Starting from the 1st of January 2020, Ukrainian Parliament has increased the amount of minimum wage and minimum living wage in accordance with the new Law of Ukraine “On the State Budget of Ukraine for 2020”.
In 2020, the gross minimum wage for a Ukrainian citizen amounts UAH 4,723. This means that employer has to pay minimum of:
- UAH 1039.06 as social security tax to Tax Office (22 % on the top of the salary);
- UAH 850 as personal income tax to Tax Office (18 % from the gross salary);
- UAH 70,85 as military tax to Tax Office (1.5 % from the gross salary);
- UAH 3,802.01 as net salary to the employee (UAH 4,723-UAH 850-UAH 70,85).
In total, monthly burden for 1 employee amounts minimum UAH 5,762.06 (gross salary UAH 4,723 plus social security tax UAH 1039.06)
Please note that standard minimum wage of foreign employees (with some exceptions, which include IT professionals, business owners, employees of a representative offices, for which minimum salary is the same as for a Ukrainian citizens) amounts 10 minimum wages for a Ukrainian citizens, which is UAH 4,723*10, namely – UAH 47,230. Which means that:
- UAH 10,390.60 as social security tax to Tax Office (22 % on the top of the salary);
- UAH 8,500 as personal income tax to Tax Office (18 % from the gross salary);
- UAH 708,50 as military tax to Tax Office (1.5 % from the gross salary);
- UAH 38,020.1 as net salary to the employee (UAH 4,723-UAH 850-UAH 70,85).
In total, monthly burden for 1 foreign employee amounts minimum UAH 57,620.60 (gross salary UAH 47,230 plus social security tax UAH 10,390.60)
Increase of minimum wage will also influence the amount of minimum social security tax payable in 2020 by private entrepreneurs on a Simplified Tax Scheme. According to law, the minimum amount of social security tax amounts 22 % of minimum wage set forth for the 1st of January of each year. Therefore, in 2020 minimum social security tax for private entrepreneurs amounts UAH 1039.06 / per month.
Additionally, as per the Law of Ukraine “On the State Budget of Ukraine for 2020, minimum living wage was increased to UAH 2102. Please note that minimum living wage is taken into account while calculating various payments to state budget, including number of fees for government services, including:
- Amendments to Companies Register:
- UAH 630.60 (0.3 living wages) – fee for registration of amendments to the State Register of Legal Entities, Private Entrepreneurs and Public Formations in respect of Companies;
- UAH 210.2 (0.1 living wages) fee for registration of amendments to the State Register of Legal Entities, Private Entrepreneurs and Public Formations respect of Private Entrepreneurs.
- Work permit government fees:
- UAH 4,204 (2 living wages) – government fee for issue of work permit for the period up to 6 month;
- UAH 8,408 (4 living wages) – government fee for issue of work permit for the period from 6 months and up to 1 year;
- UAH 12,612 (6 living wages) – government fee for issue of work permit for the period from 1 year and up to 3 years.
- Other government fees and penalties as defined by respective legislation.
Should you have any further questions or require assistance, please do not hesitate to contact us.