Ukraine: Disability Benefits Subject to Income Tax

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By Sergei Blagov

Agency guidelines released Feb. 24 clarify that temporary disability benefits paid to employees are subject to personal income tax and that employers are required to act as withholding agents for the taxes.

Under Article 34 of Ukraine's law on mandatory social insurance (No. 1105), the State Social Insurance Fund is required to make payments to employers for disbursement to employees entitled to temporary disability benefits. Employers are required to withhold personal income tax on these payments and report payments and taxes withheld to the SSIF. The new guidelines also note that other types of social benefits disbursed by the SSIF to employers for subsequent transfer to employees are not subject to personal income tax.

To contact the reporter on this story: Sergei Blagov in Moscow at

To contact the editor responsible for this story: Rick Vollmar at

For More Information

Full text of the SSIF guidelines is available in Ukrainian here.

For more information on Ukrainian HR law and regulation, see the Ukraine primer.

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