Hire in Ukraine

Challenges of Hiring in Ukraine

Despite the advantages, there are quite a few challenges that you are likely to encounter when you hire in Ukraine. They include,

1. Tackling employment laws

The labor landscape of Ukraine consists of a detailed legislative framework comprising various statutes and regulations. It has clauses like the following.

• In Ukraine, yearly paid leave must include at least twenty-four days for employees.
• In Ukraine, overtime work is paid double the employee's base pay.
• Anybody wanting to end their employment contract must give at least 14 days written notice.
• In Ukraine, a probationary term lasts for three months. 

It can often become overwhelming for enterprises to decode these specific employment regulations and maintain compliance. 

2. Complexities in payroll and tax processing

Ukraine has a complicated payroll system in place, with various rules related to social security contributions, income tax rates, overtime compensation, and more. 

• Unique Social Contribution is a type of tax borne by companies in Ukraine on behalf of their employees.
• The introductory rate has been set at 22% of employees' total job earnings. 
• The standard income tax rate in Ukraine is 18%. In addition, there is a 1.5% military tax, which is applied to most taxable income. 

To understand these different policies in Ukraine, you need proper payroll law expertise and a powerful payroll solution. However, both these facilities come at a significant cost of money and energy. 

3. Unavailability of trained employees

Although remote employment in Ukraine has many advantages, it can often be overwhelming for many companies. This is primarily because,

• Businesses operating in Ukraine have consistently faced challenges due to a shortage of trained staff.
• A recent study found that up to 74% of Ukrainian businesses struggle to fill positions. 
• Previously, in 2023, this percentage was at 55%. 
• Some main reasons for this talent shortage include employees’ need to work remotely, burnout, employee fatigue, and the outflow of qualified personnel abroad.

How to Hire in Ukraine

You can hire in Ukraine in three main ways. They include,

• Setting up a local entity
• Hiring employees via EOR and
• Hiring contractors via AOR. 

Let’s take a look into these extensively:

Setting up a local entity

• One of the best ways to expand globally is to establish a formal business presence in the country you wish to hire. 
• It allows you to operate legally in a foreign land, meaning you can hire and manage the employment relationship directly. 
• However, setting up a local entity is an extensive cost process requiring significant capital, time, and other resources. 

Hiring employees via EOR

• An employer of record hires candidates on your behalf in the country you are interested in. 
• They become the legal employer, meaning they handle payroll, contracts, onboarding, compliance, employee benefits, etc. 
• It allows flexibility and scalability, both of which are crucial for the growth of any business.

Hiring contractors via AOR

• Partnering with an AOR is one of the most effective ways to hire contractors in Ukraine.
• They primarily manage and engage international contractors, including compliance, payroll, and classification. 

Costs of Hiring in Ukraine

The various expenses associated with hiring staff in Ukraine are something you should consider before making the decision.

However, please be aware that the costs associated with the hiring process may vary depending on your application method. Let's examine this thoroughly.

It can be challenging to understand the costs of hiring employees in Ukraine while maintaining accuracy. Try Skuad’s country cost calculator, for detailed insights into employment expenses.

A Brief about Employment Laws in Ukraine

Employment laws in Ukraine can be categorized into the following types. They are namely,

• The Constitution: The fundamental law of Ukraine establishes the liberties and rights of every citizen.
• The Labor Code: It is a specific legal law that addresses many different facets of the job relationship, including pay, hours worked, overtime, and leave regulations, among other things.
• The Law on Employment: It addresses all legal aspects related to promotion in employment. 
• The Law on Collective Agreements: It lays down all the necessary guidelines for developing, implementing, and monitoring collective contracts. 

Compliance with all these relevant legislations is of utmost importance when you hire in Ukraine.

Hire in Ukraine with Skuad

With experience in more than 160 nations, Skuad is one of the most sought-after options for hiring internationally. Its platform integrates all facets of the job lifecycle, allowing you to conduct all your HR and payroll management work from one location.

What’s more? Skuad also has some robust features that allow you to digitally onboard new candidates within days. 

From sending contracts to collecting relevant documents and issuing work devices, Skuad handles all critical tasks while ensuring 100% compliance with local labor laws. 

We offer 24/7 customer service! Our specialists are here to help you around the clock, whether you need technical support or assistance with anything else.

Get in touch with us right away to use Skuad to advance your global hiring process!

FAQs

Q1: Can I employ a Ukrainian citizen?

Ans: Yes, employment opportunities can be offered to Ukrainian citizens. As an employer, you can hire them as full-time or part-time employees. 

Q2: What is the minimum wage in Ukraine?

Ans: Ukraine's current national minimum wage is UAH7,100.00 monthly.

Q3: What is the difference between contractors and employees in Ukraine?

Ans: An employee is a person who is paid a salary and receives other benefits while working within particular guidelines established by the company. A self-employed person who performs services for a client under the terms of an agreement or contract is known as a contractor.

Q4: What is the payroll tax in Ukraine?

Ans: The standard income tax rate in Ukraine currently comprises 18%. Furthermore, there is a 1.5% military tax, which is applied to most taxable income.