According to a deputy economy minister of Ukraine, the country’s gross domestic product or GDP growth is expected to slow to 2.7% in 2025 from probably around 3.6% in 2024. Russia’s full-scale Ukraine invasion in 2022 slowed down the country’s economy. 

Millions of people fled the region as cities and infrastructure were bombed. The war, now in its third year, has disrupted supply chains, exports, and logistics. 

Although the economy saw a slight growth in 2023 and 2024 (after a 28% dip in 2022), it is still smaller than it was before the war. So, given the current situation in Ukraine, hiring full-time employees from the country doesn’t seem a good option as ground realities are changing very fast. 

However, you can still hire independent contractors from Ukraine for short-term projects and benefit from them in several ways. 

According to statistics, Ukraine’s software market is thriving, courtesy of USA’s support. According to statistics, the expected revenue for the software market is USD 4.11 billion in 2025, primarily because many Western countries have canceled their contracts with Russian software houses and have awarded them to Ukrainians instead. 

Ukraine, an Eastern European country, has a large pool of skilled professionals. This is particularly true in sectors like IT and software development. These professionals have a strong emphasis on education and overall technical proficiency. According to some reports, the literacy rate in Ukraine is 100%, due to the country’s universal access to education. 

As per the findings of the IT Research Ukraine 2025 report, despite the war, the country has maintained a workforce of 302,000 IT specialists. Among them, 238,000 are residing and working in Ukraine. Besides, more than 43% of IT professionals have more than six years of experience in their respective fields. 

Ukraine’s workforce is also quite affordable. The average salary of a software developer in Ukraine is just USD 3,000 per month.  However, the average salary of the same professional in the USA is around USD 9,320 a month. Therefore, when you hire Ukrainian contractors, you save significant labor costs. 

A large portion of the Ukrainian workforce is proficient in English. This helps make them ideal for smooth communication with international clients. Additionally, Ukraine’s time zone usually aligns well with North American and European businesses, facilitating seamless collaboration. 

So, if you have made up your mind about hiring independent contractors in Ukraine, read this guide to explore the process, relevant laws, and platforms for finding your desired workforce.

Who Are Independent Contractors in Ukraine?

Also referred to as solo entrepreneurs or freelancers, independent contractors in Ukraine are people who work for an organization on a contract basis. They are usually hired through a written civil law agreement with their employer. However, they are not legally subordinated to their employer. 

Independent contractors usually offer services or products to a company or organization. They work on a project-by-project basis while setting their own working hours and rates. 

These contractors use their own tools or equipment. Additionally, they are responsible for their taxes and insurance themselves. 

Considerations When Hiring Independent Contractors in Ukraine

If you plan to hire independent contractors in Ukraine, you must look into unique considerations to make the process hurdle-free. 

  • Classification of Workers: Ukraine doesn’t set a strict distinction between independent contractors and employees. However, separating them is important as each is governed by a different law with varying protections. 
  • Contract: Any worker hired from Ukraine must be bound through a contract. So, if you hire an independent contractor, you must create a service agreement before taking them over for a project. 
  • Labor Laws in Ukraine: Whether you plan to hire employees or independent contractors, you must comply with the labor laws or the civil code to save yourself from unnecessary fines and penalties. 
  • Currency and payments: Ukrainian currency is the Ukrainian hryvnia (UAH). You must make sure to choose the easiest and most affordable option to transfer funds to your hired workforce. 

What Makes Independent Contractors in Ukraine Different from Employees?

In Ukraine, labor law clearly distinguishes between an independent contractor and an employee. An employee is expected to always abide by local labor laws. However, an independent contractor is governed by civil law. 

Additionally, Ukraine’s Labor Code specifies that self-employed contractors do receive the same protections and benefits as employees. For instance, they don’t get minimum wage, paid holidays, and health insurance. 

Here are some major differences between the two categories of workers:

Autonomy

Independent contractors have more autonomy and control over their work than employees. They can manage their working hours and methods themselves. Plus, they aren’t supervised by a subordinate all the time. 

Tools and Equipment

Independent contractors use their own tools and equipment. They also have to arrange their office space themselves. None of these is provided by the employers, unlike in the case of employees. 

Benefits and Protections

An independent contractor in Ukraine doesn’t receive the same level of benefits and protections that an employee gets. For instance, they don’t get paid holidays or the minimum wage rate. All they receive are benefits mentioned in their service agreement. 

Tax Liabilities

Independent contractors are responsible for filing their own taxes. No employer does it on their behalf. Independent contractors also have to make sure to register with the tax authorities in Ukraine. 

Why Is Distinction Between These Two Categories of Workers Important?

A failure to differentiate an employee from an independent contractor can lead to a misclassification of workers. Some companies do it by mistake, while others do it intentionally. In either case, misclassification has serious consequences in Ukraine. 

For instance, if you misclassify an employee as an independent contractor, any money in the form of benefits that was not paid to the worker must be cleared with interest to the victim. 

The employer who had misclassified workers may also be required to pay additional fines or penalties.

Misclassification of workers can also lead to confusion in the rightful ownership of intellectual property or IP. 

This can result in the loss of IP rights as well as long legal proceedings. 

All of this and more can eventually damage the reputation of your company.  You may find it tough to attract investors. Besides, skilled employees or independent contractors may feel reluctant to join your workforce. 

Therefore, it is important to abide by the law and make the right classification. However, if you are unsure about your expertise to do it correctly, you must not think twice to consult a legal firm for guidance. 

Benefits of Hiring Independent Contractors in Ukraine

Hiring contractors in Ukraine for short-term projects may benefit your company in multiple ways.

Independent Contractors are Cost-effective

When you hire independent contractors in Ukraine, you save an ample amount on your payroll costs. For starters, the labor in Ukraine is generally much more affordable than in the UK or USA. 

Additionally, independent contractors are not entitled to benefits and protections like employees are. This lowers the overall labor costs, making independent contractors a good option to hire for companies on a budget. 

Contractors Offer Flexibility

One of the best advantages of hiring contractors is that they bring flexibility to your work methods and schedules. You only hire them as needed, allowing you to scale your workforce up or down as per the demands of the project. 

Moreover, you don’t have to supervise them all the time. This saves you ample energy and time. 

Independent Contractors’ Facilitate Easy Onboarding

The onboarding process of independent contractors is generally simpler and quicker than that of employees. Most of them may not require the initial training based on their experience and expertise. You may also not find the need to connect them with the rest of the company’s workforce because of the individuality of their work. 

Hiring Independent Contractors Gives You Access to Talent

Ukraine has a large pool of highly skilled IT professionals and other specialists who work as successful independent contractors. So, when you hire them, you get an opportunity to access skills and talent that you may not have experienced with full-time employees in your country. 

Additionally, independent contractors can help you get insights into the Ukrainian market and help you create impactful strategies for global expansion if you want to. 

Time Zone Benefit

As stated in the introduction, Ukraine’s time zone easily aligns with both European and North American markets. This helps facilitate convenient collaboration between you, your clients and independent contractors. 

Independent Contractors Get Performance-based Pay

Independent contractors don’t have a fixed salary. Instead, they get paid mostly for their performance. This encourages accountability and high performance, benefiting your business goals. 

Labor Laws of Ukraine

Although independent contractors are governed by the civil code, you still need to understand the labor laws in Ukraine to keep safe from any misclassification. Besides, if you plan to convert an independent contractor to an employee, you should know the laws to do it compliantly. 

Benefits and Rights

According to the Labor Code, the standard work week in Ukraine is 40 hours, with a maximum of 8 hours per day. Overtime is limited to just 120 hours per year and must be paid at a higher rate. 

However, during martial law, employees living in the critical infrastructure can work up to 60 hours per week straight. 

Independent contractors are not entitled to any of these work week hour limitations. They can work for fewer or more hours, depending on their deadlines. 

In Ukraine, all employees are entitled to 24 days of paid leave after six months of employment. The country also provides up to 4 months of paid sick leave, with the first 5 days covered by the employer and the rest of the tenure by the Social Insurance Fund. 

Independent contractors, however, don’t benefit from paid holidays. They can leave work whenever they want but don’t get paid for being sick during their service. 

Minimum Wage

As of January 2026, the minimum wage in Ukraine is 8,647 Ukrainian hryvnia (UAH) per month. All employees are entitled to this wage. An employer faces fines if they fail to pay the minimum wage. 

However, independent contractors, on the other hand, don’t receive the minimum wage. 

Taxes

The standard tax rate of 18% applies to income received as salary by employees. This rate applies to every worker under employment and civil agreements. 

The social security rate in Ukraine stands at 22%. It is mandatory for all employees to contribute their part by accepting deductions made by the employer. 

However, independent contractors have to file their tax returns themselves. No employer deducts the expense on their behalf. 

Similarly, independent contractors are not obliged to pay social security contributions. However, they can always volunteer to make payments to the  State Fiscal Service of Ukraine themselves. 

How to Pay Independent Contractors in Ukraine

Here are some of the ways to manage contractor payments in Ukraine.

Bank Transfers

You can make transfers via the Society for Worldwide Interbank Financial Telecommunications (SWIFT). This method allows you to deposit all the money directly into your independent contractor’s account.  The procedure is safe, secure, and accepted worldwide. However, make sure to account for the transfer fees. 

International Money Orders

There are multiple online money transfer companies, such as Line Wise and Xoom, that specialize in making international payments. But make sure that you understand their transfer fee payments and platform charges to save yourself from unnecessary costs.

Cryptocurrencies

Bitcoin is legal in Ukraine. This means that you can opt for cryptocurrency payments if it proves to be a viable option for both you and your contractor. However, ensure to comply with the Ukrainian tax regulations when choosing this method.

Global Payroll Services

You can also contact a global payroll solution to make payments to your independent contractors on your behalf. They will help you manage their payroll with ease while complying with the local laws. 

How to Find Independent Contractors in Ukraine?

When searching for the best independent contractors in Ukraine, ensure to account for some considerations. 

  • Experience and Expertise: Make sure to check and confirm the work experience of the shortlisted candidates and their expertise properly. This is imperative to prevent mishaps later in the project. 
  • Communication Skills: Your chosen independent contractors should have sufficient English-spoken skills. Plus, they should be open to communicating with clients from all over the world for smooth collaboration. 
  • Legal Compliance: All independent contractors should be legally registered with the tax authorities in Ukraine. You can also check their criminal records, if any, to understand their status and reputation in the region. 
  • Mode and Rate of Payment: Before you choose a contractor, be sure to check their charges using your preferred mode of payment. Both of these should match your budget and convenience for a smooth relationship. 

To look for independent contractors in Ukraine, explore various avenues. 

For instance, Ukrainian job platforms like Work.ua, Jooble and Jobs.ua are quite popular for finding a strong workforce. 

Additionally, you can search for candidates on Fiverr, Upwork and Freelancer. LinkedIn is also a helpful option. 

Alternatively, many global human resource solutions also help provide you with the required workforce. Platforms like Deel, Rippling, and Remote People can help you shortlist candidates according to your skills criteria. 

How to Convert an Independent Contractor to an Employee in Ukraine?

You can easily convert an independent contractor to an employee in simple steps.

1

Evaluate the Need for This Transformation

Before you decide to convert an independent contractor to an employee, ask yourself some questions. 

  • Have the contractor’s duties increased since they joined you? 
  • Do you want to pay statutory benefits to your contractor? 
  • Do you wish to incentivize your contractor to stay with you for a long time? 
  • Do you prefer having additional protection over your company’s IP? 

If the answer to these questions is a ‘yes’, this means that you should consider the role conversion of your worker from an independent contractor to an employee.

2

Propose an Offers

You should now create a proposal for the transition and make sure the contractor agrees to the terms. An independent contractor can disagree on this transformation, so make sure to negotiate terms smartly. 

3

Analyze Organizational Needs

However, if the contractor agrees, curate an employment contract specifying all the benefits, termination clauses and more as per the labor law. It should also have all the terms and conditions of the employment properly stated with the correct details of the employee. Once the contract is ready, make sure to get it signed.

4

Add the New Employee to the Payroll

The new employee should now be added to the company payroll. The new procedure involved paying payroll taxes while complying with the relevant tax regulations elements.

You can also welcome them through an onboarding process that you may have created for the rest of your employees. Besides, communicate the norms of the company so they feel comfortable in your venture. 

Find and Hire Independent Contractors in Ukraine with Remote People

If you want to build a cost-effective and skilled workforce of independent contractors in Ukraine, you’ve come to the right place. 

At Remote People, we can help you find some great candidates in Ukraine within a few days. What’s more, our team at Remote People can pay the contractors on your behalf, so you don’t have to worry about it yourself. 

We will connect you with the right individuals at much-discounted rates than others. So, contact us today for a free proposal. 

Frequently Asked Questions

You must understand the taxes to ensure the correct payment of contractors in Ukraine. You should also choose a payment method that seems convenient for both you and your contractors. 

If you are unsure about the rate of independent contractors in Ukraine, you can consult our team at Remote People for current market rates. 

Yes, you can convert an independent contractor to an employee. However, you will first have to terminate the existing contract and then draft a new employment contract as per labor laws. 

You can pay independent contractors through direct bank transfers or online payments. Additionally, you can hire a global payroll solution for this purpose.