Unpaid Wages at a Store: How to Record the Debt, Calculate Compensation, and Pay What Is Owed

Employers must pay employees the wages they have earned, even if a store has lost revenue or temporarily stopped operating. To clear wage arrears, check the amounts accrued and actually paid for each employee and month, determine the balance after deductions, and calculate compensation for late payment if the legal requirements are met.

During martial law, an employer may be exempt from liability for missing wage payment deadlines if they prove that hostilities or other force majeure circumstances caused the delay. The debt itself remains. If an employee leaves, the employer must also check the deadline for final settlement: a culpable delay may create an obligation to pay the employee’s average earnings.

Check when wages were due

Under Article 115 of the Labor Code of Ukraine (LCU) and Article 24 of the Law “On Remuneration of Labor,” employers must pay wages at least twice a month. The interval between payments may not exceed 16 calendar days, and payment for the relevant period must be made no later than seven days after that period ends. As a general rule, the specific dates are set in a collective agreement or an employer’s internal regulatory act, agreed with employee representatives in the manner prescribed by law. If the employer and employee use the simplified employment relations regime, the employment contract sets the payment dates, subject to the requirements on payment frequency in Article 115 of the LCU.

For example, a hypothetical store could set the first-half-of-the-month payment for the 22nd and the final payment for the month for the 7th of the following month. This schedule keeps the interval between payments within 16 calendar days. The employer must calculate the first-half payment based at least on time actually worked, using the applicable rate or salary.

If a scheduled payment date falls on a day off, public holiday, or non-working day, wages must be paid on the preceding day. During martial law, Article 6 of Law No. 2136-IX disapplies Article 73 of the LCU and certain rules for moving days off. The accountant should therefore check the store’s work calendar: a date being listed as a public holiday does not, by itself, mean employees have that day off.

A payment is overdue once its due date has passed. The provision on financial fines for delays of more than one month does not let an employer postpone wages for that long without consequences.

Create a register of actual wage arrears

One practical way for a store to check its records is to keep a separate arrears register. The accountant or business owner compares time sheets, pay terms, documents for bonuses and additional payments, payroll statements, and payment confirmations. If a salesperson receives a salary plus a percentage of sales, the review should include every amount due under the established pay terms.

The register should separate gross wages before deductions, taxes and other lawful deductions, the amount payable to the employee, and the money the employee actually received. Remitting taxes to the budget does not confirm that the employee received their share of the wages. Likewise, a general store expense entry with no recipient or period does not reliably show which debt has been paid.

Hypothetical example: UAH 15,000 in wages was accrued for an employee, and the accountant calculated lawful deductions of UAH 3,450, leaving UAH 11,550 payable. If the employee actually received UAH 4,000, the unpaid balance after deductions is UAH 7,550. These figures are for explaining the accounting only; they do not set tax rates.

Being unable to contact an employee does not justify removing the wages owed to them from the register. A practical step for a hypothetical store would be to check the employee’s last known contact details, the agreed payment method, and why any transfers were returned. During martial law, Article 7 of Law No. 2136-IX allows the parties to agree on available methods for electronic document exchange, but the employer must maintain reliable records of work and labor costs.

Calculate compensation for delayed wages

Law No. 2050-III and Procedure No. 159 provide for compensation for the loss of part of an income if payment is delayed by one or more calendar months. They cover monetary income that is not one-off, including wages and indexation amounts. The Procedure also lists temporary disability benefits among social payments. Before calculating compensation, the accountant should therefore identify each type of income rather than apply one formula to every amount in the payroll statement.

Income not received on time through the employee’s own fault is not eligible for compensation. However, not responding to a message does not, by itself, establish fault: the employer must determine whether timely payment was possible and why the employee did not receive the money.

Compensation = unpaid income after taxes and mandatory payments × increase in the consumer price index ÷ 100.

Calculate the index separately for each month of wage arrears. Convert the monthly consumer price indices published by the State Statistics Service of Ukraine (Derzhstat) into coefficients and multiply them together. Include the months from the month following the month for which the income was accrued through the month before actual payment. Exclude both the month for which the income was accrued and the month in which the debt is paid. This is the period used in the appendix to Procedure No. 159.

If the product of the indices does not exceed 100%, no compensation is accrued for that monthly debt. Do not exclude an individual month in which prices fell: its index is still part of the product. Pay compensation in the same month as the corresponding debt is paid.

Hypothetical compensation calculation

Suppose a store did not pay UAH 6,000 in wages for April, after taxes and mandatory payments. The full debt is paid in July, and the employee is not at fault for the delay. For this teaching example, assume the following hypothetical indices: 101% for May and 102% for June. These are not actual Derzhstat figures.

1. May and June are included in the calculation. Exclude April, the income month, and July, the payment month.
2. The cumulative index is 1.01 × 1.02 × 100 = 103.02%.
3. The increase in the index is 103.02 − 100 = 3.02%.
4. Compensation is UAH 6,000 × 3.02 ÷ 100 = UAH 181.20.

The employer therefore pays the UAH 6,000 wage debt and accrues UAH 181.20 in compensation. Together, this is UAH 6,181.20 before any applicable deductions from the compensation itself. The accountant should check the tax treatment of compensation separately; the wage debt in this example is already stated after deductions.

If the debt is paid in installments in different months, use the actual payment month for each installment. One practical way to organize the calculation is to keep a separate line for each installment paid: once paid, it no longer forms part of the unpaid balance, and compensation on the remainder is determined when that remainder is paid.

Set a payment order and keep proof

Article 97 of the LCU and Article 15 of the Law “On Remuneration of Labor” give wages priority: employers make other payments after meeting their wage obligations. Article 24 of that Law also prohibits making the timeliness or amount of wage payments dependent on other payments or their order. A planned stock purchase or supplier payment therefore does not give an employer the right to defer wages.

A hypothetical store could use the following process to clear arrears: the owner determines the funds available, the accountant allocates them to specific employees and debt months, calculates compensation for the portions being paid, and reconciles the balances after payment. Paying the oldest debts first may be a chosen way to organize payments, but an internal schedule does not change statutory deadlines that have already been missed or permit new arrears to accumulate.

With the employee’s written consent, wages may be paid through payment service providers permitted by law or by postal transfer to an account or address the employee specifies. The employer pays the service costs. Store employees may also be paid at their place of work: Article 24 expressly provides this exception for people working at a retail establishment.

One practical way to document a bank payment is to keep proof of the completed transfer showing the recipient, amount, date, and payment purpose. A prepared payment instruction without confirmation that it was executed does not establish that the money was received. For cash payments, keep properly completed cash documents and proof that the employee received the money. A promise to pay or the employer’s written acknowledgment of the debt is not a wage payment: Article 23 of the Law “On Remuneration of Labor” prohibits paying wages in the form of debt obligations or written acknowledgments of debt.

With each payment, the employer must tell the employee the total amount of wages, itemized by component, the amounts and legal basis for deductions, and the amount payable. For a partial repayment, the notice should also state the debt month, the portion paid, and the remaining balance so both parties can check the calculation.

How to document the impact of hostilities on a delay

Under Article 10 of Law No. 2136-IX, employers must take every possible measure to pay wages on time. An employer may be exempt from liability for missing payment deadlines if they prove that a specific violation resulted from hostilities or other force majeure circumstances. A general reference to martial law is not enough.

In a hypothetical case involving a damaged store, the owner could gather documents about the damage, bank notices that transactions were unavailable, evidence of lost access to records, and materials showing attempts to make payments by other available means. The explanation should link these circumstances to specific deadlines: what prevented payment, how long the obstacle lasted, and what the employer did to settle the debt. The necessary evidence depends on the facts; the law does not grant automatic exemption based on any single document.

If hostilities made timely payment impossible, part four of Article 10 allows the employer to defer it until the enterprise resumes operations. This provision does not allow the employer to wait until martial law ends once work has resumed. Exemption from liability does not cancel the wage debt, and Article 10 does not establish a separate exemption from compensation for loss of part of income under Law No. 2050-III.

Carry out a separate check before an employee leaves

As a general rule under Article 116 of the LCU, all amounts due to an employee must be paid on the date their employment terminates. If the employee did not work that day, settlement must be made no later than the day after they request it. The employer must give written notice of the accrued and paid amounts, stating each type of payment separately. Article 47 also requires the employer to issue a copy of the dismissal order and written notice of the amounts on the date employment terminates.

If the parties dispute some of the amounts accrued, the employer must pay within the prescribed period any amount they do not dispute. For example, in a hypothetical dispute over a bonus, the owner cannot use that dispute to hold back an acknowledged salary debt.

For a culpable failure to pay on time, when there is no dispute about the amount due, Article 117 of the LCU provides for average earnings for the period of delay until actual settlement, capped at six months. This is a separate payment; the six-month cap does not reduce the principal debt. If the dispute is resolved in the employee’s favor, the employer pays the compensation provided by the Article. If the claim is partly upheld, the body resolving the dispute sets the amount within the same maximum period.

Special rules apply in certain circumstances. Within the framework governing a suspended employment contract, Article 13 of Law No. 2136-IX requires settlement upon its termination no later than the next working day after the dismissed employee submits a written request. Suspension itself does not cancel amounts that were due to the employee on the date it began. In addition, under Article 47 of the LCU, an employer who is an individual and is called up for military service during mobilization for a special period or called up from among reservists for military service during a special period must fulfill the obligations under that Article within one month after discharge from that service, without sanctions or fines. This includes, among other things, issuing dismissal documents and settling payments with the employee. Before applying this rule, the employer should check that their type of military service falls under one of the two specified cases.

Distinguish financial fines, administrative liability, and criminal liability

Financial fine under Article 265 of the LCU

For wage payments and other payments required by labor law that are delayed by more than one month or paid in less than the full amount, Article 265 of the LCU provides for a fine equal to three times the minimum wage in effect when the violation is discovered. This provision does not multiply the fine by the number of employees.

For this violation, Article 265 provides that liability measures are not applied if the employer complies with the order and remedies the violation within the deadline set in it. In addition, during martial law, Article 16 of Law No. 2136-IX provides that fines under Article 265 are not applied if the employer complies in full with the orders resulting from an unscheduled inspection within the prescribed deadlines.

The business owner should therefore review the entire order and document compliance with each requirement by the stated deadline. Partial repayment or a promise to pay the balance does not meet the requirement of full compliance. This relief applies specifically to fines under Article 265: it does not cancel the debt or automatically exempt the employer from other types of liability. Repaying the debt before an inspection should also not be treated as a universal guarantee against every consequence.

If a legal entity or an entrepreneur who employs workers has already received a fine order under Article 265 of the LCU, that Article allows them to satisfy the order by paying 50% of the fine within 10 banking days of receiving it. The employer should record the date of receipt and check the payment deadline. Paying the fine does not remove the obligation to remedy the violation and clear the wage debt.

Administrative liability under Article 41 of the Code of Ukraine on Administrative Offenses

For missing wage payment deadlines or paying less than the full amount, part one of Article 41 of the Code of Ukraine on Administrative Offenses (CUAO) provides for a fine of 30 to 100 non-taxable minimum incomes of citizens for officials and individual entrepreneurs. For this violation, there is no requirement that the delay exceed one month.

The fine is 100 to 300 of those minimums if, within a year, the person repeats a violation under part one of Article 41 of the CUAO for which they have already received an administrative penalty. The same fine applies to these actions against a minor, a pregnant woman, or a single father, single mother, or person acting in their place who is raising a child under 14 or a child with a disability. The conditions for this fine must be assessed separately from the employer’s financial sanction.

Criminal liability under Article 175 of the Criminal Code of Ukraine

Criminal liability under Article 175 of the Criminal Code of Ukraine (CCU) requires all of the following: the non-payment is without legitimate grounds, lasts more than one month, and is committed intentionally by the head of an enterprise, institution, or organization, or by an individual entrepreneur. The mere existence of a debt does not prove all these elements. If the non-payment resulted from the misuse of funds intended for wages, a separate, more severe part of the Article applies.

Part three of Article 175 provides for exemption from criminal liability if the person pays the wages before being formally notified of suspicion of the offense. This special condition applies only to this Article; it cannot be extended to administrative fines or every other consequence of delayed payment.

What an employee can do if the debt remains unpaid

One possible way to seek resolution is for the employee to first write to the employer, identify the unpaid months, request a breakdown of accrued amounts, deductions, and actual payments, and demand payment of the debt and any compensation due. To support the claim, the employee should keep pay notices, bank statements, documents showing the pay terms, and proof that the request was delivered.

An employee or trade union may file a complaint with the State Labor Service of Ukraine (Derzhpratsi). During martial law, Article 16 of Law No. 2136-IX allows unscheduled inspections based on such complaints within the issues defined by law, including compliance with its requirements. The employee may also bring a claim directly in court to recover the debt, and may challenge a refusal to pay compensation under Article 7 of Law No. 2050-III.

For a court claim, distinguish between the types of demands. In Article 233 of the LCU, the Constitutional Court of Ukraine has declared the three-month limit in part one unconstitutional insofar as it applies to claims for wages and other payments due to employees. Part two, however, retains a specific three-month time limit for claims to recover all amounts due upon dismissal: it runs from receipt of written notice of the amounts accrued and paid. A one-month limit applies to a dispute about the dismissal itself, starting from delivery of a copy of the order. A dismissed employee should therefore keep the document and its receipt date and identify the subject of each claim.

Under point 1 of part one of Article 5 of the Law “On Court Fees,” plaintiffs bringing claims to recover wages or be reinstated at work are exempt from court fees at all court levels. If a claim includes additional demands, such as compensation under Article 117 of the LCU, whether the exemption applies to them must be assessed separately.

Under Article 38 of the LCU, an employee also has the right to terminate an open-ended employment contract on a date they choose if the employer fails to comply with labor law or the terms of the employment or collective agreement. Leaving the job does not end the obligation to pay earned wages.

How to reconcile salary accruals and payments in Torgsoft

To check a store’s outstanding payroll balance, use the payment statement in Torgsoft’s additional option officially named “Зарплата та мотивація персоналу” (Payroll and Staff Motivation). The option is purchased separately and requires paid activation; it works with Torgsoft Ultra, Terminal, and Torgsoft Online licenses. Depending on the license, purchase is required for each workstation in standalone versions, once per local network, or once per terminal license server. It combines accruals for the period, accounts for advances, and shows amounts already paid and still due. We recommend that the accountant compare these figures with the debt register for each employee and month to identify amounts that need checking before settlement. Create statements in order by payment period: the program allows only chronological order and does not allow date ranges to overlap. The procedure is described in the payment statement guide.

Before calculating, enter the actual hours worked in the work schedule, calculate the cost of goods, and create sales plans for each store location for the entire statement period—these are the prerequisites listed in the guide. Also check the settings for the pay scheme used by the store: for example, hourly accrual depends on hours worked and the hourly rate. Once the accountant has checked the accruals, the statement breakdown lets you review deductions, the amount paid, and the amount due. You can also print an itemized payslip for the employee showing accruals and deductions.

When recording a payment, the user enters the date, amount, and source of funds—cash register or bank account. To verify that the debt has been settled, we recommend that the accountant separately confirm that the employee actually received the money, including by checking bank documents: a record in the program alone is not sufficient for this. The accountant checks late-payment compensation, applicable taxes, and mandatory payments separately under the relevant rules, then compares the results with the outstanding payroll balance before final settlement.

Official provisions to check for your calculations and payments

• Labor Code of Ukraine No. 322-VIII — Articles 38, 47, 97, 115–117, 233, 265.
• Law “On Remuneration of Labor” No. 108/95-VR — Articles 15, 23, 24, 30, 34, 35.
• Law on Compensation for the Loss of Part of Income No. 2050-III — Articles 1–5, 7.
• Procedure for Providing Compensation, approved by Cabinet of Ministers of Ukraine Resolution No. 159 — paragraphs 2–6 and the appendix with calculation examples.
• Law on the Organization of Employment Relations under Martial Law No. 2136-IX — Articles 6, 7, 10, 13, 16.
• Code of Ukraine on Administrative Offenses No. 8073-X — parts one and two of Article 41.
• Criminal Code of Ukraine No. 2341-III — Article 175.
• Law “On Court Fees” No. 3674-VI — point 1 of part one of Article 5.