Partial Unemployment Assistance for Sole Proprietors: Eligibility, Calculation, and Applying

In Ukraine, an individual entrepreneur (sole proprietor) may apply for partial unemployment assistance for themselves or their employees. First, calculate how much working time and income have fallen. For assistance paid to the sole proprietor personally, both measures must decrease by at least 30% per month. For assistance paid to employees, the reduction must cover at least 20% of the employer’s workforce: for each of those employees, both working time and salary must decrease by at least 30% per month. A drop in sales alone is not enough to qualify.

Submit an application to the employment center serving the place where the business operates within 90 calendar days from the start of the suspension or reduction of activity. Before applying, check whether the requirements on insurance contributions and absence of debts are met, prepare a calculation of the reduced hours, and assess whether you can maintain business activity and employment after payments end. Monthly assistance for one person is capped at 50% of the statutory minimum wage, and payments may cover no more than 180 calendar days within the 36 months from the start of the suspension or reduction of activity.

Who can receive assistance

Partial unemployment assistance is available to insured employees and entrepreneurs who lose part of their salary or income because their business activity is temporarily suspended or reduced. An insured person is a participant in the compulsory state social insurance system. Reasons for a reduction may include economic or technological circumstances, an emergency, the introduction of a state of emergency or martial law, or the imposition of quarantine.

Eligibility is set out in Article 47 of the Law of Ukraine of 5 July 2012 No. 5067-VI “On Employment of the Population”. Application and payment rules are established by the Procedure for Providing Partial Unemployment Assistance, approved by Resolution of the Cabinet of Ministers of Ukraine of 21 June 2022 No. 702 (hereinafter, Procedure No. 702).

Decide who you are applying for:

• For yourself. The sole proprietor applies as an insured person. The regional employment center transfers the funds to their current account. A sole proprietor cannot receive this assistance at the same time as an entrepreneur for themselves and as an employee.
• For employees. The sole proprietor applies as an employer, submits employee information, receives funding, and pays the assistance to the employees.
• For yourself and employees. The entrepreneur submits both sets of information. The conditions for their own payment and payments to employees must be met separately.

You do not need to register as unemployed to receive this assistance. It is intended to preserve business activity or employment relationships during a temporary reduction in work. Terminating the state registration of a sole proprietorship may require repayment of the funds received.

How to assess eligibility for yourself or your employees

Illustrative example for an employer. A shop employs 10 people. Two employees each had their working time and salary reduced by 35%. The share of affected employees is 2 ÷ 10 × 100% = 20%, so the headcount criterion is met. If the reduction affects only one employee, the share is 10%, which is not enough. The employment center assesses the remaining conditions separately.

What a shop owner should prepare

Retail trade by itself neither qualifies a business for assistance nor automatically disqualifies it. The owner must explain how a specific economic or other legally recognized reason led to a temporary reduction in business activity, working hours, and income or salary.

Prepare a month-by-month calculation showing normal working hours, actual hours after the reduction, the number of hours lost, and the change in income. For employees, the accountant should compare their working hours and salaries using personnel and payroll records and calculate the percentage reduction in each measure. Keep the documents needed to reproduce every figure.

Illustrative example. If a shop’s revenue falls by 40% but the entrepreneur works the same number of hours, the working-time reduction criterion is not met. The percentage drop in sales cannot be reported as the percentage reduction in hours.

Separately identify the entrepreneur’s income and the base for calculating the insurance contribution—the amount on which the contribution is calculated. These measures serve different purposes: a reduction in income affects eligibility, while the contribution base is used to calculate the amount of assistance.

For what period must the insurance contribution have been paid?

As a general rule, the single contribution for compulsory state social insurance (single social contribution, SSC) must have been paid for the last six months preceding the month in which the suspension or reduction of activity began. For employees, payment is checked for each person; for an entrepreneur, it is checked for the entrepreneur.

If, during the six months before applying, legislation gave the relevant employer or sole proprietor the right not to pay the SSC, the previous 180 calendar days before that period are used instead. The contribution payment requirement remains; the period assessed changes. Prepare information about the grounds for exemption from payment and contributions for the earlier period.

When assistance will not be granted

Before completing the application, compare your situation with the restrictions in paragraphs 6–8 of Procedure No. 702. Assistance is not granted, in particular, in the following circumstances:

• Seasonal reduction in work. A normal reduction in activity due to the season does not qualify for payment.
• Exclusively organizational and production reasons. These include re-profiling, technical re-equipment, a change in technology, and switching to other types of raw materials to address the causes of the reduction. The restriction applies when the reduction arose exclusively for these reasons. Explain precisely in the documents what caused the work to stop.
• Wage or insurance contribution arrears. The restriction covers debts for wages, the SSC, and insurance contributions for compulsory state pension insurance during the six months before the month in which the reduction began.
• Debts to the state or local budget outstanding for more than six months before the month in which the reduction began. These are considered separately from SSC debt.
• Business termination or insolvency. A barrier includes a termination process, bankruptcy, bankruptcy proceedings, liquidation, rehabilitation—a procedure for restoring solvency—as well as a finding that the business is unable to pay creditors on time because of its unsatisfactory financial condition.

An employee is not eligible for this assistance if they work for the employer on a secondary employment basis, perform alternative service, or have refused employment or a temporary transfer to suitable full-time work with that employer. Secondary employment means work under a separate employment contract during time free from the primary job. Reduced working hours at the primary place of employment do not by themselves constitute secondary employment.

Assistance is not paid for periods of paid downtime—a temporary stoppage for which the employee is paid—unpaid leave, or suspension of employment relationships. The personnel officer or accountant must exclude these periods from the calculation.

Employees of state authorities, local self-government bodies, and institutions established by them and fully maintained from the budget cannot receive this assistance. An employer also cannot be a compulsory state social insurance fund.

How to account for exceptions during martial law

As a general rule under Procedure No. 702, partial unemployment assistance combined with other state support must not exceed the de minimis state aid limit. De minimis state aid is support to one business entity whose aggregate amount, regardless of form and source, does not exceed the equivalent of EUR 200,000 over any three-year period. Under point 9 of part one of Article 1 of the Law of Ukraine of 1 July 2014 No. 1555-VII “On State Aid to Business Entities”, the equivalent is determined using the official exchange rate of the National Bank of Ukraine in effect on the last day of the financial year.

During martial law, this aggregate limit does not apply under paragraph 27-1 of Procedure No. 702. You also do not need to submit the initial and monthly information about business activity and de minimis state aid prescribed by the fourth and fifth paragraphs of point 14 and the third and fourth paragraphs of point 20. The application and information about the entrepreneur or employees remain mandatory.

Point 5-2 of Section 9 of the Law of Ukraine “On State Aid to Business Entities” deems aid provided during martial law permissible and provides for the non-application of a number of state aid control rules. Aid providers are exempt from submitting notifications of new aid and proposals to change the terms of existing aid if the aid is provided during martial law or within one year after its termination or cancellation. They are also exempt from submitting information on existing aid provided during this period. This one-year period does not automatically extend the exceptions under paragraph 27-1 of Procedure No. 702: those exceptions apply specifically during martial law.

When de minimis state aid requirements apply, attach information about business activity and all de minimis state aid received in the past three years, including its form and purpose, to your initial application. After that, submit the relevant information for the preceding month. If you received no other state aid in the preceding month apart from partial unemployment assistance, do not submit this monthly information. Requirements for recipient information are also set out in parts nine and ten of Article 9 of the Law of Ukraine “On State Aid to Business Entities.”

Even when the martial law exception applies, you must meet the requirements on reduced work, SSC payments, debts, and use of funds for their intended purpose.

How to calculate the amount of assistance

Under point 9 of Procedure No. 702, assistance is calculated monthly in proportion to the number of hours by which work has been reduced:

PAH = CMI ÷ NWH × RWH.

• PAH — the amount of assistance for a specific person for the relevant month.
• CMI — the calculated monthly income amount. For an employee, this is the tariff rate or fixed base salary for the relevant month—the amount set for the standard workload. Under a non-tariff pay system, where pay is set without an established tariff rate or fixed base salary, the average salary is used. For a sole proprietor, it is the average monthly SSC contribution base for the year preceding the year of application, according to the relevant reporting.
• NWH — the number of hours in the normal working time for the month.
• RWH — the number of hours by which working time was reduced during the month.

If a sole proprietor has no SSC contribution base for the previous year, use the average contribution base for the six months before the date the business activity was suspended or reduced during which the entrepreneur paid SSC. For the calculation, the accountant must take this figure from the contribution report. The shop’s revenue is not used in the formula.

Illustrative example for a sole proprietor. Assume the average monthly SSC contribution base is UAH 10,000, normal working time for the month is 160 hours, and the entrepreneur worked 96 hours after the reduction. The reduction is 160 − 96 = 64 hours, or 40%. Also assume that income fell by 35% and that the remaining conditions are met.

Calculation: 10,000 ÷ 160 × 64 = UAH 4,000. The final monthly amount cannot exceed 50% of the statutory minimum wage. If that limit is lower than UAH 4,000, the limit applies; if it is equal to or higher than UAH 4,000, the formula result applies. The 35% reduction in income confirms one of the eligibility criteria. The 64 lost hours are used to calculate the amount of assistance.

Assistance is granted from the first day working time is reduced, within the period in which business activity is suspended or reduced. In total, it can cover no more than 180 calendar days during the 36 months from the start of that suspension or reduction. If you apply again within this period, days already used are counted. Funding is provided within the amounts allocated for this purpose.

Which documents to prepare and where to apply

Apply to the employment center serving the place where the business operates. For an initial application, prepare the documents required by points 13 and 14 of Procedure No. 702:

1. An application for assistance using the form approved by the State Employment Center. An application in free form is not accepted.
2. For payments to employees, information under Appendix 1 to Procedure No. 702.
3. For a sole proprietor’s own payment, information under Appendix 2. If applying both for yourself and for employees, submit both appendices.
4. Information about business activity and de minimis state aid when the relevant requirements apply, taking the martial law exception into account.

The employment center obtains confirmation of SSC payments and the absence of relevant budget debts through data exchange with the State Tax Service of Ukraine and the Pension Fund of Ukraine. If the necessary information is unavailable, the applicant must provide an extract from the tax authorities’ information system on settlements with the budget and earmarked funds, including SSC.

Separately prepare calculations of reduced hours and income, work schedules, employee time sheets—records of their working time—and payroll documents. These can help explain the figures in your application and answer questions from the employment center. You must submit the prescribed application and information forms.

How to apply in person or through Diia

Point 13 of Procedure No. 702 allows applications in person or through the Unified State Web Portal of Electronic Services—the Diia Portal—if technically available. An authorized representative may apply on behalf of an employer. If the electronic service is unavailable, submit the documents in person to meet the 90-day deadline.

To apply electronically, the applicant must have a valid passport of a citizen of Ukraine, passport of a citizen of Ukraine for travel abroad, or permit for permanent or temporary residence. To submit documents through Diia:

1. Create a personal account.
2. Complete electronic identification—confirm your identity using the portal’s tools.
3. Select the partial unemployment assistance service.
4. Sign the application and attached information with a qualified electronic signature or an advanced signature on a qualified certificate permitted by the Procedure, including “Дія.Підпис” (“Diia.Signature”). The qualified certificate confirms that the signature belongs to the applicant.

Keep confirmation of the submission date and copies of all documents submitted. In the application, specify a notification method you can use: the employment center will send its decision through that channel.

How long the application takes and how to correct errors

The regional employment center—the employment center for the relevant oblast or the Kyiv City Employment Center—decides whether to grant assistance or refuse it within five business days after submission of the documents required by points 13 and 14 of Procedure No. 702. The decision is formalized by an order. The center sends notice to the applicant within three business days after the decision is made. If the application is refused, the center must explain the grounds.

If the documents do not meet the established requirements, point 14-1 of Procedure No. 702 provides for the application to be left pending for correction. This means the applicant is given time to remedy specific deficiencies before the review continues. The center sends written notice within three business days of receiving the application and, for an in-person application, delivers it immediately and obtains the applicant’s signature acknowledging receipt, if possible.

The notice must list the deficiencies, legal grounds, method and deadline for correcting them, and the appeal procedure. The correction period cannot be shorter than three business days from receipt of the notice. At an employer’s request, the center may extend it to five business days.

If you correct the deficiencies on time, under Article 43 of the Law of Ukraine of 17 February 2022 No. 2073-IX “On Administrative Procedure”, the original submission date is preserved, and the review period is extended by the time the application remained pending for correction. An application whose listed deficiencies have been corrected cannot be left pending for correction again.

Point 17 of Procedure No. 702 also provides for reapplication after completing an incomplete document package or correcting errors. Documents may be submitted within five business days after receipt of the notice. The decision is made within five business days after resubmission.

When you receive a notice, use its contents to determine which procedure the center applied and the deadline for submitting corrections. If the application has been left pending for correction, respond in writing to each listed deficiency, attach the necessary documents, and keep proof of submission.

Before a decision is made, the employer may submit explanations, documents, and other evidence. A refusal may be appealed administratively under the Law of Ukraine “On Administrative Procedure” and/or to an administrative court. Article 78 of this Law provides the right to administratively appeal decisions, actions, and omissions of an administrative body and allows, among other things, a request to cancel an unlawful decision and restore the violated right.

In the complaint, state which grounds for refusal you disagree with, what you are requesting, and attach documents supporting your arguments. If the refusal was for reasons beyond the applicant’s control, point 18 of Procedure No. 702 allows a repeat application for funds to pay assistance to employees within the period of suspension or reduction of activity.

What to submit monthly and when to pay the funds

After a positive decision, the sole proprietor or responsible accountant must submit information monthly and track payment deadlines under points 20 and 21 of Procedure No. 702:

1. Submit information for the preceding month by the 10th of each month. The employer submits Appendix 3, while a sole proprietor applying for their own assistance submits Appendix 4. Funding is based on this information. It may be submitted in person or through Diia if technically available.
2. Track the arrival of funds in the current account. The center transfers them monthly within three business days after the relevant funding reaches the regional center’s account. This deadline runs from the date funding reaches the center.
3. Pay assistance to employees no later than three business days after receiving the funds. For this, the employer prepares a separate payment statement or cash payment statement—a document showing the payment amount for each employee.
4. Confirm payment to the employment center within five calendar days after making it. The employer submits a copy of the payment statement with confirmation of the non-cash transfer or a copy of the cash payment statement.

If the information does not match the insurance registers, the transfer deadline may be extended to allow discrepancies to be corrected, up to five business days from receipt of the center’s notice. Before the next submission, the accountant should compare employee and contribution payment data with personnel documents and SSC reports to correct errors in the figures.

If the reduction later affects other employees or the sole proprietor, and these recipients are not included in the decision, submit an additional application and information about them. The center must assess their eligibility separately. Adding new recipients only to the monthly calculation is not enough.

How to avoid repaying assistance

The entrepreneur is responsible for the accuracy of documents and for using the funds for their intended purpose. The employer must maintain the employment guarantees for recipients, while a sole proprietor receiving assistance for themselves must continue business activity during the payment period and for the prescribed period after payments end.

Part five of Article 47 of the Law of Ukraine “On Employment of the Population” establishes a six-month period after payments end. If assistance was paid for fewer than 180 calendar days, this period equals the actual payment period. For the full period, point 22 of Procedure No. 702 sets it at 180 calendar days after payments end.

As a practical precaution for the full assistance period, the owner or accountant may count six calendar months and 180 calendar days from the end of payments, record both end dates, and plan to maintain business activity and employment until the later date.

Which dismissals require repayment

If, during the prescribed period after payments end, the employer terminates an employment contract with a recipient of assistance on any of the grounds below, the employer must repay to the Ukrainian Unemployment Compulsory State Social Insurance Fund all assistance paid to that employee:

• By agreement of the parties—point 1 of Article 36 of the Labor Code of Ukraine of 10 December 1971 No. 322-VIII. This is termination of an employment contract by mutual agreement between the employee and employer.
• Resignation because of a violation by the employer—part three of Article 38 of the Labor Code of Ukraine. This concerns failure to comply with labor legislation or the terms of a collective or employment contract, as well as mobbing—workplace bullying—or failure to take measures to stop it, confirmed by a court decision that has entered into force.
• Dismissal due to changes in the organization of production and labor—point 1 of part one of Article 40 of the Labor Code of Ukraine. Such changes include, in particular, liquidation, reorganization, bankruptcy, re-profiling, and a reduction in the number of employees or staff positions.

Before processing a dismissal, the owner or personnel officer must establish the actual reason, the correct legal grounds, and the date the employment contract ends. The accountant compares these with the period during which employment guarantees must be maintained and determines the assistance paid to that employee.

Ordinary resignation under part one of Article 38 is not resignation because of an employer violation under part three of that Article. State the legal grounds in the documents that correspond to the actual circumstances.

If a sole proprietor terminates business activity during the relevant period after payments, they must repay their own assistance to the Fund in full. Before applying, assess whether you will be able to continue business activity throughout the prescribed period.

What to do if an employee is dismissed or a sole proprietor terminates activity before funding

If an employee is dismissed after the monthly information is submitted but before funding is received, the employer must repay to the Fund the funds received for the period after the employment relationship ended. The employer pays the assistance for the period before the employment relationship ended in accordance with the submitted information.

If the state registration of a sole proprietorship is terminated after monthly information is submitted but before the regional employment center transfers the funds, the center does not transfer those funds. The entrepreneur must repay to the Fund any funds already received for the period after state registration ended.

Notify the employment center that business activity or the employment relationship has ended. Use the termination date and monthly information to determine what part of the funding received was accrued for a period when the person was no longer eligible for assistance, and return those funds.

Who must repay assistance based on inaccurate documents

If an employer or sole proprietor submitted inaccurate documents or information that became the basis for payment, they must repay to the Ukrainian Unemployment Compulsory State Social Insurance Fund the full amount of assistance paid to the relevant person. This obligation is set out in point 25 of Procedure No. 702.

Funds received or used in violation of the Procedure, including funds used for purposes other than intended, must be returned voluntarily or under a court decision by the employer or sole proprietor. An employer cannot use funding for employee assistance to pay rent, purchase goods, or cover other shop expenses.

Which documents to keep and how to provide them to the employment center

Keep the application, the center’s decision, calculations of hours and amounts, personnel documents, monthly information, and proof of payments together. Decide who will keep these documents and submit them if the center requests them. That person must be able to match every figure in the information to its calculation and source document.

Under point 27 of Procedure No. 702, the employment center may inspect documents and use of funds, including remotely. Transfers may be suspended during an inspection for no more than 30 calendar days. If the applicant refuses or obstructs the inspection, the suspension continues until the inspection is actually carried out. Refusal or obstruction for 30 calendar days is grounds for terminating payment. A final inspection of the employer’s use of funds for their intended purpose is conducted within 180 calendar days after the last payment to employees.

If the center conducts an inspection at its own premises or remotely, the employer must provide the relevant documents. If center staff conduct it at the employer’s location or place of business, the employer must allow them to carry out the inspection and provide the necessary explanations.

Start with a month-by-month calculation of the reduction: for yourself, identify changes in working hours and income; for employees, identify the reduction in each recipient’s working hours and salary and the share of employees affected. If the figures meet the prescribed thresholds, check SSC payments and debts against the requirements of Procedure No. 702 and prepare the application so you can submit it before the end of the 90 calendar days from the start of the suspension or reduction of activity.

Official sources

• Law of Ukraine of 5 July 2012 No. 5067-VI “On Employment of the Population”—Article 47: eligibility, restrictions, and repayment of funds.
• Resolution of the Cabinet of Ministers of Ukraine of 21 June 2022 No. 702 “On Approval of the Procedure for Providing Partial Unemployment Assistance”—points 5–12: conditions and calculations; points 13–19: applications, review, and appeals; points 20–27: payments, repayment, and inspections; point 27-1: exceptions during martial law; appendices 1–4: information forms.
• Law of Ukraine of 1 July 2014 No. 1555-VII “On State Aid to Business Entities”—point 9 of part one of Article 1, parts nine and ten of Article 9, and point 5-2 of Section 9 on martial law: de minimis aid limit, recipient information, and temporary exceptions.
• Labor Code of Ukraine of 10 December 1971 No. 322-VIII—point 1 of Article 36, parts one and three of Article 38, and point 1 of part one of Article 40: grounds for terminating an employment contract.
• Law of Ukraine of 17 February 2022 No. 2073-IX “On Administrative Procedure”—Articles 43 and 78: leaving an application pending for correction and the right to administrative appeal.