Compensation to employers for hiring IDPs: amount, conditions, documents, and application procedure

An employer who officially hires an internally displaced person can receive state compensation for wage costs. In 2026, compensation for a full month is UAH 8,647 per employee, as its amount equals the statutory minimum wage. In the general case, compensation is paid for no more than three months — UAH 25,941 for three full months. When hiring an IDP with a disability, as well as in certain cases for employers operating in territories of possible or active hostilities, payments may continue for up to six months — UAH 51,882 for six full months.

The application must be submitted no earlier than five calendar days after employment and no later than six months from the employment date. The employer must be registered as a payer of the Unified Social Contribution (USC), pay a salary not lower than the minimum wage for a fully completed monthly or hourly work quota, and submit the Tax Calculation for the latest reporting period. Employment must be formalized under a fixed-term or indefinite employment agreement, including part-time employment. A gig contract is not provided for under this compensation program.

Who can receive compensation for hiring an IDP

The rules are established by Resolution No. 331 of the Cabinet of Ministers of Ukraine dated March 20, 2022.

Compensation may be received by an employer who hires an IDP and meets the following conditions:

• is registered as a payer of the Unified Social Contribution for compulsory state social insurance;

• has employed the worker under a fixed-term or indefinite employment agreement or contract, including part-time employment;

• provides a salary for a fully completed monthly or hourly work quota that is not lower than the statutory minimum wage;

• has duly submitted the Tax Calculation of income, personal income tax and accrued USC for the latest reporting period as of the application date.

Budget-funded institutions, except social service providers, as well as compulsory state social insurance funds, are not eligible for this compensation.

The status of a registered unemployed person and employment based on a referral from an employment center are not conditions of this particular program. The State Employment Service separately distinguishes the program under Resolution No. 331 and the program for IDPs who are registered as unemployed — these are different types of state support with different conditions.

Which IDP gives an employer the right to compensation

For the purposes of Procedure No. 331, an IDP is a person who received a certificate confirming registration as an internally displaced person after martial law was introduced on February 24, 2022.

An important point: an employee may obtain an IDP certificate after being hired. However, such a certificate must already be issued as of the date the employer submits the application. If the employee does not have the certificate at that time or it was obtained before martial law was introduced on February 24, 2022, compensation will be denied.

The same IDP may be employed under Procedure No. 331 only once. If another employer has already received or is receiving compensation for this employee, the new employer will be denied compensation.

Amount and duration of compensation

Article 8 of the Law on the State Budget of Ukraine for 2026 establishes the minimum wage at:

• UAH 8,647 per month;

• UAH 52 per hour.

Since Procedure No. 331 links the compensation amount to the minimum wage, an employer may receive UAH 8,647 for one employee for a full month of work.

These total amounts are possible only if compensation is due for all full months. For an incomplete month, the amount is calculated proportionally.

How compensation is calculated for an incomplete month

If the employee did not work the entire month, the following formula is applied:

minimum wage ÷ number of working days in the relevant month × number of working days for which compensation is provided.

For hourly timekeeping, the corresponding number of hours is used instead of working days.

Compensation is paid for an employee for whom the employer pays USC during martial law and for 30 calendar days after its cancellation or termination, but only within the duration established for the relevant category.

When an employer can receive compensation for six months

The six-month period applies not only to employed IDPs with disabilities.

Employers operating in the following areas may receive compensation for up to six months:

• territories of possible hostilities;

• territories of active hostilities,

provided that the relevant territory is included in the official List of territories where hostilities are or were taking place or which are temporarily occupied by the Russian Federation, and no date has been set for the end of hostilities or the end of the possibility of hostilities.

Therefore, the employer should check its specific territorial community or settlement in the current version of the List. The fact that an enterprise belongs to a particular region alone does not confirm entitlement to the six-month period.

When to apply for compensation

The application must be submitted:

• no earlier than the fifth calendar day after employment;

• no later than six months from the employment date.

The employer must apply to the employment center located at the employer’s place of business.

Procedure No. 331 provides for the following submission methods:

1. in person at an employment center;

2. through the «Diia» Portal;

3. through an Administrative Services Center using the «Diia» Portal — if technically available.

Electronic documents are signed with a qualified or advanced electronic signature based on a qualified certificate. The use of «Diia.Signature» («Diia ID») by the employer’s manager or an authorized person is also provided for.

On the «Diia» service page, the application service is currently marked as temporarily unavailable due to technical updates. For online submission, employers are redirected to the State Employment Service portal. Employment centers also explain the possibility of submitting an application through the Employer’s Electronic Account using a qualified electronic signature.

What documents are required for compensation

If the employer submits the application in person or through an Administrative Services Center, the following documents must be attached:

• a copy of the employment order or another document confirming the conclusion of a fixed-term or indefinite employment agreement;

• information about the employee as an insured person: surname, first name, patronymic and taxpayer registration number;

• for a person who has officially refused a taxpayer registration number for religious reasons — passport series and number, provided the passport contains the relevant mark;

• a copy of the employee’s IDP registration certificate;

• if the employee has a disability — a copy of a document containing information about the disability.

Procedure No. 331 does not include a copy of the employee’s passport among the mandatory attachments to the application as a general requirement. Passport details are used instead of the taxpayer registration number only in the case provided by law where the person has refused a tax number.

Information from the application and attached documents must be processed in compliance with personal data protection legislation. This is especially important for documents containing information about disability.

What is checked when applying electronically

The electronic application includes, in particular:

• details of the legal entity or Sole Proprietorship;

• EDRPOU code;

• details of each employed worker;

• taxpayer registration number or passport details permitted by law;

• details of the document confirming employment.

Part of the information is verified through state registers: the Unified State Register, registers of policyholders and insured persons, the IDP database, while information about disability may be obtained from the Unified Information System of the Social Sphere. Data from the Pension Fund of Ukraine are also used to confirm the declared information.

What happens if the application contains errors

The current procedure allows formal deficiencies to be corrected without automatically losing the right to compensation.

If the application does not comply with the requirements of clauses 4–6 of Procedure No. 331, the employment center leaves it without further processing and notifies the employer of the deficiencies. The notification is sent within three working days and, where possible, is provided immediately in case of an in-person application.

The notification must specify:

• the specific deficiencies;

• the legal provisions that have been violated;

• how they should be corrected;

• the deadline for correction;

• the procedure and deadlines for appealing the decision.

At least three working days must be provided to correct the deficiencies. At the employer’s request, the employment center may extend this period to five working days.

If the employer corrects the deficiencies within the established period, the application is considered submitted on the date of its original submission. It may not be left without further processing again because of deficiencies that have already been corrected. Before a decision is made, the employer also has the right to submit explanations, documents and other evidence.

Decision-making period and payment of funds

The regional employment center decides whether to grant or deny compensation and formalizes the decision by order within five calendar days after receiving the application.

Notification of the decision is sent to the employer within three calendar days using the method selected by the employer when submitting the application.

For the first month, the funds are transferred to the employer within five working days after the relevant funds are credited to the regional employment center’s account. The same period applies to payments for the second and subsequent months.

How to receive compensation for the second and subsequent months

One initial application is not sufficient for automatic payment for all subsequent months.

To receive compensation for the second and subsequent months, the employer must confirm that the employee remains employed by submitting the relevant information to the employment center.

The Procedure also allows payment for eligible months if the information is submitted after the end of the three-month period, or, for IDPs with disabilities, after the six-month period, but only within the established duration of compensation.

Grounds for refusal of compensation

The employment center refuses compensation if at least one of the grounds provided for by Procedure No. 331 is established:

• the employer does not meet the program requirements;

• proper employment has not been confirmed;

• the employee does not have an IDP certificate on the application date;

• the employee received the IDP certificate before martial law was introduced on February 24, 2022;

• the required package of documents was not submitted;

• the application deadline was missed;

• the application or documents contain inaccurate information;

• the verification established that the employer or employee does not meet the program conditions;

• compensation for this employee has already been or is being paid to the same or another employer;

• an additional check after verification by the Ministry of Finance confirmed non-compliance with the program requirements;

• the employed worker is not an insured person as of the application date.

If non-compliance is discovered after a positive decision has already been made, the compensation decision may be cancelled and the funds received will have to be returned.

What to do if the employee leaves early

If the employment relationship ends before the end of the period for which compensation has already been paid, the employer must return the unused portion of the funds to the regional employment center within five working days from the date the employment relationship ends.

The amount to be returned is the difference between the compensation received for the relevant month and the amount corresponding to the time actually worked by the employee.

If the employee left before the date on which the employment center made its decision, the compensation for the relevant month is also calculated proportionally to the time actually worked.

Taxes and USC on the salary of an employed IDP

Receiving compensation does not exempt the employer from standard payroll formalization and taxation. The compensation is paid to the employer and does not replace the employee’s salary.

Standard taxation rules apply to regular wages:

• personal income tax — 18%;

• military levy — 5% for salary income, unless a special rule is established by law for the specific taxpayer;

• the basic USC rate accrued by the employer — 22%.

For employed persons with disabilities, the Law on USC provides a rate of 8.41% of the relevant assessment base for enterprises, institutions, organizations and Sole Proprietorship employers.

Therefore, the employer must accrue the salary, withhold the applicable taxes and accrue USC according to the rules that apply to the specific employee. Compensation under Resolution No. 331 is not a basis for not accruing such payments.

How the compensation itself is taxed for a Sole Proprietorship

The State Tax Service separately explains the procedure for individual entrepreneurs. For a Sole Proprietorship under the single-tax system, earmarked funds received from compulsory state social insurance funds or under state programs are not included in single-tax payer income in accordance with subparagraph 4 of paragraph 292.11 of the Tax Code of Ukraine.

The State Tax Service also states that compensation for hiring an IDP received by an individual from the Compulsory State Social Insurance Fund for Unemployment is not included in their total monthly or annual taxable income and is not subject to personal income tax or the military levy.

Inspections, repayment of funds and liability

The employer and the employed worker are responsible for the accuracy of the documents and information on the basis of which compensation was granted.

If inaccurate documents or information were submitted or the funds were used in violation of Procedure No. 331, the employer must return them to the Fund voluntarily or pursuant to a court decision.

The employment center has the right to:

• verify the accuracy of information submitted by the employer;

• monitor how the received funds are used;

• conduct an inspection at the employer’s place of business or at the employment center;

• request the necessary documents and explanations;

• monitor continued employment of workers.

Monitoring of continued employment may be conducted for 180 calendar days after the last compensation payment. The employer must allow employment center staff to conduct the inspection provided for by the Procedure or provide the requested documents.

Resolution No. 331 itself does not establish a separate special fixed-amount fine for violating Procedure No. 331. The direct consequences under its rules are refusal of payment, cancellation of an already adopted decision and repayment of unlawfully received or unused funds. Liability under other laws may also apply for inaccurate documents and other violations.

Disputes concerning the granting, payment or repayment of compensation may be appealed administratively in accordance with the Law of Ukraine «On Administrative Procedure» and/or in court.

Payroll, working time and payment records for employed IDPs in Torgsoft

In Torgsoft, the «Payroll calculation» function allows you to keep internal records of staff work: register employees’ arrival and departure times, create work schedules, automatically calculate salaries and advances, generate payroll statements, maintain a calculation archive and store employee data. For an employer receiving compensation for an IDP, this helps systematize the time actually worked, accruals and the employee’s payment history.

The program also includes the «My payslip» mode, through which an employee can view their own payslip after identification. This makes it possible to show the employee the structure of accruals transparently and maintain an internal history of calculations.

For compensation purposes, it is advisable to keep the employee’s schedule and actual attendance records in Torgsoft, calculate payroll on time, and retain payroll statements and the accrual archive. At the same time, Torgsoft does not replace the Tax Calculation, state registers or the application to the Employment Service: before submitting information for the second and subsequent months, internal employment and payroll data must be reconciled with officially submitted HR and tax information.

Example of using the compensation program

According to the Transcarpathian Regional Employment Center as of August 10, 2026, since the beginning of the year 123 employers in the region have received positive decisions on compensation for hiring 224 IDPs. This is an example of the actual use of Program No. 331 by employers rather than calculated or forecast statistics.

What an employer should check before submitting an application

1. The employee has been officially hired under a fixed-term or indefinite employment agreement.

2. As of the application date, the employee has an IDP certificate issued after February 24, 2022.

3. No compensation under Procedure No. 331 has previously been paid for this person to another employer.

4. The employer is registered as a USC payer.

5. The salary meets the minimum-wage requirement for a fully completed work quota.

6. The Tax Calculation for the latest reporting period has been submitted.

7. At least five calendar days have passed since the employee was hired.

8. No more than six months have passed since the employment date.

9. An employment order or other employment document, employee details, IDP certificate and, where necessary, a disability document have been prepared.

10. Continued employment of the employee is confirmed on time for the second and subsequent months.

11. If the employer is applying for the six-month period based on its place of business, the specific territory has been checked against the current List of the Ministry for Development.

12. HR, payroll, tax and insurance data do not contradict one another.

Official sources

• Resolution of the Cabinet of Ministers of Ukraine No. 331 dated 20.03.2022 «On approval of the Procedure for providing employers with compensation for wage costs for the employment of internally displaced persons…» — key clauses 1–6¹, 9–12, 17–19. Official text on the website of the Verkhovna Rada of Ukraine

• Law of Ukraine «On the State Budget of Ukraine for 2026» dated 03.12.2025 No. 4695-IX — Article 8, minimum wage of UAH 8,647 per month and UAH 52 per hour. Official text of Law No. 4695-IX

• Order of the Ministry for Development of Communities and Territories of Ukraine No. 376 dated 28.02.2025 «On approval of the List of territories where hostilities are or were taking place or which are temporarily occupied by the Russian Federation» — used to determine the right of certain employers to the six-month compensation period. Current List of territories

• Tax Code of Ukraine dated 02.12.2010 No. 2755-VI — Articles 165, 167, 177, paragraph 292.11 of Article 292, paragraph 16¹ of subsection 10 of Section XX. Official text of the Tax Code of Ukraine

• Law of Ukraine dated 08.07.2010 No. 2464-VI «On the collection and accounting of the unified contribution for compulsory state social insurance» — Articles 4, 7 and 8; basic USC rate of 22%, and a rate of 8.41% for the salaries of employed persons with disabilities for employers provided for by law. Official text of Law No. 2464-VI

• «Diia» Portal — «Compensation for hiring an IDP» — official information about the electronic service and its current availability. Service page on the «Diia» Portal

• State Employment Service — employment compensation programs — official list of state support programs for employers and an electronic service for compensation for hiring IDPs during martial law. Compensation for hiring an IDP under Resolution No. 331

• Public Information and Reference Resource of the State Tax Service — official clarification on the taxation of compensation received by a Sole Proprietorship for hiring an IDP. Clarification of the State Tax Service