On the back of the news that Ukraine scored #3 position in the world by the size of its shadow economy (46%), which is not projected to change much within the next 3-8 years, it’s not surprising that only 54% of locals report their wages are paid officially as per employment contract.
In fact, it gives us exactly 46% of workers that are paid “cash in envelopes”. According to the recent report by the Association of Chartered Certified Accountants, the level of undeclared economic activities in the country sits at around 46%. What a coincidence.
Ukraine: White, black, and grey wages
Employment portal HH.ua asked it’s users whether they are being paid wages officially or getting cash.
- 17% of respondents to the online survey stated they were paid in cash and had no official contract (“black” wages).
- 29% of respondents said they were paid cash partially, in addition to the official wage (“grey” wages”).
- 54% of employees reported receiving “white” (fully official) wages.
Apparently, half of employees in Ukraine are not paying taxes correctly. It is a sizable proportion.
- Among the workers who are paid cash, 30% receive all their remuneration unofficially.
- 47% of respondents get a larger portion (50-70%) as cash.
- 3% of users said they only get bonuses as banknotes in envelopes.
It should be noted that the majority of Head Hunter clients are white collar workers. Among the sales staff employed by small businesses the share of people who work for cash is likely to be higher.
Read also:
- White Wages vs. Black Wages: Only 3 Million Ukrainians Pay Taxes in Full
- Salaries vs. wages in Russia and Ukraine: What’s the difference?
- Why Ukraine has such low wages?
- Ukrainian prime minister explained when the minimum wage will be increased
Unfortunately, this situation has been common for internal business for decades. Perhaps, external management (well, Western recommendations) will deduce the Ukrainian salaries from the “gray” business-zone, as the current government of Ukraine seeks to harmonize their rules with the policy of the European Union.
I wish that was that was so here in the USA, I would be a billionaire by now. I have $35,520 us dollars deducted from my wages for taxes each year. In addition I have to paid state tax, Social Security and Medicare…Therefore my final income Tax each year, I ended paying the Government $61,213 dollars, you the people of Ukraine have it very easy with little or no deduction.
You cannot paid in cash here in the USA as an employee period.