What taxes and deductions should the system take into account
From the taxable income of an employee in Ukraine, the following are withheld: personal income tax (PIT) — 18%, military tax — 5%. These withholdings come directly from the employee.
From the wage fund (paid by the employer): the unified social contribution (USC) is 22% of the accrued salary. The USC is limited by a maximum base — for the year 2026, this is 15 minimum wages.
The accounting system must automatically calculate all these amounts, generate entries, and prepare data for reports — consolidated reporting for the State Tax Service, Pension Fund, and Unified Social Contribution, as well as statistical reporting.
Calculation of different types of payments
In addition to the "net" salary, the accounting department calculates: bonuses (one-time, periodic), allowances (for length of service, for harmful conditions, for qualifications), and additional payments (for night hours, for work on weekends).
Each type of payment may have its own tax rules. For example, certain types of financial assistance are not taxed up to a certain amount.
A quality accounting system allows you to set up the payment type once — with all the tax rules — and then apply it without errors.
Sick leave and maternity leave
Sick leave is a separate story. The first 5 days are paid by the employer from their own funds, and thereafter by the Social Insurance Fund. The amount depends on the insurance record and the average daily earnings over the last 12 months.
Parental leave payments are calculated based on the average salary for the last 12 months before the parental leave. They are paid out in a lump sum by the social insurance fund.
The accounting system must automatically generate data for the calculation (insurance experience, average earnings) and make the correct calculation taking into account the current regulations.
Vacations and compensations
Accounting for vacation leave is a separate block: annual basic leave (24 calendar days), additional leave (for harmful conditions, for length of service, educational), unused days, and compensation upon termination.
The calculation of vacation pay is based on the average earnings over 12 months. If there were bonuses, sick leave, or vacations during the calculation period, the system must take this into account correctly.
Errors in calculating vacation pay are a typical reason for audits and adjustments. Automation minimizes the risk.
Enforcement of court orders and alimony
If an employee has alimony or other deductions based on enforcement orders, the system must automatically calculate them from each payment at a specified percentage, generate payment documents, and keep records for each enforcement order separately.
It is important to consider the limitations here: the total amount of deductions cannot exceed 50% of the earnings (70% for child support). If there are multiple enforcement orders, the correct order of priority is needed.
Personnel events and their impact on calculations
Termination, hiring, transfer, change of rate, change of schedule — each HR event affects the calculation of salary. If the accounting system and HR module are not integrated, the accountant enters this data manually with errors.
Quality automation combines personnel accounting and payroll calculation in a single database. The HR specialist added an event — the system automatically takes it into account in the calculation.
Reporting to the State Tax Service, Pension Fund, statistics
The accounting system must automatically generate: consolidated reporting for the State Tax Service (form according to the updated rules of 2026), statistical reporting (1-PV, 4-PV, and others).
It is best if the system can immediately send reports through electronic services (M.E.Doc, taxpayer cabinet). This saves hours of work each month.
Bank integration for payments
Salaries are usually paid through bank payroll projects. The accounting system should generate payment registers in the format of your bank (PrivatBank, Oschadbank, Raiffeisen, Universal Bank, etc.) and transfer them directly to the client bank.
Without this integration, the accountant manually fills out the register every month — this takes hours of work and poses a risk of errors with card numbers or amounts.
What changed in 2026
Among the current changes: updated rates and limits for the Unified Social Tax, new reporting forms, possible adjustments to the military tax. A good accounting system vendor updates the functionality automatically — you don't have to worry about "keeping up with the changes."
This is one of the reasons why it's worth paying for support: updates for changes in legislation are not just a convenience, they are a guarantee that your reporting meets current requirements.
Are you automating the payroll calculation?
SPOC offers comprehensive payroll automation solutions that take into account Ukrainian specifics. Leave a request for a consultation.