Employee Gifts from a Sole Proprietor in 2026: Tax-Free Limit, SSC and Documents

In 2026, non-cash gifts to an employee worth up to UAH 2,161.75 per calendar month are exempt from personal income tax (PIT) and the military levy. Before purchasing, total the ordinary value of all gifts from this sole proprietor to the same employee during the month. A material incentive for an employee is included in the wage base for the unified social contribution (SSC).

At the general rate of 22%, where the salary is already at least the minimum wage and the monthly base is within the maximum, a gift worth UAH 2,000 requires an additional UAH 440 in SSC. Document the purchase, accrual and the employee’s acceptance of the item. Pay the contribution when handing over the gift and include the relevant amounts in Annexes FIZ-4DF and FIZ-D1 of the quarterly ФОП/НПД Tax Calculation.

Which gifts this guide covers

This procedure applies to a sole proprietor on the single tax system who is not a VAT payer and makes a one-off transfer to an adult employee on staff of an ordinary purchased item for personal or household use. The total ordinary value of gifts to this employee during the month remains within the tax-free limit.

The calculation below assumes an employee without a disability and outside any special preferential category. Their salary is already at least the minimum wage, and the combined monthly SSC base, including the gift, does not exceed UAH 172,940. Money, certificates, services, property rights and gifts for children require a different calculation.

Check the remaining monthly limit

Subparagraph 165.1.39 of the Tax Code of Ukraine sets the tax-free portion of non-cash gifts at 25% of the monthly minimum wage as of 1 January of the reporting year. For 2026, this is UAH 8,647 × 25% = UAH 2,161.75 per month. This portion is also exempt from the military levy.

1. Identify the calendar month in which the gift will be handed over.
2. Gather records of other gifts from this sole proprietor to the employee during that month.
3. Subtract their total ordinary value from UAH 2,161.75.
4. Compare the planned item’s ordinary value with the remaining limit.
5. Repeat the check before handover if there were other gifts after the purchase.

Keep documents that support the item’s value. In your working calculation, record the purchase price and the gift’s ordinary value separately, and identify the documents used. If the monthly limit is exceeded, the excess is taxable. In that case, do not use the budget below for a fully tax-free gift.

Calculate the SSC and purchase budget

Material incentive payments form part of wages under Article 2 of the Law “On Remuneration of Labour.” Article 7 of Law No. 2464-VI includes such payments, including payments in kind, in the employer’s SSC base. Exemption of the gift from PIT and the military levy does not exempt this incentive from SSC.

Check the contribution against the employee’s combined monthly base. For an ordinary employee, the 2026 maximum is 20 minimum wages, or UAH 172,940. If the salary is already at least the minimum wage, the combined base including the gift does not exceed the maximum, and the 22% rate applies, the additional contribution is the gift’s value × 22%.

Illustrative example: a UAH 2,000 gift

Suppose a sole proprietor bought a household item for UAH 2,000. Its ordinary value is also UAH 2,000. The sole proprietor gives no other gifts to this employee during the month. Accrual and handover take place in the same month. The employee has no disability and is subject to the general SSC rate; their salary is already at least the minimum wage, and the combined base including the gift does not exceed UAH 172,940.

• Gift purchase — UAH 2,000.
• PIT and military levy on the gift — UAH 0.
• Additional SSC: UAH 2,000 × 22% = UAH 440.
• Purchase and contribution budget: UAH 2,000 + UAH 440 = UAH 2,440.

These figures are illustrative and show the arithmetic. If a special rate applies, a top-up to the minimum base is required, or the maximum base is exceeded, recalculate the contribution under the relevant conditions. Exceeding the gift limit also changes the tax calculation.

The gift expense and SSC do not reduce single-tax liabilities: for Group 2, the rate is fixed and depends on the minimum wage; for Group 3, it is calculated as a percentage of income. Do not deduct these expenses from income when calculating the single tax.

Document the purchase, accrual and transfer

Under paragraph 44.1 of the Tax Code, tax reporting figures must be based on documents. SSC is calculated from documents on which a payment is accrued or which confirm its accrual. Prepare a set of records that lets you match the item, recipient, value and transfer date.

Prepare the transfer record in your own format. Include the document title and date, sole proprietor’s details, a reference to the order and the participants’ signatures. This is the recommended content for linking the purchase, accrual and handover.

A gift agreement for an item for personal or household use may be made orally. The employee acquires ownership when they accept the gift. If a representative enters into the agreement on behalf of the sole proprietor, the authorization document must state the donee’s name; without it, the authorization is void.

Use enough information to identify the employee and link the record to the accruals and reporting. Do not add unnecessary passport copies, home addresses or family details to the record. Personal data must be limited to what is necessary for the purpose of processing.

Pay SSC when handing over the gift

When issuing income in kind, the employer pays the SSC accrued on it at the same time. Exceptions apply if the contribution on this payment has already been paid, or a reconciliation with the tax authority has confirmed an overpayment equal to or greater than the contribution due.

The general deadline for an employer to pay SSC for a calendar month is no later than the 20th of the following month. When handing over a gift, comply with the requirement to pay at the same time. If the incentive is accrued but has not yet been transferred, SSC is accrued regardless of actual handover.

Report the gift in FIZ-4DF and FIZ-D1

A sole proprietor files the ФОП/НПД Tax Calculation at their primary place of tax registration within 40 calendar days after the last day of the quarter, broken down by month. If the final day falls on a weekend or public holiday, the deadline moves to the next business banking day. No separate annual calculation is filed.

In FIZ-4DF, show the tax-free gift using income code “160.” Under the example’s assumptions, report UAH 2,000 in both column 3a, “Accrued income,” and column 3, “Paid income.” No PIT or military levy is accrued on the gift.

In FIZ-D1, include the gift in the wage income for the relevant month. For the employee described, insured-person category “1” applies. In column 16, show total accrued wage income including the gift; in column 17, show the base within the maximum; and in column 20, show accrued SSC. Under the example’s assumptions, the monthly contribution increases by UAH 440.

For an ordinary current accrual of a gift, leave column 09, which is for the accrual type code, blank: it is intended only for cases specified by Procedure No. 4. Reconcile the figures in column 20 of FIZ-D1 with line 3.1 of the ФОП/НПД Tax Calculation for the relevant month. Filing after income or a contribution is accrued does not depend on the actual transfer of the gift or payment of SSC.

Set retention periods by document type

The retention periods in List No. 578/5 apply to sole proprietors unless the law provides otherwise or the nature of the relationship implies otherwise. Set the following periods for documents created in this process:

• Personnel order on an incentive — 75 years under Article 16b.
• Employee payroll and payment statement — 75 years under Article 317a.
• Personalised FIZ-D1 records — 75 years under Article 687.

Under the List, the general period starts on 1 January of the year following the year in which the documents were completed in the course of records management. For documents related to calculating and paying taxes, levies and contributions, a special period starts from the filing of the return for which they were used.

For other tax documents not covered by subparagraphs 44.3.1 and 44.3.2 of the Tax Code, the minimum is 1,095 days. Do not apply it instead of the 75-year period for the listed personnel, payroll and personalised records. The periods under paragraph 44.3 of the Tax Code are extended when the statute of limitations is suspended under paragraph 102.3. Keep documents related to an audit or appeal until the relevant procedures end, and for no less than the applicable minimum.

How to check the inventory cost of gift goods written off in Torgsoft

If goods intended as a gift for an employee are tracked as inventory in Torgsoft and have already been added to a write-off document, their cost can be recalculated using the “Cost calculation” button. This feature is described in the goods write-off help and the goods write-off solution description.

Manually compare the inventory cost with purchase documents, and the gift goods’ names and quantities with the signed gift distribution list. Consider the inventory cost and the gift’s ordinary value for tax purposes separately: this comparison does not determine the tax value.

Official sources

• Tax Code of Ukraine No. 2755-VI: paragraphs 44.1, 44.3–44.4, subparagraph 165.1.39, subparagraph “b” of paragraph 176.2, paragraph 293.1; subparagraph 1.7 of paragraph 16-1 of subsection 10 of Section XX.
• Law “On the State Budget of Ukraine for 2026” No. 4695-IX: Articles 8 and 32.
• Law “On Remuneration of Labour” No. 108/95-VR: Article 2.
• Law on the Collection and Accounting of the SSC No. 2464-VI: Article 7, Part 5 of Article 8, Parts 2 and 8 of Article 9.
• Ministry of Finance Order No. 4 of 13 January 2015 and the Procedure for Completing Tax Calculations: clauses 6–9 of Section I, subsection 2 of Section II, Section III, Annexes 1 and 2.
• Tax Service guidance on non-cash gifts and reporting income under code “160”.
• Civil Code of Ukraine No. 435-IV: Part 1 of Article 719, Part 4 of Article 720, Part 1 of Article 722.
• Law “On Personal Data Protection” No. 2297-VI: Part 3 of Article 6.
• List of Standard Documents approved by Ministry of Justice Order No. 578/5 of 12 April 2012: clauses 1.4 and 2.10, Articles 16b, 317a and 687.