due when the salary is actually paid.
6. 6Missing the quarterly tax calculation or filing it without the breakdown by employee.

How Clientlly helps

Clientlly does not ship a built-in payroll profile for Ukraine. An administrator enters Ukraine's payroll rates once in the payroll tax settings: the income-tax rate (with the military levy), the personal allowance, the employee and employer contribution rates and the minimum wage. Clientlly then calculates gross to net and the employer contributions and produces payslips for each employee.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and keeps HR documents, and attendance and time tracking records working hours and overtime. To close the books after the payroll run, see our month-end close checklist.