Support Ukraine by Hiring Ukrainians

1. Company’s cost using Ukrainian FOP vs B2B contract and Employee Contract in Poland

The most beneficial way of hiring is from Ukraine based on FOP - employment type. It will only cost 2% of the employee's cost (income tax during the War period)+ 40$ (ESV tax).

The other option is to relocate an employee from Ukraine to Poland if he/she is eligible to cross the border, with the FOP employment type in Ukraine and paying taxes in Ukraine. The average proposed relocation payment is 500$ for hired ppl by FOP from Ukraine.

If we use a FOP contract for employing people from Ukraine it might save us about 22.2%, compared with an Employee Contract with Juridical Entity and 40.34% compared with Poland Employee Contract.

As an example, let’s hire a Senior Ukrainian FED. Let his financial expectation (Net_Salary) be 5000$/month on hands. Let CTC_Month be the full cost of the employee per month for a company and CTC_1st_Year be an approximate Company Total Cost (CTC) for the first year.

So in case of hiring:

1. Ukr. FOP in Poland:

We have the following equation:

12 *(CTC_Month - CTC_Month * 2% - 40) = 5000 * 12 + 500, where:

12 - number of months per year,

2% - Tax rate in Ukraine,?

500$- relocation payment from Ukraine to Poland,

40$ - ESV to pay in Ukraine, solving this equation we have

CTC_Month = 5 185.38$, accordingly CTC_1st_Year = 62 224.56$

Taxes’ load = Taxes/CTC_Month = (CTC_Month - Net_Salary)/CTC_Month = 3.6%

Taxes’ load per Year = 2 240.84$

2. Poland Juridical Entity (B2B flat contract, no relocation payment):

12 *(CTC_Month - CTC_Month * 23.9%) = 5000 * 12, where:

12 - number of months per year,

23.9 - % of the gross salary to pay (approximately, see [1,2]).

CTC_Month = 6 570.30$, accordingly CTC_1st_Year = 78 843.6$

Taxes’ load = (CTC_Month - Net_Salary)/CTC_Month) = 23.9%

Taxes’ load per Year = 18 843.62$

3. Poland Employee Contract (no relocation payment):

12 *(CTC_Month - CTC_Month * 43.14%) = 5000 * 12, where:

12 - number of months per year,

43.14% - Tax rate in Poland for Employee Contract (20.48% + 22.66%[2,3]).

CTC_Month = 8 793.5$, accordingly CTC_1st_Year =105 522.35$

Taxes’ load = (CTC_Month - Net_Salary)/CTC_Month) = 43.14%

Taxes’ load per Year = 45 522.34$

4. Ukr. FOP in Ukraine (no relocation payment):

We have the following equation:

12 *(CTC_Month - CTC_Month * 2% - 40) = 5000 * 12, where:

12 - number of months per year,

2% - Tax rate in Ukraine,

40 - ESV to pay in Ukraine, solving this equation we have

CTC_Month = 5 142.85$ , Accordingly CTC_1st_Year = 61 714.30$

Taxes’ load = (CTC_Month - Net_Salary)/CTC_Month) = 2.77%

Taxes’ load per Year = 1 709.45$

Note:?

CTC_1st_Year? = 12 * (CTC_Month - CTC_Month * Tax_Rate%? - ESV) + Cost_of_Relocation.

ESV = 40$ (approximately).

Taxes’ load = Taxes/CTC_Month * 100.

All estimations are just ROM and not intended for precise calculation.

2. Average Company Total Costs for different IT specialists in Poland vs Ukraine

Based on my investigation of existing candidates from Ukraine and Poland for FrontEnd Developer positions (Middle level; 2+ years of experience) I got the following result:

3. Conclusions

1. Ukraine is a very promising location with high intellectual capacity.
2. After the war, the cost of IT will be higher as there will be many more companies willing to invest in Ukraine and open offices there.
3. Ukrainians are considered to be the most efficient option for hiring based on feedback from Amazon, Google, and other western companies.
4. Cost of hiring specialists in Ukraine now is much lower than in Europe.
5. People are working in Ukraine now, and companies from US and Europe are not generally afraid to hire ppl there.
6. It is worth trying to hire Ukrainians abroad - the cost and the velocity of such hiring of talented resources should be at least competitive to any location worldwide.

My company has a wide range of positions for which Ukrainians with opened FOP living abroad are warmly welcomed:

• Middle Manual QA/QC
• Front-end Developer (CSS, HTML, Pure JS)
• App security analyst
• Intersystem Developer
• Optimizely Developer
• Business Analyst/Product owner
• Chief Technology Officer in Smart City business domain

And some other developer positions in Java, GoLang and .NET. You are greatly encouraged to send your CVs to my email ([email protected]) in case you want to receive a new position.

4. List of used references

1. https://progressholding.pl/en/costs-related-to-hiring-an-employee-with-an-employment-contract-in-poland/
2. https://cgolegal.com/costs-of-hiring-an-employee-in-poland/
3. https://www.mddp.pl/b2b-in-2022/#:~:text=Polish%20Deal%20%E2%80%93%20the%20most%20important,tax%20scale%20(17%2F32%25)
4. https://www.salaryexplorer.com/salary-survey.php?loc=173&loctype=1&job=627&jobtype=3