The modern labor market is rapidly changing, offering more and more alternatives to traditional office employment. Freelancing, remote work, and project activities have become commonplace for millions of Ukrainians. However, the legal formalization of such relationships has long remained a gray area: either an employment contract that does not take into account flexibility or a civil-law contract that does not provide social guarantees. The solution to this problem is the gig contract - a special type of contract that appeared in Ukrainian legislation in 2021.
It was created specifically to regulate the work of freelancers, IT specialists, consultants, and other professionals who work outside the staff. By 2026, this instrument has gained significant popularity as it combines the flexibility of civil law relationships with elements of social protection. Understanding the essence of the gig contract is critically important for any specialist planning to work for themselves but wanting certain guarantees, as well as for employers seeking to legalize their relationships with freelance workers.
What is a gig contract and how does it work
When discussing the topic of what a gig contract is, it is worth mentioning the structure of such contracts, as well as compatible processes (conclusion of a gig contract).
The term gig contract comes from the English word gig, which means "project" or "side job." Essentially, a gig contract is a written agreement between the performer and the customer that regulates the performance of specific work or the provision of services without concluding a traditional employment contract. The main difference between a gig contract and classical employment lies in the absence of subordination to the internal labor regulations. The performer independently determines their schedule, decides where and when to work, while the customer is only interested in the final result.
In Ukraine, this instrument was introduced by the Law on "Stimulating the Development of the Digital Economy in Ukraine," which came into effect in 2021. The main goal of the gig contract is to bring out of the shadows the relationships between companies and freelancers, granting them legal status with a certain level of social protection. Under this contract, the performer has the right to receive sick leave payments equal to the minimum wage from the Social Insurance Fund, as well as pension experience. At the same time, they are not obliged to adhere to a schedule, write applications for vacation, or fulfill other internal regulations. A gig contract can be either fixed-term or indefinite. It can only be concluded electronically using a qualified electronic signature.
Legal status of gig contracts in Ukraine
The gig contract in Ukraine has a clearly defined legal status, regulated at the legislative level. It is neither an employment contract nor a civil-law contract, but occupies an intermediate position that has been termed as "special contract for the performance of work and provision of services." The legal basis for its application is Article 3-1 of the Labor Code of Ukraine, which was supplemented with relevant norms in 2021. To conclude a gig contract, the performer must be registered in a special register maintained by the Pension Fund of Ukraine. This is done through the Diya portal.
The customer under such a contract can only be a legal entity or an individual entrepreneur. It is important to note that a gig contract cannot be concluded between two individuals without the status of an entrepreneur. The relationships between them are regulated by a regular civil law contract for work. As of 2026, gig contracts are most commonly used in the fields of information technology, consulting, marketing, and creative industries. An advantage is that such a contract releases both parties from having to pay a single social contribution, as the performer is considered self-employed. Taxes and contributions are paid independently by the performer, making them a completely independent player in the market.
Parties to the gig contract and their role in the relationship
A gig contract involves two key parties, the rights and responsibilities of which significantly differ from traditional labor relations. The first party is the performer, an individual providing services or performing work. The performer must be registered in the register of insured individuals, which effectively confirms their status as a self-employed specialist. They independently determine their work schedule, bear responsibility for the result, and also pay taxes and keep account of their activities on their own. The second party is the customer, a legal entity or entrepreneur who needs certain work or services to be performed. The customer does not have the right to control the process of work of the performer, give mandatory instructions regarding the schedule or methods of work.
They evaluate only the final result. In a gig contract, there is no concept of subordination. The performer is not obliged to adhere to the internal labor regulations, wear corporate clothing, or fulfill managerial instructions not specified in the contract. An important feature is that the customer is not responsible for paying taxes on behalf of the performer. The entire burden of reporting lies on the freelancer themselves. The customer is also not obliged to provide the performer with a workplace, tools, or materials unless otherwise stated in the contract.
Terms of the gig contract and structure of the agreement
Despite its flexibility, a gig contract has a clearly defined structure and mandatory conditions without which it is considered unformed. Firstly, this is the subject of the contract. The parties must describe in detail what specific work or services are being performed. General phrases cannot be used. Secondly, this is the duration of the contract. The gig contract can be made for a specified term or be indefinite. In any case, the condition regarding the duration is mandatory. Thirdly, this is the procedure for acceptance and transfer of work results. The contract must contain a clear mechanism for how the performer reports on the completed work, and the customer accepts it.
Fourthly, this is the price of the contract and the payment procedure. The cost can be fixed for the entire volume, hourly, or depend on other indicators. Conditions regarding confidentiality are also important, especially if the performer has access to the customer's commercial secrets. The contract must also contain the details of the parties, including the registration number of the performer in the tax system. Separate sections address the grounds for premature termination. This can be non-performance of obligations, violation of deadlines, or simply the initiative of either party with prior notice. The gig contract is concluded exclusively in electronic form using a qualified electronic signature of both parties. A paper version is not permitted.
How to conclude a gig contract: procedure for registration
The procedure for concluding a gig contract in Ukraine is fully remote and automated. It consists of several sequential steps that are executed through the Diya portal. The first step is the registration of the performer. An individual wishing to work under a gig contract must submit a registration application to the register of insured individuals through the Diya portal. After verifying the data, the Pension Fund assigns a special number to the performer.
The second step is creating a draft contract. The customer forms a draft gig contract through their account on the Diya portal, specifying all essential conditions: subject, term, price, and the acceptance procedure for the work. The third step is agreeing and signing. The performer receives a notification about the need to review the draft. They can make their proposals or agree to the proposed version. After mutual consent, both parties sign the contract with their qualified electronic signatures. The fourth step is registering the contract.
The signed gig contract is automatically registered in the electronic registry. From this moment, it takes effect. It is important to note that making changes to the contract also occurs through the Diya portal. The parties cannot edit the paper version. The entire document flow is electronic. The law does not require additional notarization or stamps. This makes the procedure as fast and convenient as possible.
Payment for work and remuneration under the gig contract
Payment for work under a gig contract has its peculiarities that differ radically from ordinary wages. Firstly, the remuneration is determined exclusively by the agreement of the parties. It is not subject to the minimum guarantees provided for hired employees. The amount can be anything.
Secondly, payments are made according to the terms of the contract. This can be an advance, payment upon work completion, or hourly payment. The customer is not obliged to pay wages twice a month as required for staff employees.
Thirdly, the performer independently pays taxes. They are required to register as a self-employed person and pay a single tax or personal income tax and military levy. The customer is not a tax agent and, therefore, is not obliged to withhold taxes from the remuneration. Regarding social guarantees, the performer is entitled to sick pay and maternity payments. The amount of such assistance is calculated based on the minimum wage rather than the actual income. The period of work under the gig contract is also counted towards the insurance record for retirement. However, to receive a full retirement pension, the performer needs to pay additional contributions independently. Payment for work under a gig contract is not limited to maximum sums. This makes it attractive for highly paid specialists. Any payment delays are regulated by the terms of the contract and civil legislation.
Rights and obligations of the parties to the gig contract
A gig contract establishes a specific balance of rights and obligations that differs from both labor contracts and typical civil law contracts. The performer has the right to independently determine their work schedule and the place of task execution. They are not obliged to sit in the office from nine to six. They also have the right to engage third parties to fulfill the work if it is not explicitly prohibited by the contract. This allows delegating some tasks to subcontractors.
The performer has the right to timely payment for their work results. If the customer delays payment, the performer can demand penalties or interest for delay. At the same time, the performer is obliged to perform the work qualitatively and within the established timeframe. They bear responsibility for the defects in the result. The customer, in turn, has the right to require the performer to comply with the terms of the contract, as well as confidentiality. They have the right not to pay for work performed with violations. The customer must accept the work if it meets the terms.
They are also obliged to provide the performer with all necessary information or access to resources in a timely manner if provided for in the contract. An important aspect is the absence of an obligation for the customer to provide the performer with tools or equipment. By default, the performer works with their own means and at their own expense. The customer is also not obliged to pay for downtime or the performer's vacation, as payment is made only for results. Neither the performer nor the customer has the right to demand reinstatement at work. A gig contract does not establish labor relations; hence, the dismissal procedure does not apply. The contract simply terminates by mutual agreement of the parties or unilaterally.
Social guarantees and taxation under the gig contract
Social guarantees and taxation are key issues when choosing a gig contract. The performer working under such a contract has the right to receive benefits for temporary incapacity to work. That is, if they fall ill, they can receive sick leave pay. The amount of such assistance is calculated based on the minimum wage valid at the time of the insurance case, rather than the performer's actual income. Additionally, the performer has the right to receive maternity and childbirth benefits. This is important for women freelancers.
The period of work under the gig contract is counted towards the insurance record necessary for retirement. However, for the experience to be counted, the performer must independently pay the single social contribution. The minimum size of the single social contribution is established by the state. As for taxation, the performer under a gig contract is not an employee. They are required to independently register with the tax authorities as a sole proprietor or as a person conducting independent professional activity. They calculate and pay personal income tax at the rate of 18% and military levy at the rate of 1.5% of the income amount on their own. The customer does not act as a tax agent. They simply transfer remuneration to the performer's account, who then reports to the state on their own. If the performer chooses a simplified taxation system, they can pay a single tax at rates of 5 or 3% depending on the group. It is important to remember that violation of tax rules is the performer's responsibility, not the customer's.
Differences between gig contracts and employment contracts
The gig contract has fundamental differences from traditional employment contracts that are important to consider when choosing the form of cooperation. In an employment contract, the employee is subordinate to the internal labor regulations. They are required to adhere to the work schedule and follow the manager's instructions. In a gig contract, there is no such subordination. The performer is only interested in the result. Under an employment contract, the employer is obliged to provide the employee with a workplace, tools, and safety equipment. Under a gig contract, the performer works with their own means. Under an employment contract, the employer pays the single social contribution for the employee and withholds taxes from their salary. Under a gig contract, the performer independently bears all tax obligations. An employment contract can be made in any form but is usually written. A gig contract is concluded exclusively in electronic form through the Diya portal.
An employment contract entails payment for worked hours. A gig contract entails payment for results. In an employment contract, the probation period cannot exceed three months. In a gig contract, terms are defined by mutual agreement of the parties. An employee under an employment contract has the right to paid vacation. The performer under a gig contract does not have such a right as they are paid only for work performed. When violating an employment contract, an employee can appeal their dismissal in court and demand reinstatement. When terminating a gig contract, such a right does not exist as it is not about dismissal but the end of obligations. An employment contract can be indefinite or fixed-term. A gig contract always specifies a particular task or period for providing services.
Problematic moments and risks of using gig contracts
Despite the advantages, the gig contract has a number of problematic moments and risks that both parties should be aware of. The first risk - the possibility of reclassification of the contract. If controlling bodies prove during an inspection that the relationships under the gig contract are actually employment relationships, the contract may be recognized as an employment contract. This will require the customer to pay all taxes and contributions, as well as penalty sanctions. For the performer, this may mean additional tax assessments. The second risk - the absence of stable income. The customer can terminate cooperation at any time if the work is unsatisfactory.
The performer does not receive severance pay. The third risk - the lack of paid vacation and sick leave in full. Although the performer has the right to sick leave, the amount is meager compared to actual income. For a highly paid specialist, this is a significant loss. The fourth risk - the need to independently track taxes. Not all freelancers have the knowledge or time for this. Mistakes in reporting can lead to fines. The fifth risk - the possibility of recognition of the contract as unformed. If the parties do not adhere to the electronic form or do not sign the contract with a qualified electronic signature, it will not have legal force. The sixth risk - court disputes. It will be difficult for the parties to prove the fact of work completion if the subject or procedure for acceptance and transfer is not clearly defined in the contract. The seventh problem - a limited circle of customers. Gig contracts can only be concluded by legal entities and individual entrepreneurs. Individuals without such status cannot be customers. The eighth risk - turnover. Performers working under gig contracts often collaborate with several customers simultaneously. They may suddenly stop working if they find a more profitable project.