If you employ people in Ukraine — directly, through a local entity, or via an employer of record — vacation and sick leave are two areas where foreign companies most often get things wrong. Not out of bad intent, but because the Ukrainian system works quite differently from what US or Western European managers are used to.
A few things that surprise almost every foreign client we work with: vacation days in Ukraine never expire. Sick leave has no fixed annual limit. And how much an employee gets paid while sick depends not on your company policy, but on how many years they've paid into the state social system.
Let's go through both topics properly, in plain language, as the rules stand in mid-2026.
01
Annual vacation: the basics
Every employee in Ukraine is entitled to at least 24 calendar days of paid annual leave per year. Not working days — calendar days, so weekends inside the vacation period count toward the total. This is a statutory minimum set by law; you can offer more in the employment contract, but never less.
Some categories get more by default: employees under 18 get 31 days, people with disabilities get 26 or 30 depending on the disability group, and certain professions (teachers, medical workers, miners) have their own extended entitlements.
On top of the basic vacation, the law provides additional leave in specific cases:
- up to 7 extra days for employees with an "irregular working day" regime (ненормований робочий день) — common in office roles, if it's set out in the employment contract or collective agreement;
- extra days for work in harmful or difficult conditions;
- 10 extra days of social leave per year for a parent of two or more children under 15, a parent of a child with a disability, or a single parent.
A small but pleasant one: a father is entitled to a one-time paid leave of up to 14 calendar days at the birth of a child.
When the right to vacation kicks in
An employee earns the right to their first full vacation after six months of continuous work with the employer. Before that, they can still take leave, but only in proportion to the time actually worked. After the first year, vacation can be taken at any point, based on the vacation schedule the company approves.
Vacation can be split into parts if the employee agrees, but one part must be at least 14 consecutive calendar days. This is a rule foreign managers often miss: an employee taking their vacation as ten separate long weekends technically doesn't satisfy the law.
The rule that surprises everyone: vacation days never burn
In many countries, unused vacation expires at year-end or after a carry-over period. Not in Ukraine. Unused vacation days accumulate indefinitely. If an employee hasn't taken leave for three years, they are still owed all of it.
Why should you care? Because when the employment ends — for any reason — the employer must pay monetary compensation for every unused vacation day, going back through the entire employment history. We've seen cases where an employee who "never had time" for vacation left the company with a compensation payout equal to two or three monthly salaries. For your books, accumulated vacation is a real liability, and a good accountant tracks it as one.
The practical advice is simple: make people actually take their vacations. It's better for them, and it keeps a silent debt from growing on your balance sheet.
How vacation pay is calculated
Vacation pay is based on the employee's average daily earnings over the previous 12 months. Roughly: take the total salary for the last 12 months, divide by the number of calendar days in that period, multiply by the number of vacation days. If the person has worked less than a year, the actual period worked is used.
Two things follow from this. First, vacation pay is usually close to, but not exactly equal to, the regular salary — bonuses and salary changes during the year affect the average. Second, everything runs off official salary. If part of the compensation is paid unofficially, the employee's vacation pay (and sick pay, as we'll see) shrinks accordingly. This is one more reason why serious companies in Ukraine pay fully white salaries.
One timing rule worth knowing: vacation pay should be paid out before the vacation starts — the classic rule was three days before, and during martial law the parties can agree on other timing, but paying it after the fact is a violation.
What martial law changed for vacations
Since 2022, a special law (No. 2136) has adjusted labor rules for the wartime period. For vacations, the key points still relevant in 2026:
- For employees engaged in defense work or critical infrastructure, the employer may limit annual leave to 24 days for the current year — additional days aren't lost, they're deferred.
- Employers may refuse to grant vacation (except maternity and childcare leave) to such employees if it interferes with critical operations, again with days deferred, not cancelled.
- Employees can take unpaid leave without the usual 15-day annual cap for the duration of martial law, if the employer agrees. Separately, employees who left for temporary occupation territory or abroad can take unpaid leave up to 90 days.
For a typical IT or services company these restrictions rarely matter day to day, but the unpaid leave flexibility is used often — for example, for employees who relocated abroad and want to pause employment without terminating it.
02
Sick leave: how it actually works
Now the second big topic. Ukraine has a state social insurance system for sickness, and it works differently from both the US model (where sick pay is basically employer policy) and most Western European models.
Everything is electronic now
Paper sick notes are history. When an employee sees a doctor, the doctor opens an electronic sick leave certificate (e-лікарняний) in the national health database. It appears automatically in the employer's electronic cabinet — the employee doesn't need to bring you anything. The certificate becomes "ready for payment" about seven days after it's opened, which is when the accountant processes it.
For the employee, the process is almost invisible: get sick, see a doctor, recover, receive the money with the next salary. For the employer, there's a defined workflow with the Pension Fund behind the scenes.
Who pays: the 5-day split
Here's the core mechanic every foreign employer should understand:
- Days 1–5 of illness are paid by the employer, from the company's own funds.
- From day 6 onward, payment comes from the Pension Fund of Ukraine (PFU) — the state body that has administered all social insurance payouts since 2023.
The PFU money doesn't go straight to the employee. The employer files an application, the Fund reviews it (up to 10 calendar days), transfers the money to the employer's special account, and the employer pays it out to the employee together with the nearest salary. So from the employee's perspective, everything arrives from the company; from the company's perspective, everything from day 6 is reimbursed by the state.
[ WHO PAYS, AND HOW MUCH LEAVE ]
Sick leave has no annual cap — the employer covers the first five days of each episode, the state (PFU) everything from day 6. Paid annual leave is at least 24 calendar days a year, and unused days never expire.
There are exceptions where the PFU pays from day one: caring for a sick child or family member, quarantine, and maternity leave.
How much the employee gets: it depends on their insurance record
This is the part that genuinely surprises foreign managers. Sick pay in Ukraine is not "100% of salary" by default. It's a percentage of average earnings, and the percentage depends on the employee's insurance record — the total years during which social contributions were paid for them, across all jobs in their career:
- less than 3 years of record — 50% of average earnings;
- 3 to 5 years — 60%;
- 5 to 8 years — 70%;
- over 8 years — 100%.
So a 24-year-old developer two years into their career gets half pay while sick, while their 35-year-old colleague gets full pay for the same flu. This isn't your policy — it's the law, and the percentages are fixed. (Some categories — Chornobyl victims, combat veterans, parents of many children and a few others — get 100% regardless of record.)
The calculation base is the same logic as for vacation: average daily earnings over the last 12 months, counting only official income on which social contributions were paid. Sick pay is subject to normal payroll taxes (18% income tax and 5% military levy are withheld; the employer also accrues 22% social contribution on top), so the employee receives a net amount.
Nothing stops a company from voluntarily topping sick pay up to full salary as a benefit — some foreign employers do exactly that to keep the experience consistent across their global team. Just be aware that the top-up is your cost, structured as an additional payment.
Is there a limit on sick days?
There's no fixed annual cap like "10 sick days per year." An employee can be on sick leave as long as a doctor certifies they're unfit for work. For long illnesses there are medical checkpoints: extended sick leave requires review by a medical commission, and after roughly four months of continuous incapacity the case goes to a medical-social expert commission, which decides on further treatment or disability status.
What matters for the employer: you cannot dismiss an employee during sick leave (except in cases like company liquidation). Sickness absence is protected time.
Special cases worth knowing
Caring for a sick child. A parent can take sick leave to care for a child under 14, paid by the PFU from day one, for up to 14 calendar days per episode. Same seniority-based percentages apply.
Maternity leave. 126 calendar days (70 before the expected birth date, 56 after; more in complicated cases), paid at 100% of average earnings regardless of insurance record, fully funded by the PFU. After that, either parent can take childcare leave until the child turns three — unpaid, but with the job position protected the entire time.
Sick during vacation. If an employee falls ill during annual leave and gets a sick certificate, the vacation is extended or rescheduled by the number of sick days. Vacation and sickness don't overlap — the employee effectively gets both.
Two things foreign employers miss most: unused vacation never expires and must be paid out in full at termination, and sick pay is set by the employee's lifetime insurance record (50–100%), not your company policy. Track accrued vacation as the balance-sheet liability it really is.
03
What this means for you as an employer
Pulling it together, here's the practical picture:
Budget for it properly. Your real cost of sickness is the first five days of each episode plus the administration; the state covers the long tail. Your real cost of vacation is roughly one extra month of salary per employee per year (24+ days), plus the accumulated liability for whatever people don't use.
Track vacation balances like a liability. Because that's what they are. Every unused day is money you'll owe at termination, calculated at the then-current (usually higher) salary.
Keep salaries fully official. Both vacation pay and sick pay are calculated from the official base. Grey payment schemes quietly cut your employees' social protection — and in our experience, employees know it and resent it.
Don't apply your home-country playbook. "Use it or lose it" vacation policies, unlimited PTO constructs, employer-defined sick pay rates — none of these override Ukrainian statutory rules. Local law wins, and labor inspections do check.
Mind the paperwork rhythm. Vacation schedules, leave applications and orders, e-sick-leave processing, PFU filings — Ukrainian HR administration is document-heavy. It's not difficult, but it has to be done on time, every time.
04
How we can help
Ukrany handles employment, payroll, and HR compliance in Ukraine for foreign companies — from defense-tech firms with field teams to IT businesses with distributed engineers. Vacation accruals, sick leave processing, PFU interactions, maternity cases, wartime leave specifics — this is the everyday content of our work, across hundreds of employees under management.
If you employ people in Ukraine, or plan to, and want leave and sickness handled correctly without building that expertise in-house — get in touch. We'll show you exactly how it would work for your team, with real numbers instead of general promises.
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