13th salary - what it is, how it is paid, and whether it is compulsory in Ukraine
In the system of remuneration, alongside the main salary, bonuses, and allowances, there is the concept of '13th salary'. This term is not an official legislative definition but is widely used in business transactions and labor relations. The 13th salary (13th salary refers to) is understood as an additional reward for the employee based on the year's results, which is usually paid before the New Year's holidays.
Many employees perceive it as a mandatory bonus, but in reality, this is not entirely true. As of 2026, there is no legislative obligation for employers in Ukraine to pay a 13th salary. It is exclusively a voluntary initiative of the company, which must be established in internal documents.
A correct understanding of the nature, conditions, and procedure for paying the 13th salary is important for both employers who wish to motivate their staff and employees who are counting on receiving such incentives.
The essence of the concept of the 13th salary in the remuneration system
It is worth starting with what the 13th salary is, especially the 13th salary in Ukraine. The term '13th salary' originated during the Soviet period when companies paid employees an additional salary equal to their average monthly earnings at the end of the year. Today, the 13th salary is understood as an incentive payment based on the results of work for the year. It is not a separate type of salary but is one form of employee bonuses.
The main goal of the 13th salary is to motivate employees to achieve high results, increase labor productivity, reduce employee turnover, and create a positive employer image. From an employee's perspective, the 13th salary is a pleasant bonus before holidays that allows for an improvement in their financial situation. From an employer's perspective, it is a tool for non-material motivation that helps retain valuable employees. It is important to understand that the 13th salary is not a guaranteed payment. It depends on the financial condition of the company, the profit generated over the year, as well as the personal contribution of each employee. If there is no profit or unsatisfactory business results, the employer has the right not to pay the 13th salary.
Is the 13th salary provided for by Ukrainian legislation?
Current Ukrainian legislation does not contain provisions obliging employers to pay a 13th salary. The Labor Code of Ukraine and other regulatory legal acts do not use the term '13th salary'. Legislation only establishes general principles of remuneration, determines the minimum wage, and guarantees, but does not regulate issues of additional incentive payments. This means that the decision to pay a 13th salary is made by each employer independently.
The obligation to pay the 13th salary may arise only in cases where it is explicitly provided for in the internal documents of the company: collective agreement, remuneration policy, bonus regulations, internal labor regulations, employment contracts or other local acts. If the internal documents provide for the payment of the 13th salary, the employer is obliged to pay it under the terms defined in these documents. In the absence of such documents, the employee has no right to demand the payment of the 13th salary, even if the employer paid it in previous years. Courts generally take the view that the payment of the 13th salary is a right and not an obligation of the employer unless otherwise provided by internal documents.
The 13th salary as a form of bonus and employee motivation
The 13th salary is a type of incentive payment aimed at motivating employees to achieve better results. As a form of bonus, the 13th salary has several features. First, it is paid based on the results of the year, meaning it covers a long evaluation period. Second, it usually depends on the overall performance of the entire company, not just individual employee achievements. Third, the size of the 13th salary is often tied to the average monthly salary or to the position's salary.
The motivational function of the 13th salary is that the employee understands: the better they worked throughout the year, the greater their contribution to achieving the company's goals, the higher the reward they will receive at the end of the year. This motivates employees to work more productively, maintain labor discipline, and improve their qualifications. In addition, the 13th salary helps to reduce turnover, as employees are interested in waiting until the end of the year to receive the additional reward. For the employer, the 13th salary is a flexible motivation tool that allows for encouraging the best employees without increasing the permanent part of the salary.
The difference between the 13th salary and bonuses or material assistance
The 13th salary is often confused with other types of payments, such as regular bonuses or material assistance. However, there are fundamental differences between them. A bonus is usually paid for achieving specific results: meeting a plan, exceeding standards, the absence of defects, saving resources, etc. It can be paid monthly, quarterly, or for other periods. The bonus amount is often determined as a percentage of the salary or a fixed sum. The 13th salary, unlike the bonus, is paid exclusively based on the results of the year and is usually tied to the average monthly salary.
A bonus may not be paid for certain periods if targets are not met. The 13th salary, if provided for in internal documents, is usually paid as a matter of course (provided there is a profit). Material assistance, unlike the 13th salary, is not linked to work results. It is paid due to certain events: the birth of a child, marriage, the death of a close relative, difficult financial situation, etc. Material assistance can be either one-time or regular. Unlike the 13th salary, material assistance is taxed on personal income tax on general grounds (except in cases provided for by law). Another difference is that bonuses and the 13th salary are included in the calculation of the average salary for vacation pay, sick leave, etc., while material assistance is not included.
Conditions and criteria for paying the 13th salary in a company
Conditions and criteria for paying the 13th salary are determined by each company independently and are secured in internal documents. The main conditions include: the presence of profit based on the year's results; the enterprise achieving planned indicators; the absence of disciplinary penalties for the employee; a full year of work (or a certain part of it). Payment criteria may vary depending on the category of employees. For example, for managers, the criterion may be the fulfillment of key performance indicators; for workers - meeting production norms, absence of defects; for office workers - adherence to deadlines for task completion, quality of work.
Many companies set a minimum length of service at the enterprise for receiving the 13th salary (for example, at least 6 months). Employees who were dismissed before the end of the year usually have no right to the 13th salary unless otherwise provided for in internal documents. Employees who are on long-term leave (maternity leave, childcare leave) may receive the 13th salary proportionally to the time worked. It is important to note that the decision to pay the 13th salary is made by the head of the company based on submissions from the heads of structural units. In the absence of profit or unsatisfactory business results, the employer has the right not to pay the 13th salary, even if it is provided for in internal documents (provided that such a possibility is outlined in the documents).
Procedure for establishing the 13th salary in internal documents
In order for the 13th salary to become a mandatory payment rather than just a goodwill gesture from the employer, it needs to be established in the internal documents of the enterprise. The main document is the collective agreement, which may define the general principles of awarding bonuses based on the year's results. The detailed procedure for paying the 13th salary is advisable to outline in the Regulation on Remuneration or the Policy on Bonuses. These documents should contain the following sections:
List of categories of employees entitled to the 13th salary.
Conditions and criteria for payment.
Calculation procedure for the 13th salary.
List of grounds for depriving the 13th salary or reducing its size.
Procedure for formalizing the decision to pay.
Payment deadlines.
The Bonus Regulation is approved by the head of the enterprise. If there is a trade union organization, it must be agreed upon with it. In addition, the condition for paying the 13th salary may be directly included in the employment contract with the employee. The employment contract may refer to the Bonus Policy.
It is important that internal documents do not contradict legislation and do not worsen the employees' situation compared to what is provided by law. After the documents are approved, they should be communicated to all employees for acknowledgment. In the absence of proper documentation of the 13th salary in internal documents, the employee will not be able to prove their right to receive it in court.
How the 13th salary is calculated: approaches and logic of accrual
The calculation of the 13th salary can be carried out in various ways depending on the approaches established in the internal documents of the enterprise. The most common calculation is one where the 13th salary equals the average monthly earnings of the employee for the year. For this, the total amount of payments to the employee for the year (salary, bonuses, allowances) is divided by 12. The resulting amount is the 13th salary. Another approach is to set the 13th salary at a fixed amount, for example, one salary.
In this case, the employee receives an amount equal to their salary for the month of December. A third approach is proportional accrual depending on the time worked. Employees who have worked the full year receive the full 13th salary, while those who were hired or dismissed during the year receive a proportional share. A fourth approach is a differentiated amount based on work results and personal contribution. In this case, the size of the 13th salary is determined by the manager upon the submission of the direct supervisor. When calculating the 13th salary, it is important to consider taxation. The 13th salary is an employee's income, so personal income tax (18%) and military tax (1.5%) are withheld from it. The unified social contribution (22%) is also accrued. The employer is obliged to reflect the 13th salary in the reporting.
Factors influencing the amount of payment
The amount of the 13th salary is not fixed and can vary depending on many factors. The main factor is the financial condition of the enterprise based on the year's results. If the enterprise made a significant profit, the amount of the 13th salary may be increased. If the enterprise incurred losses, the payment may be canceled or reduced. The second factor is the achievement of planned indicators by the enterprise. If the plan is met or exceeded, the 13th salary is paid in full.
If the plan is not met, the amount may be reduced in proportion to the percentage of completion. The third factor is the employee's personal contribution. Employees who have achieved significant successes or completed especially important tasks receive a larger reward. Employees who have disciplinary penalties or have violated labor discipline may be deprived of the 13th salary entirely or partially. The fourth factor is length of service in the enterprise. Employees who have been with the company for over a year receive the full 13th salary. Those who have worked less than a year receive a proportional share. The fifth factor is the employee's category. Managers and specialists usually receive a higher 13th salary than workers. The sixth factor is industry affiliation. In highly profitable industries (e.g., extractive industries, financial sector), the size of the 13th salary is higher. In the budget sector, the 13th salary is either absent or minimal.
The seventh factor is the economic situation in the country. During periods of economic growth, the 13th salary is paid more frequently and in larger amounts. During periods of crisis, companies often refrain from its payment.
Taxation of the 13th salary and accounting representation
The 13th salary, like any other payment to an employee, is subject to taxation on general grounds. The employer is obliged to withhold personal income tax (PIT) at a rate of 18% and military tax at a rate of 1.5% from the 13th salary amount. In addition, the unified social contribution (USC) is accrued at a rate of 22% on the 13th salary amount. The PIT and military tax are withheld directly from the payment amount. For example, if the 13th salary amounts to 10,000 hryvnias, the PIT is 1,800 hryvnias, the military collection is 150 hryvnias, and the amount payable to the employee is 8,050 hryvnias.
The USC is accrued on the 13th salary amount over and above the main payment and is paid by the employer from their own funds. In tax accounting, the 13th salary is considered as labor payment expenses and reduces the taxable income for profit tax. In accounting, the accrual of the 13th salary is reflected in the debit of expense accounts (23 'Production', 92 'Administrative Expenses', 93 'Sales Expenses') and the credit of account 66 'Settlements for wages'. The payment of the 13th salary is reflected in the debit of account 66 and the credit of either account 31 'Bank Accounts' or 30 'Cash'. The employer is obliged to include the amount of the 13th salary in the unified social contribution reporting and in the tax reporting according to form 1-DF. The representation of the 13th salary in accounting must be supported by primary documents: orders from the manager for payment, calculation statements, payment orders.
The practice of paying the 13th salary in Ukraine
The practice of paying the 13th salary in Ukraine is quite common, especially in large companies and private sector enterprises. As of 2026, about 40% of Ukrainian enterprises pay their employees a 13th salary. This is most common in IT companies, banks, insurance companies, large retail chains, food industry enterprises, and logistics companies. In the budget sector (government institutions, schools, hospitals), the 13th salary is generally not paid due to budgetary constraints. However, some profitable state enterprises may encourage employees with additional rewards.
The size of the 13th salary in Ukraine ranges from half a salary to three salaries. The most common amount is one salary. Payment of the 13th salary in Ukraine is traditionally tied to New Year's and Christmas holidays. Most enterprises pay it in December. However, some companies pay the 13th salary in January or February, after summarizing the year's results. In recent years, there has been a trend towards a decrease in the number of enterprises that pay the 13th salary. This is related to economic instability, rising labor costs, and changing approaches to employee motivation. Many companies are moving towards quarterly or monthly bonuses instead of one-time payments at the end of the year.
Common mistakes and myths about the 13th salary
There are many common mistakes and myths regarding the 13th salary that mislead both employees and employers. Myth one: the 13th salary is a mandatory payment provided by law. In fact, legislation does not oblige employers to pay the 13th salary. It is exclusively a voluntary initiative of the enterprise. Myth two: the 13th salary is paid to all employees without exception. In reality, the conditions for payment are defined in internal documents, which can specify different approaches for different categories of employees. Myth three: the 13th salary is paid in a mandatory amount. In fact, the amount can vary depending on the financial state of the enterprise.
Myth four: the 13th salary is not taxable. In fact, it is taxed on general grounds. Myth five: the 13th salary can be demanded through the court if it was paid in previous years. In reality, if the 13th salary is not provided for in internal documents, the court will deny the claim. Mistakes of employers: lack of proper documentation of payment conditions in internal documents; omission of the 13th salary in reports; incorrect calculation of the amount; violation of payment deadlines. Mistakes of employees: expecting a 13th salary when it is not provided for; incorrect calculation of the expected amount; unjustified demands on the employer. Avoiding these mistakes will help build transparent and fair relationships between employers and employees.
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