Payroll taxes in Ukraine in 2026: income tax, levy and social contribution
What an employee on UAH 30,000 actually costs
A gross salary of UAH 30,000 means three different numbers. The employee receives UAH 23,100. The state takes UAH 6,900 in withholdings. And the company spends UAH 36,600, because the unified social contribution is paid on top of the salary, not out of it. The gap between what the employee sees in the contract and what leaves the company account is 22 per cent.
Three payments and who pays them
Two taxes are withheld from the employee. The third is paid by the employer on top.
- Personal income tax, 18 per cent. Withheld from gross salary. On UAH 30,000 that is UAH 5,400.
- Military levy, 5 per cent. Also withheld from the employee. It is calculated on the gross amount, not on what remains after income tax: on UAH 30,000 that is UAH 1,500, not UAH 1,230.
- Unified social contribution, 22 per cent. Paid by the employer on top. It is not withheld and does not reduce net pay. On UAH 30,000 that is UAH 6,600 of company cost.
Getting the military levy base wrong is common: the levy is calculated on the amount after income tax, and the company underpays every month. Over a year, for a single employee, that is more than three thousand hryvnia of arrears plus penalties and interest.
When to pay and what to file
Income tax and the military levy are transferred at the same time as the salary payment. If salary is accrued but not paid, the taxes are still due within the deadline set for the monthly period. The social contribution is due by the 20th of the following month.
There is a single return for all three payments: the combined payroll return covering income tax, the military levy and the social contribution is filed quarterly. It lists each employee separately, so any gap between the payroll records and the filed return is visible to the tax office immediately.
Where companies usually get it wrong
The same few mistakes appear on most of the companies we review.
- Salary below the statutory minimum on full-time employment. The social contribution is still calculated on the minimum, and the difference is assessed.
- Payments not treated as salary: gifts, rent paid to an employee, tuition, various compensations. Some are taxable and some are not, and the line is not obvious.
- Contracts with individual entrepreneurs whose actual work looks like employment. On inspection these are reclassified and taxes are assessed for the whole period.
- Sick pay and holiday pay booked in the wrong month, which distorts both the return and the average earnings calculation.
What to do about it
With a small headcount and uniform payments, an in-house bookkeeper handles payroll without much risk. Difficulty starts where there are performance bonuses, business trips, staff split across several projects, or a foreign shareholder who needs personnel costs presented in group reporting.
We have run payroll and HR records since 2000. Checking whether earlier periods were calculated correctly is separate work: we review past accruals and show where arrears exist, before the tax office finds them.
Can the social contribution be reduced
There is no lawful way for an ordinary employer to lower the 22 per cent rate. Reduced rates apply to specific categories, for example companies employing people with disabilities. Other arrangements, in particular moving staff onto individual entrepreneur contracts, are reclassified as employment on inspection, with taxes assessed for the whole period.
Is the military levy calculated before or after income tax
Before. Income tax and the military levy share the same base, the gross accrued income. On a salary of UAH 30,000 the employer withholds UAH 5,400 of income tax and UAH 1,500 of levy. Calculating the levy on UAH 24,600, the amount left after income tax, is wrong, and it is one of the most frequent errors.
Are taxes due if salary is accrued but not paid
Yes. The obligation arises for the month of accrual, regardless of actual payment. The social contribution is also charged on accrued salary. Delaying payment does not defer the taxes.
Can salary be below the statutory minimum
On part-time employment yes, and salary is then proportionate to hours worked. But the social contribution is in most cases still calculated on the full monthly minimum. So there is no saving on the contribution, and the difference has to be paid.
How can we check whether past payroll was correct
We need payroll registers, timesheets, orders and the combined returns filed for the period. We reconcile accruals against the bases, check the rates applied and the limits for the social contribution, and produce a list of discrepancies with amounts. Where arrears exist, correcting them before an inspection costs less than after one.
Tell us your headcount and whether there are payments beyond base salary: bonuses, travel, compensations. A proposal follows once we have reviewed the task.