The Government has approved the procedures for compensating employers for part of the actual costs associated with the payment of a single social security contribution for creating new jobs and hiring officially registered unemployed. The relevant resolution was approved at a meeting of the Cabinet of Ministers of Ukraine on April 18, 2023.

“The new mechanism introduces economic incentives for hiring registered unemployed persons for new jobs as well as facilitates the creation of new jobs. This, in turn, will help increase employment and reduce unemployment,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

The approved document provides for the payment of compensation in the amount of 50% of the actual costs of the single social security contribution paid for a newly employed person. The compensation will be paid to employers who pay their employees a salary of at least three minimum wages throughout the year.

Provided that such a salary level is maintained, compensation will be paid for each employee over the next 12 months from the state budget allocated to the Mandatory State Unemployment Insurance Fund of Ukraine. This mechanism will come into effect starting January 1, 2024.

Moreover, small businesses will be compensated for their actual expenses in the amount of a single social security contribution for hiring registered unemployed persons for new jobs.

Small businesses will be compensated in the amount of the actual paid single social security contribution for hiring a registered unemployed person referred by the employment centre. The compensation will be granted provided that the employment period is at least 2 years and will be paid every second month during this period. This mechanism is expected to enter into force this year.