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Calculation of IT contractor employment costs in Ukraine

Nowadays IT / Telecom industry faces a strong need for workforce flexibility as projects with different duration increasingly require involving remote project teams rather than hiring in-house staff.

It results in IT companies placing more and more contractors at their worksites in different countries continuously requiring compliant contractor personnel employment solutions worldwide.

Given this fact, awareness of costs of employing IT / Telecom specialists in particular countries is crucial for both IT / Telecom companies and service companies rendering HR services for IT / Telecom field.

To provide you with this information, we have prepared for you an overview of costs of employing an IT Specialist in Ukraine. You will find it below. To give you a full picture of employment costs in 33 countries in Eastern and South-Eastern Europe, ex-Soviet Union plus Central Asia that we cover we have completed FREE Country Brief. The Brief will save you hours of work necessary to calculate employment costs in each particular country.

So, here’s an example of IT Specialist employment costs calculation.
Imagine you need to hire an IT specialist in Ukraine whose gross salary is USD 3000 or UAH 69 447,66. In this case, both the employer and the employee are subject to social and income taxes given below.

Employer’s obligations:

  • Social tax – 36.77% of gross salary
    The cap to the amount of all social taxes – UAH 23 426 (USD 1012.35)

Of UAH 69 447,66 only UAH 23 426 will be subject to tax charge
23 426*36.77% = UAH 8 613.74 (or USD 372.10)

So, employer’s costs will be 69 447,66 + 8 613.74 = UAH 78 061.4, or 3 000 + 372.1 = USD 3 372.1 per month

Employee’s obligations:

  • 1. Single Social Payment – 3,6%
    The cap for all social taxes – UAH 23 426 (USD 1012.35)
    23 426*3.6% = UAH 843.34 (USD 36)
    (without cap it could be UAH 69 447,66*3.6% = UAH 2500.11 (USD 108.04))
  • 2. Personal Income Tax – 15%
    a) 15% of gross salary if it is lower than Personal Income Tax Cap that amounts to UAH 12 180 (USD 526.36)
    15% is withheld only from UAH 12 180 (USD 526.36) if gross salary exceeds this Personal Income Tax Cap
    So, personal income 15% tax will be
    15%*12 180 = UAH 1 827 (USD 79) (without cap it could be UAH 69 447,66*15% = UAH 10 417.15 (USD 450.18)

    b) 20% of gross salary – Single Social Payment (3.6%) – Income Tax Cap
    So, personal income 20 % tax will be
    20%*(69 447,66 – 843.34 – 12180) = UAH 11 284.86 (487 USD)

  • 3. Military tax – 1,5%
    69 447.66*1.5% = UAH 1041.71 (USD 45)

After all the deductions have been made, the employee’s net salary will be
69 447,66 – 843.34 – 1 827 – 11 284.86 – 1041.71 = UAH 54 450.75 (or USD 2 352.16)

So, employer’s costs will amount to 3000+372 = USD 3 372.
Employer’s obligations in Ukraine
So, IT specialist’s net salary will amount to 3000-36-79-487-45 = USD 2352.
Employee’s obligations in Ukraine
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