Outsourcing Payroll
in Ukraine
Get your managed software team with payroll, office, and procurement in Ukraine in 2-3 months. We guarantee:
- Employer of Record serviceโno need to set up your own entity
- Tech contractorsโ management: payroll, taxes, documents, employee benefits, onboarding/offboarding
- Guaranteed legal compliance with local laws
- Individual account management support
- 100% transparent & predictable pricing
Poland
Romania
Ukraine
Bulgaria
Mexico
Argentina
Chile
ColombiaYour Own Up-and-Running Operated Tech Team in Ukraine
Seamless Payroll Outsourcing Experience in Ukraine
2.5 years
is the average tenure of our hires
Cultural alignment
with your company values
Pricing transparency
no hidden or buy-out fees
Legal & compliance
and other needed operational support
Exceptional dedication
itโs literally your own team
Long-term partnership
shared responsibility & commitmentKey Things to Know About Outsourcing Payroll to Ukraine
Payroll and taxes in Ukraine (FTE)
What do outsourced payroll services in Ukraine cover? Essentially, when scaling to Ukraine, you entrust payroll management to a provider specializing in outsourced payroll in Ukraine. When you hire under the full-employment model, your provider will help with the following payments:
- The employerโs share of Social Security Contributions (SSC) amounts to 8.2% on top of the gross monthly remuneration of $5,000.
- The employeeโs share with a monthly gross salary of $5,000 would constitute approximately 23% of their gross income (including PIT and SSC obligations).
Payroll and taxes in Ukraine (B2B)
The B2B model differs in that your team member, i.e. a contractor, is responsible for payroll and taxes. As a rule, personal taxes are levied on the income and are not mandatory for compensation by the company. Still, hereโs the breakdown.
In Ukraine, personal income tax constitutes 5%, while the military tax equals 1%.ย
Social Security contributions make up 22% of the minimum salary – UAH 5,280 (~ $125) quarterly.ย
As a result, the effective tax rate for an IT specialist with a monthly remuneration of $5,000 would amount to approximately 6.84% of their gross income (includingย PIT and SSC obligations).
Tax incentives for R&D in Ukraine
In Ukraine, thereโs a separate legal and tax regime, Diia.City, designed to support the IT sector by offering favorable tax rates and flexible employment models.ย
Under Diia.City tax regime, the payments are the following:
- Personal income tax is 5%, while the military tax equals 5%. As a result, the effective tax rate for an IT specialist with a monthly remuneration of $5,000 would amount to 10% of their gross income.ย
- SSCs constitue 22% from minimum salary – $41,6 per month. For an employee receiving a monthly remuneration of $5,000, the employer will contribute an additional approximately 0.8% for SSC on top of the gross salary.
Payroll processing outsourcing in Ukraine
Payroll outsourcing services in Ukraine cover key day-to-day tasks, such as:
- Payroll tax planning, calculation, and consultation
- Preparation and allocation of statements
- Preparation and submission of payroll returns to local authorities
- Statutory payroll reporting
- Team benefits administration
- Processing payments for the tech industry
Why is outsourcing payroll to Ukraine efficient for businesses?
- It saves costs & time. Managing payroll internally requires your accountants to cover salary calculations of both in-house and outsourced development teams. Extra workload means additional hiring and staff training, not to mention that your payroll experts would have to learn the specifics of the foreign payroll management rules, labor laws, statutory regulations, tax systems, etc., to stay compliant. Thus, outsourcing payroll solutions can help you cut costs on payroll management for new team members. Plus, it frees up time for your internal team to prioritize core financial activities.
- It mitigates compliance risks. When hiring developers abroad, your tech business should follow all the local laws, especially regarding payroll and taxes. Cooperation with a local payroll provider can shield your company from legal issues and fines, as they know the ins and outs of the local tax laws, wage regulations, terminations, and compliance requirements and stay updated on changes.
- Itโs safe for your data. Payroll deals with sensitive employeesโ information like social security numbers, salaries, and bank details, which can make tech entrepreneurs reluctant to use payroll outsourcing services in Ukraine. However, a trusted payroll firm prioritizes security, investing in cloud-based servers, data centers, and cyber security software. The result? Maximum protection from embezzlement, identity theft, and other risks.
- It allows for scalability. The tech companies looking to rapidly expand their development team abroad often have complex payroll needs. Using outsourced payroll services can help them handle fluctuations in employee numbers, benefit plans, and tax requirements, providing scalability without the need for extra internal resources or infrastructure. This approach has been embraced by notable tech companies like People.ai, BigCommerce, ThredUP, Sift, and Dotmatics when expanding development teams abroad.
Choosing a payroll outsourcing company in Ukraine
- Qualification & experience. Choose a vendor with experienced payroll and legal professionals in the tech industry. Also, check out their case studies, client reviews, and testimonials for social security.
- Pricing structure. Consider a payroll outsourcing provider in Ukraine with predictable pricing and detailed invoices to avoid hidden fees and, therefore, eliminate the risk of overpayment.ย
- Technology & security. Check if your payroll outsourcing company in Ukraine uses modern payroll processing software that is reliable and capable of handling your payroll requirements. Additionally, make sure they apply data security protocols and encryption standards and comply with data privacy regulations to safeguard employee information.
- Guarantees. If your payroll outsourcing solutions company provides compensation for mistakes or missed deadlines, has outlined timeframes, and offers pricing transparency, this is a green flag to outsource payroll service in Ukraine with them.
What is an Employer of Record?
Employer of Record (EoR) allows tech businesses to employ talented in-country experts without setting up a legal entity and receive all the needed operational support in one place.
This is the most viable way to legally employ A-players for your global expansion plans for the following reasons:
- You delegate the management of all the business functions, like employment, payroll, tax payments, and compliance, and donโt have to establish a legal entity.
- It saves you the hassle of outsourcing these operations to multiple vendors.
Better Than Just Outsourced Payroll in Ukraine
Alcor is your tech expansion accelerator for global growth
- From 0 to 100+ engineers in one key talent pool
- Employer of recordโno entity compliant employment
- Comprehensive in-country support
- No buy-out or other hidden fees
- Your team from day one. Your management. Your culture.
Companies Scaling with Alcor
Alcor is a reliable partner that meets our hiring needs. We finally hired experienced software engineers in Eastern Europe with strong tech skills and business acumen. Account Managers are awesome!
With Alcor’s all-in-one solution, we got a software R&D office with 15 senior PHP devs and a compliant operational coverage. I really appreciated their transparent pricing structure and deep expertise.
We interviewed a lot of EoR platforms and companies, but Alcor was the only one that provides a combo package of EoR and Recruting offerings. Alcor helped us build a full stack team in 1.5 month.
We wanted to switch from our outsourcing provider, and Alcor has become really game-changing for us. Within a mere 6 months, we got a fully-fledged team of 30 engineers in our own R&D office.
Alcorโs R&D solution eclipses full-cycle recruitment, EOR service, and operational support for our offshore team. Their ‘all-in-one place’ approach is far more cost-effective than I could’ve imagined.
I value their commitment to going the extra mile. We evolved from an outstaff project into an independent company, and Alcor’s support was crucial. They hired and ondoarded 15+ professionals for us.
Thanks to Alcor, we hired four engineers and a designer that strengthened our team. Beside stellar recruitment, Alcor flawlessly handled our payroll. Their approach was seamless and swift.
Alcor closed our 4 QA positions in a month and more than doubled the team in a year! We chose Alcor because of their communication style, cost, scope of services, and ideas to help us be successful.
FAQ
1. Do we have to wait till the end of the financial year, or can we start payroll outsourcing at any time?
No, you donโt need to wait until the end of the financial year to outsource payroll services. Itโs possible to transition anytimeโentirely up to you. However, we do recommend starting at the beginning of a new pay cycle or quarter to ensure a smoother handover and minimize disruptions.
2. What payroll functions can be outsourced to Ukraine?
Payroll outsourcing covers both payroll processing outsourcing and compliance. Processing includes management, tax planning, calculations, payments, and bonuses, while compliance handles statement preparation, payroll returns, and statutory reporting. The best part? You donโt need a separate compliance or payroll processing provider in Ukraineโoutsource it all with Alcorโs model!
3. Can a new payroll outsourcing provider fix existing payroll errors?
Yes, a professional payroll and compliance outsourcing provider in Ukraine can help fix the existing errors in your payroll process, but choosing the right one takes extra effort. Look for a provider with proven expertise, a strong track record, positive client reviews, transparent pricing, solid guarantees, and robust security measures.
4. How to switch to another outsourced payroll, PEO, or EOR provider?
Once youโve found a perfect payroll compliance outsourcing vendor in Ukraine by evaluating them according to the factors that I listed in the previous answer, the next step is to discuss cooperation terms and sign an agreement. Then, you can create a transition plan and outsource your payroll processing to the new provider. Typically, professional payroll providers lend a hand. For example, fast-growing teams abroad may benefit from a comprehensive solution like Alcorโs software R&D accelerator.
5. Which model is best suited for tech companies: an outsourced payroll company, PEO, or EoR?
โโFor tech companies expanding their development teams abroad, cooperation with an outsourced payroll company may fall short, as they typically offer a limited set of operational services, i.e. only payroll processing outsourcing in Ukraine. Instead, Professional Employer Organizations (PEOs) or Employers of Record (EoRs) are often more cost-effective and convenient.
PEOs work on co-employment terms, essentially leasing developers, while EoRs act as legal employers, leaving team management to you. Some EoRs, like Alcor, even offer full-cycle tech recruitment, ensuring a smooth new market entry.
6. Is it better to outsource payroll in Ukraine?
Payroll outsourcing helps businesses cut costs, reduce compliance risks, avoid errors, and streamline payroll processes abroad. Itโs especially useful for tech companies scaling their teams internationallyโa payroll outsourcing company helps navigate local laws and get a seamless, hassle-free scaling experience.