Absolutely! Employer of Record is your legal gateway to hiring software developers without the complexities of opening a legal entity abroad. Your EOR partner serves as the legal employer of programmers on your behalf, taking care of all the admin functions, like payroll, HR, legal, and benefits management. They also assume full liability for adhering to local labor laws, employment rules, and tax obligations, bearing any potential legal risks.

But make no mistake – you remain the one and only real employer of software engineers. From day one, you manage your team directly and integrate it into your culture and practices. All the bureaucracy? Gone. Legal risks and admin burdens? Off your shoulders. Instead, you focus on what matters the most—developing your software product.

So, an EOR service in Ukraine is simply a means for tech companies to swiftly expand into new markets and hire a development team compliantly. Exactly what tech companies like BigCommerce, People.ai, Dotmatics, and Sift did. With the help of Alcor, an EOR provider for tech, they have seamlessly and securely built fully backed teams of 30+ developers and fast-tracked their product growth.

Expansion abroad usually starts with establishing a local legal entity to hire software developers. In Ukraine, you’d have to go through

• Trade name uniqueness check
• Notary inscription
• Incorporation before authorities (via CNAP or Diia portal)
• Registration with tax authorities
• Registration with Social Security
• Bank account opening

all while navigating local regulations. The business incorporation process in Ukraine usually lasts about 2 weeks, which seems quite reasonable at first glance.

But remember, launching in a new tech market means handling much more: compliance with local labor, tax, and social security laws, managing payroll and benefits. Failing to comply can expose your tech company to hefty fines or even legal actions, putting your expansion plans at risk.

You can delegate these functions to external providers (which adds more management on your side) or choose a single partner who provides EOR, recruitment, and ops in one place.

Alcor’s EOR solution in Ukraine lets you skip entity setup and start hiring your first developers in just 2-3 days after signing and onboarding with us. As a Ukrainian-native company, we know all the ins and outs of local legislation and ensure compliance with mobilization rules, labor & tax laws under our liability shield. Plus, with our vetted candidate pool, you can build a team of 5 Silicon Valley-caliber engineers in just 1 month and start supercharging your product.

The Ukrainian tech industry boasts a tech talent pool of 302,000 software developers. According to DOU, the local community of programmers, 54% of them have over 6 years of experience in the field. 97% of tech professionals in Ukraine hold a higher education degree, while 63% have B2-C1 English proficiency.

With Ukrainian developers, foreign tech companies can enjoy high-quality code for an affordable price. The average gross salary of a senior developer reaches about $61,500. Lead engineers tend to earn around $74,600 per year. The developer remuneration further fluctuates depending on the position and skill set.

When it comes to cooperation types, 57% of Ukrainian developers work on B2B contracts (as FOPs), 19% prefer gig contracts under the Diia.City legal regime (which is especially popular among tech product companies), and 9% employment contracts.

And what about the working format? During the martial law, remote work became a lifeline for Ukrainian developers, as it was the only way to continue working even if they had to relocate within the country or abroad. As of 2025, 68% of Ukrainian developers work remotely, 21% exercise a hybrid format, and only 11% work permanently on-site. Ukrainian engineers are remarkably resilient: most have stable internet and well-equipped home offices, so their work goes uninterrupted despite external turbulences.

Ukraine has revised its employment laws to reflect the circumstances of wartime. Under Law 4412-IX (2025), employers are permitted to suspend employment contracts for a maximum of 90 days during martial law; after this period, the contract resumes unless it remains impossible to continue work. Both employers and employees are required to keep their contact information current to avoid missing official communications.

Another legislative change, Law 2421-IX (2022), established flexible working hour agreements, which provide companies with more adaptability in staffing as workload varies. This arrangement is commonly utilized in the tech sector, but must ensure a minimum number of hours and protections for employees.

It’s also common to draft non-disclosure agreements (NDAs) when hiring developers in Ukraine. They are completely enforceable if properly formulated to safeguard your source code, product information, and proprietary knowledge.

Non-Compete Clauses, in contrast, are more nuanced but still permissible. Unlike neighboring Eastern European jurisdictions, Poland and Romania, where non-competes are more strictly regulated, Ukraine’s legally are less definitive. Courts may invalidate them if they are overly broad (for example, restricting an employee from working in the entire sector for an extended period). It is advisable to keep such clauses short in duration, limited in scope, and backed by compensation.

Mobilization Regulations & Employment

Employers in Ukraine are obligated to adhere to mobilization laws, which consist of:

• Maintaining military records for employees eligible for service;
• Allowing employees to undertake mobilization responsibilities;
• Preserving jobs for employees called to serve (although some wage regulations have been relaxed under martial law).

Non-compliance may lead to fines for the company. So, it’s important to maintain accurate HR records and stay up-to-date with legislative changes.

As a Ukrainian-native entity, Alcor has a status of a critical enterprise for the functioning of the national economy. It grants us the right to book clients’ developers from mobilization, ensuring the continuity of your R&D team’s functioning.

There are two prevalent models for hiring Ukrainian developers: employment agreement and B2B contract.

An employment agreement forms an employer-employee relationship governed by the Ukrainian Labor Code. For employers, this type of employment comes with tax obligations, including paying payroll taxes and social security contributions (SSC), as well as withholding income tax and SSC on behalf of the employee. Additionally, it is full of rigorous working terms and employee termination procedures. That’s where Alcor’s IT EOR in Ukraine can serve as your lifeline in the deep employment waters.

For employees, an employment contract serves as a safety net, securing their salary amount, benefits, working hours, paid time off (PTO), and termination terms. The downside? Their take-home pay is reduced by withholding taxes and can be affected by inflation.

A B2B contract is signed between a hiring tech company and a software developer, establishing a contractor-client relationship under the Civil Code. The programmer must register as a private entrepreneur to provide IT services.

Unlike an employment agreement, in B2B relations, the employer is free from tax obligations, while the contractors handle taxes and social contributions on their own or via an EOR vendor in Ukraine. The reward is typically linked to USD, so inflation and exchange rate swings are not a concern. However, benefits, PTO, and working terms are typically negotiated individually and are usually more restrictive than those outlined in the employment contract.

Ukraine also offers a separate legal and tax regime, Diia.City. It provides favorable tax rates and flexible employment models tailored specifically to the IT sector.

Worker misclassification occurs when a developer engaged on a B2B contract performs duties typically associated with an employee, like working set hours or being under direct supervision.

How is it identified? The local authorities usually examine the genuine working relationship instead of merely the contract language: factors such as control over work hours, reporting structure, exclusivity, provision of equipment, and ongoing dependence to determine “employee” status. Courts and tax inspectors assess the operational reality rather than the terms used.

In case of identified worker misclassification, the company will face the following consequences:

• Taxes & social contributions: If a contractor is reclassified as an employee by the authorities, the company may be responsible for paying outstanding Unified Social Contribution (USC) and income tax that should have been deducted, plus potential court-ordered fines.
• Fine & admin penalties: According to the State Tax Service of Ukraine, fines for undeclared or incorrectly documented employment can be quite substantial, potentially reaching around UAH 201,000 (about USD 5,000) for each unregistered worker in certain situations, and other guidance suggests fines can be several times the minimum wage for each violation.

How to mitigate the risks? Except for using suitable contracts that align with the actual working arrangement and refraining from exercising direct control over your contractors, you should also stay updated on FOP regulation changes. This is where a partnership with a Ukrainian Employer of Record company like Alcor can come in handy.

Our legal team prevents misclassification through result-driven contracts, clear contractor accountability for service quality, and strict invoicing standards. We help your contractors register with tax authorities and manage their tax obligations, ensuring full compliance with commercial laws across Eastern Europe and LATAM.

An employment agreement typically entails tax obligations for both the employer and the employee.

The employer’s share:

1. Social Security Contribution, also known as Unified Social Contribution (USC), constitutes 22% and is not deducted from the employee’s pay. It’s subject to a maximum threshold of 20 minimum salaries, or about $3,774, and constitutes $830.40. Under the Diia.City regime, the same rate is deducted from a min. salary of $41,6 per month.

USC is determined at the national level and collected by the State Tax Service. This tax authority then distributes it among the state-managed social insurance funds, like

• Social insurance,
• Pension,
• Unemployment insurance,
• Occupational accident and disease insurance.

Now, the employee’s share:

1. Personal income tax: 18% or 5% under the Diia.City regime
2. Military Tax: 5%

Both are deducted from the employee’s gross salary.

The second cooperation type, B2B contracting, doesn’t impose a tax burden on the tech company. Developers, who register as individual entrepreneurs (FOP) of the third group, are responsible for covering:

1. Single Tax of 5%
2. Military tax of 1%
3. Social security contributions of 22% from the minimum salary of $125, quarterly.

Cooperation on an FTE (full-time employment) basis requires the employer to calculate and pay taxes and contributions, plus withhold taxes on the part of the employee.

The typical payroll cycle in Ukraine includes:

1. Collection of time/attendance and approval of timesheets (first week of the month).
2. Calculation of gross wages, bonuses, overtime, and benefits.
3. Deduction of employee taxes (PIT, military tax) and withholdings; calculation of employer contributions.
4. Disbursement of net pay (mid-month advance + month-end).
5. Submission of payroll tax calculations and payment of employer liabilities to the state budget.

Payroll and tax management in Ukraine is digital. In this case, you need to:

• Utilize the Diia platform and the Electronic Cabinet of the State Tax Service to file reports, view tax accounts, and make some tax payments.
• Get a qualified electronic signature to submit payroll filings online.

Starting from 1 January 2025, employers need to file reports by the 20th of each following month.

If you want to ensure accuracy, compliance, and timely monthly and tax year reporting, consider partnering with an Employer of Record company in Ukraine, like Alcor. We’ll take care of the payroll and taxes for you, so you won’t have to worry about miscalculations or missed deadlines.

Ukraine is a goldmine of skilled software engineers, offering a competitive advantage without the Silicon Valley price tag. The average senior developer salary here constitutes about $61,520 per year, with the most in-demand tech talents, such as AI Engineers, Cloud Developers, and DevOps Engineers, earning between $69,000 and $72,000.

Even the highest-paid tech experts don’t break the bank in Ukraine. For instance, a senior Site Reliability Engineer gets about $72,000, while an Engineering Manager receives an annual salary of $97,200.

That’s about 51% savings compared to the US. See yourself:

So, how much should you really budget to hire a software developer in Ukraine? To break down the total cost beyond just salary, you need to include:

• annual income of a software engineer,
• taxes, social contributions, and additional payments presupposed by the local labor laws,
• employee benefits package, which typically includes health insurance, professional training, hardware, and corporate merchandise, totaling about $6,350 in Ukraine and $15,400 in the US per developer/year,
• recruitment fee, which is typically 20% in Ukraine and 30% in the US of the senior developer’s gross annual salary.

Have a sneak peek at the figures:

Contact Alcor, your EOR service provider in Ukraine, to get precise payroll calculations for your tech positions and discover your true savings.

When hiring software engineers in Ukraine, as an employer, you must comply with the statutory employee benefits outlined in the Ukrainian Labor Code. They are mandatory for tech specialists working on the employment contract. Failure to provide these benefits may lead to legal troubles, penalties, and fines.

So, what are these statutory employee benefits?

• Social security contributions include retirement, pension, disability, healthcare, sickness, unemployment, and others.
• Annual vacation consists of predetermined paid days off.
• Leaves, including sick, maternal, paternal, parental, and adoption.
• National holidays, including Christmas Day, New Year’s Day, and Independence Day, are specified in the Ukrainian Labor Code.
• Termination protection includes a notice period and just cause.

If you happen to employ a developer who bears the veteran status, you should bear in mind that they are entitled to such additional benefits:

• An additional 14 calendar days of paid leave per year on top of the general vacation entitlement
• 100% compensation of the average salary during sick leave related to general illness or injury; covered by the social insurance system
• Protection from unlawful dismissal (for veterans in certain categories)
• Rights to vocational training, retraining, or professional rehabilitation (for disabled veterans)

There are also supplementary employee benefits, which are optional but good to have if you want to attract top software engineers in Ukraine, like:

• Private medical insurance is a common addition to basic medical coverage, typically covering diagnostics, vision and dental care, emergencies, mental health services, etc.
• Tech courses & English classes to promote professional development;
• Gym membership is offered as a subsidized benefit or is fully paid by the employer.
• WFH setup & Internet allowance, relevant for international dev teams working remotely;
• Stock options are predominantly offered to C-level experts.

According to Ukraine’s Labor Code, the standard workweek in the country is 40 hours, with the possibility of overtime, which should not exceed 4 hours for 2 consecutive days, and 120 hours per year (this limit does not apply during martial law). The overtime compensation amounts to 200% of the regular rate in regular hours and on national holidays.

When you hire software developers in Ukraine, their probation period typically lasts 3 months and can be extended to 6 months with the trade union’s consent.

The successful completion of probation largely depends on the onboarding process. Under martial law, most Ukrainian developers begin their journey online. So, tech companies need to design structured programs with a great emphasis on adaptation and integration.

Here are some common onboarding practices:

• Mentor & buddy system: New hires tend to receive professional and emotional support in the new workplace. The former is handled by a mature team member who explains workflows, shares professional knowledge and experience, and mentors their further development. The latter is provided by a work buddy, who supports their team integration through informal communication.
• Pulse check meetings: In addition to standard 30/60/90 progress reviews, team leads and mentors often schedule current matters calls. They help stay on the same page, resolve issues early, provide guidance, and ensure the new hire feels supported and safe.
• Resilience support: Given ongoing security threats, many tech companies assist new hires with relocation to safer regions in Ukraine, covering housing and travel expenses. On top of standard hardware, developers also get power banks, generators, and backup Internet.

At Alcor, we go the extra mile: not only do we hire Valley-caliber engineers, with 98.6% passing probation successfully, but we also ensure your team has all the necessary equipment to stay connected and productive from day one.

Software developers working on an employment contract in Ukraine are entitled to the following paid time off (PTO):

Annual leave consists of 24 calendar days. Vacation days exceeding 24 days per calendar year may be monetarily compensated upon the employee’s request.

Sick leave: The first 5 days are compensated by the employer; thereafter, the Pension Fund compensates for the entire duration of the sick leave until the employee’s recovery or disability is determined. In both cases, the rate ranges from 50% to 100% of the employee’s average salary.

Maternity leave lasts for 126 calendar days, of which 70 should be taken before and 56 days after childbirth.

Extraordinary paid leave is covered by the employer and includes

• Paternity leave: 14 days,
• Additional parental leave of 10–17 days for 2+ children under 15 or a child with a disability,
• Adoption leave: 56 days;
• Education/sports leave: duration varies by program.

Public holidays in Ukraine include 11 paid days, as per the annual leave entitlements for the year 2025.

When a US-based tech company hires software developers in Ukraine, it should consider visa requirements. To travel on a business trip to the United States, a Ukrainian programmer should obtain a B1/B2 visa, which permits a stay of up to 6 months. It allows business-related activities, such as attending conferences and meetings, participating in short-term training or team-building, and exploring partnerships, but not permanent work in the United States.

To get it, a Ukrainian citizen should

• Complete Form DS-160,
• Pay the application fee of $185,
• Schedule and pass the interview at the nearest U.S. embassy/consulate,
• Prepare the necessary documents, including a valid passport, proof of corporate ties, and financial documentation (such as bank statements and a sponsor letter).

But no need to stress over these visa challenges. Alcor, your Employer of Record service provider in Ukraine, can seamlessly handle all aspects of visas for your software engineers, just like we did for US tech company ThredUP.

The termination of an employee in Ukraine is governed by the labor code, which establishes strict guidelines for the termination process, thereby protecting workers’ rights and posing risks for employers. Luckily, there are EOR companies in Ukrainelike Alcor that serve as your compliance buffer, ensuring a smooth employee offboarding process.

General termination rules:

The notice period depends on the grounds for dismissal; in some cases, a 2-month notice applies, while others require no notice at all.

Local requirements: Employment may be terminated only on specific legal grounds, following all statutory procedures and forms.

Termination payments:

• Compensation for all unused paid vacation days accrued and any outstanding payments.
• Severance payments are applicable in certain cases, ranging from 1 to 6 months of the average salary.

Employees on leave and military service, pregnant women, mothers with children under 3 (or under 6 if home care is needed), and single parents with children under 14 or with disabilities are protected from termination.

Ukraine has been persistently working to make its labor market more inclusive, adapting its labor legislation to the European Union standards. The Code of Labour Laws of Ukraine is forming the foundation for this effort, and it is ensuring equal rights, thereby safeguarding against discrimination in the workplace in terms of gender, age, disability, race, political or religious beliefs, union affiliation, or social background. Safe working environment, equitable pay, and protection from unlawful dismissal are all employee rights.

Amid the war, the country has witnessed new groups of people to grant protection, according to the DEI norms, including:

• Veterans of war: The government provides retraining initiatives, financial grants, and incentives for companies that employ veterans. A new proposed law even recommends tax breaks for firms where a significant proportion of the staff are veterans.
• Internally Displaced Persons (IDPs): Employers hiring IDPs are eligible for government reimbursement covering up to three months’ wages (six months for individuals with disabilities). This initiative not only incentivizes businesses to integrate displaced Ukrainians but also offers IDPs an opportunity to rebuild their lives.

A strong work ethic is the backbone of corporate culture in Ukrainian tech companies. Local developers are committed hard workers who show exceptional programming & interpersonal skills, integrity, and a team-player attitude. With years of experience working with Western clients, Ukrainian business culture is highly aligned with international standards.

These are the key traits of Ukrainian devs that your tech team will benefit from:

• Goal-oriented mindset: Developers show high accountability for meeting deadlines and task requirements, demonstrating exceptional self-organization. They are always willing to go the extra mile to deliver top results.
• Strong sense of ownership: Ukrainian programmers treat your tech product as their own. On top of responsibility and dedication, they also elaborate on ideas to make your product stand out in the market.
• Resilience & adaptability: The war has shaped a tech workforce that can embrace rapid changes, maintain productivity under pressure and tough deadlines, and withstand any turbulence.
• Creative problem-solvers: Living in a tough and changing environment made the Ukrainian engineers inventive in dealing with complex problems.
• Fast adopters of innovation: Quick to learn and implement new technologies and approaches. According to the DOU 2024 report, 85% of Ukrainian developers are actively using AI-driven tools in their work.

Alcor’s Employer of Record for Tech is a 360-degree solution devised for the compliant and seamless hiring of software engineers in Latin America and Eastern Europe.

With no need to open a legal entity, it saves tech companies an average of 3.5 months and tens of thousands of dollars in setup costs. In practice, this means you can skip the red tape and build your own team of 30+ developers in just three months, accelerating your software development and unlocking faster growth.

With our Employer of Record solution in Ukraine, you get more than just HR & payroll:

• Tech-focused: from FTE & B2B cooperation types and tax incentives to R&D deductions and tailored benefits for developers.
• 100% compliance: get shielded with guidance from our lawyers, who are experts in IT law.
• Transparent pricing: one contractually bound fee with no unexpected add-ons; benefit from volume discounts as your team grows.
• Automation with human touch: manage your team easily via our platform while benefiting from the ongoing assistance from a dedicated Customer Operations manager.
• All-in-one place: manage everything in one place, no need for multiple vendors.

But EOR is just the beginning…

You can upgrade it to our software R&D center solution, which includes:

• In-house tech hiring is handled by our 40 recruiters, who headhunt the top 10% of the market developers across LATAM and EE. With our 80% CV pass rate and 2-6 weeks to fill a vacancy, you can scale your team from 10 to 100 engineers in a year.
• Operational support encompasses additional services, including leasing office or co-working space, procuring equipment, setting up IT infrastructure, and employer branding.

The result? A fully backed tech R&D center with a software development team that’s 100% yours from day one.