Contents of the article
- Who sets the minimum wage and how?
- Can the minimum wage change during the year?
- Minimum wage in 2026: key figures
- Accrued wages and actual income
- Working hours as a condition for receiving the minimum wage
- Who most often receives the minimum wage?
- Official salary and shadow payments
- Minimum and average wages: a benchmark for real incomes in 2025
- How the minimum wage affects the state budget
- Why the increase in the minimum wage is not always felt
- Forecast for the coming years
- Conclusion
The minimum wage is the mandatory minimum wage set by the state for simple, unskilled work, below which the employer has no right to pay the employee for a full month or hour worked.
This is not a recommendation or a conditional benchmark. The minimum wage is a mandatory state guarantee. Its legal basis is Article 95 of the Labor Code of Ukraine and Article 3 of the Law of Ukraine “On Remuneration of Labor.” These norms determine the content and purpose of the minimum wage as the lower limit of remuneration.
Who sets the minimum wage and how?
The minimum wage is set by the Verkhovna Rada of Ukraine (Ukraine's parliament) on the recommendation of the Cabinet of Ministers of Ukraine. The relevant decision is adopted by the law on the State Budget of Ukraine for the relevant year.
When determining this indicator, the state relies on:
- macroeconomic forecasts;
- expected inflation rates;
- the state of public finances;
- social and defense spending needs;
- the situation on the labor market.
It is important to understand that the minimum wage is always the result of a compromise between the capabilities of the economy and the social needs of society. In wartime, this balance becomes particularly delicate, as the state is forced to simultaneously finance defense, social payments, and basic economic functions.
Can the minimum wage change during the year?
The minimum wage does not necessarily remain unchanged throughout the year. The State Budget Law may provide for its gradual increase, for example, from April 1 or July 1.
In addition, in the event of changes in economic conditions, the Cabinet of Ministers may initiate budget adjustments, and the Verkhovna Rada may adopt the relevant changes. Thus, the minimum wage is fixed only within the limits of the current budget decision, and not once and for all.
Minimum wage in 2026: key figures
The Law of Ukraine “On the State Budget of Ukraine for 2026”, adopted on December 3, 2025, establishes the following indicators:
- 8647 hryvnia per month;
- 52 hryvnia per hour;
- standard working hours — 40 hours per week.
These indicators apply to employees who fully comply with the established working hours.
Accrued wages and actual income
The minimum wage is set at the accrued amount, i.e., before taxes. This is what often causes misunderstandings.
The following are deducted from the accrued amount:
- 18% — personal income tax;
- 5% — military tax.
As a result, the actual income of an employee is less than the minimum established by law. It is this amount that determines the real possibilities of the family budget, which is why the increase in the minimum wage is less noticeable in everyday life.
Calculation example:
- Accrued – UAH 8,647;
- Taxes withheld – UAH 1,988.81;
- Net pay – UAH 6,658.19.
Thus, the net minimum wage after taxes is UAH 6,658.19.
Working hours as a condition for receiving the minimum wage
The right to receive the full minimum wage arises only if the full working hours have been worked. This means:
- 8 hours of work per day;
- 40 hours per week with a five-day working schedule.
If an employee works part-time, has a reduced working week, or performs work on a part-time basis, payment is made in proportion to the time actually worked. This complies with the law and is not a violation.
Who most often receives the minimum wage?
In practice, the minimum wage is typical for:
- simple and auxiliary jobs;
- part of the public sector;
- industries with low profitability;
- regions with a limited number of jobs.
For a significant proportion of employees, this is not a temporary phase, but a stable level of income over many years.
Official salary and shadow payments
It remains common practice for employees to receive the minimum wage officially and additional funds unofficially. In the short term, this may seem advantageous, but from a future perspective, such a scheme creates significant risks.
The consequences of low official income are:
- minimum pension accruals;
- limited social benefits;
- difficulties in obtaining loans;
- lack of a complete financial history.
It is official income that remains the basis for most financial and social decisions, as well as for access to banking services.
Minimum and average wages: a benchmark for real incomes in 2025
To assess the real level of incomes in the country, it is important to consider not only the minimum wage but also the average wage.
According to the State Statistics Service of Ukraine, in October 2025, the average official salary of a full-time employee before taxation was 26,913 hryvnia. Over the ten months of the year, it grew by approximately 25%, which exceeds the growth rate in 2024.
The highest average salaries were recorded:
- in Kyiv — 40,738 hryvnia;
- in the information and telecommunications sector — 65,047 UAH.
The lowest were in education, where the average salary was 16,984 UAH.
These figures refer only to official payments. Taking into account shadow payments, actual incomes in some sectors may be slightly higher, but it is the official salary that is decisive for pensions, social guarantees, and access to financial services.
In dollar terms, the average salary in 2025 reached about $641, which is more than a quarter higher than the average level recorded before the full-scale invasion.
How the minimum wage affects the state budget
An increase in the minimum wage has a direct effect on the budget:
- tax revenues increase;
- contributions to the Pension Fund increase;
- the financial base for social spending and defense is strengthened.
In wartime, this is critical. From the state's point of view, the minimum wage is one of the important tools for maintaining fiscal stability.
Why the increase in the minimum wage is not always felt
Along with the increase in the minimum wage, business costs rise for:
- the wage fund;
- the tax burden;
- the cost of goods and services.
Some of these costs are passed on to prices and ultimately to the end consumer. As a result, nominal incomes grow faster than real purchasing power.
Forecast for the coming years
The Budget Declaration for 2026-2028 provided for a gradual increase in the minimum wage:
- from January 1, 2026 — UAH 8,688 (forecast figure, actually approved at UAH 8,647);
- from January 1, 2027 — 9,374 UAH;
- from January 1, 2028 — 10,059 UAH.
These figures are very approximate forecasts and may actually differ depending on the macroeconomic situation and military risks.
Conclusion
The minimum wage does not provide a comfortable standard of living and does not guarantee financial security. At the same time, it is not a formal figure. In essence, the minimum wage is a basic economic indicator that:
- determines the lower limit of income;
- affects taxes and prices;
- forms social guarantees;
- is the financial basis for millions of people.
Its main role is to maintain basic stability. Awareness of this allows people to realistically assess their own capabilities and make informed financial decisions.
