An important aspect of any expansion is sourcing the correct compensation and benefits for employees. First, you have to learn all of Ukraine's compensation laws, then ensure every employee receives the right...
An important aspect of any expansion is sourcing the correct compensation and benefits for employees. First, you have to learn all of Ukraine's compensation laws, then ensure every employee receives the right guaranteed and supplemental benefits. This work is all on top of running a new location in a foreign country.
An important aspect of any expansion is sourcing the correct compensation and benefits for employees. First, you have to learn all of Ukraine’s compensation laws, then ensure every employee receives the right guaranteed and supplemental benefits. This work is all on top of running a new location in a foreign country.
Globalization Partners can help the process through Ukraine compensation and benefit outsourcing. As a global PEO, we can use our existing subsidiary and connections to find top talent for your open positions. Then, we’ll create a Ukraine benefit management plan that will cover all your employees and keep you compliant.
Ukraine Compensation Laws
Ukraine’s minimum wage has increased to UAH 65,000 per month in 2022. Ukraine changes these wages frequently, so it’s important to check for any new wages to ensure you’re staying compliant. If you’re hiring for skilled positions, you can negotiate a monthly salary with the employee.
Any hours over a typical 40-hour workweek are considered overtime and should get paid at 100% over an employee’s normal salary. Employees cannot work more than two hours a day of overtime in two days or more than 120 hours per year. However, these compensation laws can change depending on certain labor agreements.
Guaranteed Benefits in Ukraine
Your Ukraine benefit management plan must include guaranteed benefits required by law. For example, the country celebrates 11 public holidays for which employees get the day off. Employees are also entitled to a minimum of 24 vacation days each year. Disabled employees, caretakers, and individuals over 55 get an additional three days off. Plus, employees can take a maximum of seven days paid for personal situations such as a marriage or death in the family.
Maternity leave is another guaranteed benefit in Ukraine. Female employees get 70 days of maternity leave before the delivery and then 56 or 70 days off after the delivery. Women can also take partially paid leave until their child gets to be three years old. The country does not offer any statutory paternity leave.
Ukraine Benefits Management
When you’re ready to disperse benefits, you need to add supplemental ones into your Ukraine benefit management plan. Ukraine does not have a high-quality public healthcare system, so employees often provide private health insurance coverage. Meal vouchers are another optional benefit commonly provided to Ukrainian employees.
Although Ukraine does not require a 13th-month bonus like other countries, many employees still provide one. This bonus is considered a gratuity, and employees will provide either that or other performance-based bonuses.
Restrictions for Benefits and Compensation
If you do not take advantage of Ukraine benefit outsourcing, you must establish a subsidiary before working in Ukraine. The subsidiary setup process can take months and cost a significant amount of money. With Globalization Partners, you won’t have to establish a subsidiary first. We’ll help you start working in a few days and source all the benefits and compensation you need to encourage employees to stay at your company.
Ukraine Competitive Benefits
To support your company’s growth internationally, you need to balance legal compliance with budget requirements as you build a benefits program. You also want to meet local market standards and be competitive in the region. When you address these considerations, you’ll be able to more effectively build your hiring, recruiting, and retention strategies in Ukraine.
Ukraine Employee Benefits Plans
Engaging your employees is a top priority whenever you’re building a team in a new country. Your company must balance several critical considerations as you develop a benefits plan, including legal compliance and local market standards. Beyond balancing these factors, you also want to demonstrate that you value your employees’ contributions to your team. Taking the time to understand your workers’ top requirements and tailoring your benefits offerings to meet those needs can help you more successfully recruit and retain employees.
You can provide benefits to support your employees throughout various life events and help set them up for success. From coverage to help in a crisis to a company mobile phone or car to meet practical needs, your benefits provisions can go a long way toward supporting your employees’ individual and professional growth.
Some supplemental benefits you could provide for your workers include:
Child care assistance
Gym memberships and fitness events
Employer-sponsored retirement savings
Required Employee Benefits in Ukraine
National labor laws outline specific provisions that you must include in your benefits packages. To stay compliant, you’ll need to provide these mandatory benefits:
Public holidays leave
Additional leave for workers over 55, caretakers, and employees with disabilities
How to Design Your Employee Benefits Program
Your benefits strategy will look somewhat different in every country, as each locale will have unique regulations and market conditions. That said, you can follow some general principles.
1. Set a Budget and Outline Your Goals
Establishing a benefits budget is one of the first steps you’ll need to take. You might opt to set aside a percentage of revenue rather than a specific amount, as doing so will make it easier to scale your offerings as your company grows.
Your program scope and priorities will depend on your company’s goals. Consider how you want to support your employees and what resources you have available. If you want to hire a small core team and focus on retention, you might offer a wider range of supplemental benefits.
2. Explore the Market and Your Competition
If you want your plan to be competitive, you’ll need to research what other companies in your area and industry are offering. You can also explore local employees’ needs during this stage. Talk with them directly about the offerings they value most. Conduct interviews or send out questionnaires to discuss their top concerns and benefits they’d like to have.
3. Build an Employee Benefits Plan
Use your research to inform your benefits planning. Structure your offerings around the requirements, then apply the rest of your budget toward key benefits employees want. As you calculate your program costs, ensure that you factor in cost containment features, employee contributions, outsourcing requirements, and administration expenses.
Average Cost of Benefits Per Employee
Each company will have different benefits program costs based on their location, industry, and other unique considerations. A national average price for benefits administration may not be the most accurate metric for your calculations. Instead, focus on your own resources as you create a budget.
How to Calculate Employee Benefits
You are responsible for providing full pay for vacation and holiday leave. The state’s social insurance fund covers maternity benefits.
For sickness leave, you must pay for the first five days. The social insurance fund will cover any subsequent days.
You can calculate supplementary benefits based on market standards to provide competitive offerings for your employees.
How Are Employee Benefits Taxed in Ukraine?
You must pay a 22 percent tax for each employee as your employer contribution to the social insurance system. The medical insurance premiums you provide are considered part of taxable income for your employees, so you’ll need to withhold appropriate amounts.
Employee Health Benefits Plans
Ukraine does have a public healthcare system that citizens can access. However, private health insurance options are also available, and many companies opt to provide supplemental coverage for workers.
Handle Benefits Planning Confidently With Globalization Partners
At Globalization Partners, we provide tools and resources to help your company grow globally. Request a proposal today.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
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