Gig specialists’ vacation: how is income in the form of payment for annual paid leave taxable
Press service of the State Tax Service of Ukraine , published 16 July 2025 at 17:53 Chapter: News
Payment of annual paid leave by the Diia City resident to a gig employee is taxed at the 18% rate, not 5% as provided for remuneration under a gig contract.
According to legislation, a gig employee is entitled to the annual paid leave of 17 working days, unless the gig contract provides for a different duration. Expenses associated with paying for this leave are borne by the Diia City resident according to terms of the gig contract.
Expenses of the Diia City resident related to payment of the annual paid leave in performance of work (provision of services) of the gig specialist are not remuneration of the gig specialist for work performed (provided services) during a month. In this case, relations between the gig specialist and the Diia City resident are not subject to labor legislation.
Article 170 of the Tax Code of Ukraine stipulates that the following income of the gig specialists paid by the Diia City residents is taxed at the 5% rate, in particular:
- salary;
- gig contract fees, including fees for creating rights to commissioned works.
At the same time, remuneration of the gig specialist is funds paid to the gig specialist for performed work (provided services) during a month in the amount, procedure and terms determined by parties in the gig contract, taking into account provisions of the Law of Ukraine "On stimulating development of the digital economy in Ukraine".
For reference.
Gig contract is a civil law agreement between the gig employee and the Diia City resident. Under this agreement, the gig employee undertakes to perform work or provide services, and the Diia City resident undertakes to pay for them and provide appropriate conditions for their performance, taking into account social guarantees provided for by the law.
Gig specialist is individual who performs work or provides services under such contract.