Published 23 May 2019. Some rules have changed since; ask us for the current position.
Employment issues are a pressing problem in Ukraine: the Labour Code (KZpP) is breached more often than any other law. Wages paid entirely off the books are rare, but hiring staff officially on the minimum wage and paying the rest informally still happens. Late payment of earned wages is also common. Anyone who works as an employee should know how to protect themselves. Accountants, in turn, are required to calculate compensation for late wage payments correctly. An employer that complies with Ukrainian law initiates these additional payments on its own.
How is compensation for late wages calculated?
An employee is entitled to compensation when wages are paid late. It is calculated using a set formula that takes into account inflation and the consumer price index. A tax adviser can help you calculate the compensation. Remember that compensation for late payment of wages is recorded in the accounts and:
- is subject to personal income tax (PDFO);
- is included in the base for charging and withholding the unified social contribution (YeSV);
- counts as a business expense.
The company's director, accountant or chief accountant may face disciplinary, administrative or criminal liability for late payment of wages and failure to pay compensation for the delay. The last two types of penalty can only be imposed by a court.
How an auditor can help with compensation for unpaid wages
Contact the specialists at Key Solutions audit firm for help with calculating and paying compensation to employees for late wages, an issue that is often complex and disputed:
- submit a request on our website,
- send us an email,
- call us on the number shown.
Our team will help you resolve the matter in line with Ukrainian laws and regulations. Paying wages on time is part of a business's reputation, so if you have had to delay them, make the required payments promptly. That way you keep your staff and avoid court disputes and possibly criminal liability. Always look for ways to pay wages on time, for example by optimising your tax arrangements.
Our services
- Key Solutions: outsourced accounting services. You pay only for the services you actually need.
- A full package of accounting services for IT companies, with full or partial support.
Comments