In brief
- What is compensated: In the event of dismissal, an employee is paid financial compensation for all unused days of annual leave and additional social leave for children (Article 19), regardless of how many years they have been accrued (Article 24(1) of the Law ‘On Leave’).
- Basic formula: Earnings for the calculation period ÷ calendar days in that period × unused days (paragraph 7 of Order No. 100).
- Special provision for ‘old’ days: Leave days accrued before 31 December 2023 are calculated separately — based on payments accrued in 2023 (paragraph 2, sub-paragraph 2 of Order No. 100).
- Impact of martial law: Public holidays and non-working days are not excluded from the denominator. For 12 full months, 365 (or 366) days are taken into account (Article 6 of Law No. 2136-IX suspended the application of Article 73 of the Labour Code).
- Taxation: The calculation is based on the accrued amount, from which personal income tax (18 per cent) and the military levy (5 per cent) are deducted.
- Payment deadlines: All amounts due are paid on the day of termination of employment (Article 116 of the Labour Code). In the event of a delay in settlement, payment of average earnings is provided for, but not exceeding 6 months (Article 117 of the Labour Code).
Calculation formula in accordance with Order No. 100
The calculation is governed by the Procedure for Calculating Average Wages (CMU Resolution No. 100 of 8 February 1995): paragraph 7 sets out the formula, paragraph 2 — the calculation period, whilst paragraphs 3 and 4 — the list of payments.
Step 1. Determine the number of unused calendar days: annual leave (pro-rata for a partial working year) plus all days of social leave for children, minus days taken in accordance with orders.
Step 2. Divide the total earnings for the calculation period by the number of calendar days in that period — this is the average daily wage.
Step 3. Multiply the average daily wage by the number of unused days. Days accrued up to 31 December 2023 are calculated separately in steps 2 and 3.
The reference period is the last 12 calendar months of employment preceding the month in which the compensation is paid (paragraph 1, clause 2). If the period of employment is less than one year, the actual period of employment is taken: from the first day of the month following the date of employment to the first day of the month in which the compensation is paid. The month of recruitment is counted as a full month if the date of employment is the first working day of the month (clause 2).
Example 1.
Conditions: Dismissal on 30 September 2026, monthly salary — 20,000 UAH. Calculation period: September 2025 – August 2026 (excluding excluded days). 24 days of annual leave remain unused.
Earnings for the period: 20,000 × 12 = 240,000 UAH.
Calendar days: 365.
Average daily salary: 240,000 ÷ 365 = 657.53 UAH.
Compensation accrued: 657.53 × 24 = 15,780.72 UAH.
Deductions: personal income tax (18 per cent) — 2,840.53 UAH; military levy (5 per cent) — 789.04 UAH.
Amount payable (net): 12,151.15 UAH.
Which types of leave are compensated and which are not
The list is exhaustive: Part 1 of Article 24 of the Law ‘On Leave’ provides for compensation only for annual leave and additional social leave for employees with children (Article 19). Other types of leave are not compensated in cash.
| Type of leave | Entitlement | Compensated upon termination of employment |
|---|---|---|
| Basic annual leave (not less than 24 calendar days) | Article 6 | Yes |
| Additional annual leave for harmful and arduous working conditions (up to 35 calendar days) | Article 7 | Yes |
| Additional annual leave for the special nature of work (up to 35 calendar days) and for irregular working hours (up to 7 calendar days) | Article 8 | Yes |
| Additional social leave for employees with children or an adult child who has had a disability since childhood (subgroup A of Group I) (10 calendar days; up to 17 on certain grounds) | Article 19 | Yes, for all unused days |
| Study and creative leave | Articles 13–16 | No |
| Additional leave for combatants | Article 16-2 | No (for civilian employees) |
| One-off leave on the birth of a child | Article 19-1 | No |
| In connection with pregnancy and childbirth, for childcare, adoption | Article 4 | No |
| Without pay | Articles 25, 26 | No (unpaid) |
Days accrued up to 31 December 2023: two calculation periods
The calculation rule is set out in paragraph 2 of clause 2 of Order No. 100:
‘The calculation of the average wage for the payment of compensation for unused annual leave to which an employee is entitled up to 31 December 2023 shall be based on payments accrued in 2023.’
| When entitlement to days was acquired | Which payments are used to calculate the average daily rate | Denominator |
|---|---|---|
| By 31 December 2023 | Payments accrued in 2023 | Calendar days in 2023 during which the employment relationship existed, minus excluded periods (365 for a full year) |
| From 1 January 2024 | The last 12 calendar months preceding the month of payment | 365 (366) days of the period minus excluded periods |
Allocation of days: The right to annual leave arises for each working year (Article 6 of the Law ‘On Annual Leave’). Therefore, ‘old’ days are those for years ending before 31 December 2023, plus a pro rata portion for the year that had elapsed as at that date, minus any days taken prior to that date.
We recommend requesting a written calculation from the HR department for each period separately, as the total amount depends on this.
Example 2.
Conditions: The employee has 30 unused days: 12 days accrued up to 31 December 2023, and 18 days after that date. Earnings for 2023 — 180,000 UAH; payments over the last 12 months — 240,000 UAH. There are no excluded periods.
For 2023: 180,000 ÷ 365 = 493.15 UAH; for the 12 ‘old’ days: 493.15 × 12 = 5,917.80 UAH.
For the last 12 months: 240,000 ÷ 365 = 657.53 UAH; for 18 ‘new’ days: 657.53 × 18 = 11,835.54 UAH.
Total accrued: 5,917.80 + 11,835.54 = 17,753.34 UAH.
How martial law has changed the formula
Previously, public holidays and non-working days were excluded from the denominator (Article 73 of the Labour Code) — over 12 months, this amounted to 354 days. The provision of Article 6 of the Law of Ukraine No. 2136-IX of 15 March 2022 suspended the application of Article 73 of the Labour Code. Therefore, the denominator is now 365 days (or 366 days in a leap year).
Employers’ rights during martial law:
Compensation is not cancelled. In the event of dismissal, the payment of monetary compensation under Article 24 of the Law ‘On Leave’ is mandatory (paragraphs 5–6 of Part 1 of Article 12 of Law No. 2136-IX).
Restrictions on the granting of leave. An employer may refuse to grant unused annual leave days during wartime. Employees of critical infrastructure facilities or the defence sector may be refused most types of leave (except for maternity, childbirth and childcare leave).
Restrictions on duration. An employer has the right to limit the basic annual leave for the current year to 24 calendar days. Days exceeding this limit are carried over to the period following the lifting of martial law.
What has changed under martial law
Previously, public holidays and non-working days were excluded from the denominator (Article 73 of the Labour Code) — over 12 months, this amounted to 354 days. The provision of Article 6 of the Law of Ukraine No. 2136-IX of 15 March 2022 suspended the application of Article 73 of the Labour Code. Therefore, the denominator is now 365 days (or 366 days in a leap year).
Employers’ rights during martial law:
Compensation is not cancelled. In the event of dismissal, the payment of monetary compensation under Article 24 of the Law ‘On Leave’ is mandatory (paragraphs 5–6 of Part 1 of Article 12 of Law No. 2136-IX).
Restrictions on the granting of leave. An employer may refuse to grant unused annual leave days during wartime. Employees of critical infrastructure facilities or the defence sector may be refused most types of leave (except for maternity, childbirth and childcare leave).
Restrictions on duration. An employer is entitled to limit the basic annual leave for the current year to 24 calendar days. Days exceeding this limit are carried over to the period following the lifting of martial law.
Payments taken into account and excluded periods
The calculation includes all accrued wages in accordance with the law and the terms of the employment contract (paragraph 1 of clause 3 of Order No. 100).
| Payment | Included in earnings | Basis |
|---|---|---|
| Salary, additional payments and allowances | Yes, in the month for which they were accrued | paragraphs 1–2 of clause 3 |
| Bonuses and other incentive payments based on performance | Yes, allocated to the months of the period for which they are accrued | paragraph 3, sub-paragraph 3 |
| Sick pay | Yes (for holiday pay and compensation) | paragraph 4, clause 3 |
| Holiday pay and other payments during the period of average earnings retention (business trips, forced absence) | Yes (for holiday pay and compensation) | paragraph 4, clause 3 |
| Lump-sum payments: holiday pay itself, financial and severance assistance, retirement assistance | No | clause 4 |
| Bonuses for inventions and rationalisation proposals; payments on public holidays and anniversaries | No | clause 4 |
| Travel allowances and relocation compensation, pensions and state benefits, the cost of holiday vouchers | No | clause 4 |
| Salary from secondary employment | No (at the main place of work) | para. 4 |
Excluded periods: The following periods are excluded from the calculation period: during which, in accordance with the law, the employee did not work and their earnings were not retained, or were retained only partially (unpaid leave, downtime, parental leave). These days reduce the denominator.
How many days are compensated for an incomplete year
For a partial working year, annual leave days are calculated in proportion to the time worked.
Calculation formula:
Days of compensation = (Leave days for a full year × Calendar days of leave entitlement) ÷ Calendar days of the year
Additional social leave for children (Article 19) is not prorated — it is compensated in full (10 or 17 days) for each calendar year, regardless of the time worked.
Example 3.
Conditions: The employee was hired on 2 February 2026 and dismissed on 31 August 2026. Salary: 20,000 UAH. Duration of leave: 24 calendar days.
Calculation of days: 211 days worked. Holiday entitlement accrued: 24 × 211 ÷ 365 = 13.87 ≈ 14 days.
Calculation for the period: February – July 2026 (181 days, earnings of 120,000 UAH).
Average daily wage: 120,000 ÷ 181 = 662.98 UAH.
Compensation accrued: 662.98 × 14 = 9,281.72 UAH.
Compensation without resignation
It is possible to exchange leave for money without resigning, but subject to strict restrictions (Article 24 of the Law ‘On Leave’):
Partial exchange: Only part of the annual leave is compensated. Additional social leave for children (Article 19) is not subject to such substitution whilst the employee continues to work.
Mandatory minimum: In the current working year, an employee must actually take at least 24 calendar days of annual leave (letter from the Ministry of Social Policy dated 21 June 2012 No. 207/13/116-12).
Prohibition for minors: Persons under the age of 18 are prohibited from having any type of leave replaced by financial compensation.
A right, not an obligation: Substitution is a right of the employer, not an obligation. Refusal to grant such a request is not considered a breach.
Example. An employee is entitled to 24 days’ annual leave and 7 days’ leave for irregular working hours. If the 24 days have already been taken, the remaining 7 days may be replaced with compensation upon request.
Sample request:
I request that 7 calendar days of annual additional leave for irregular working hours for the current working year be replaced with monetary compensation. The annual basic leave of 24 calendar days for this working year has been taken in full.
Taxes, payment deadline and delay in settlement
Taxation: The compensation forms part of the wage fund. Personal income tax (18 per cent) and the military levy (5 per cent) are deducted from it. The employer also calculates the Unified Social Contribution at a rate of 22 per cent (for employees with disabilities — 8.41 per cent, Article 8 of Law No. 2464-VI).
Payment deadline: Settlement is carried out on the day of dismissal (Article 116 of the Labour Code). If the employee did not work on that day, payment is made no later than the day following the submission of the claim.
Liability for delay: In the event of a delay in settlement due to the employer’s fault (in the absence of a dispute regarding the amount), the employee shall be paid their average earnings for the entire period of the delay, but not exceeding 6 months (Article 117 of the Labour Code). If the amount is disputed, the court shall determine the amount of compensation.
Sample claim for final settlement:
I demand that a final settlement be made in connection with my dismissal and that financial compensation be paid for unused days of annual leave (according to my calculations — 24 calendar days). The sums due to me were not paid on the day of my dismissal, thereby breaching Article 116 of the Labour Code of Ukraine. I also request payment of my average earnings for the entire period of the delay in settlement, pursuant to Article 117 of the Labour Code of Ukraine.
Servicemen, conscripts and certain categories of employees
Military personnel: In the year of discharge from service, annual leave is granted at the rate of 1/12 of the total service period for each full month of service. Compensation is paid from the service allowance for all unused days (Article 10-1 of Law No. 2011-XII).
Mobilised employees: Employees called up for military service during mobilisation shall be paid compensation for all unused days of annual and parental leave upon their application. The application must be submitted no later than the last day of the month in which the employee was released from their duties (Article 24(2) of the Law ‘On Leave’).
Sample application form for a mobilised employee:
I request payment of financial compensation for all unused days of annual leave due to my conscription into military service during mobilisation, pursuant to Part 2 of Article 24 of the Law of Ukraine ‘On Leave’.
Part-time workers and fixed-term contracts: All citizens working under an employment contract are entitled to leave and compensation (Article 2 of the Law ‘On Leave’). However, earnings from secondary employment are not taken into account when calculating the average salary at the main place of work (paragraph 4 of Order No. 100).
Job vacancies on Injobe: where to look after your final pay
There are 28 active job vacancies on Injobe, of which 13 are remote roles — 46.4 per cent. Vacancies for HR professionals and accountants can be found under the headings ‘Consulting, Accounting, Audit’ and ‘Recruitment, HR’. The remaining positions can be found in the list of all vacancies.
Checklist: what to check and what to challenge with your employer
Correct calculation of days:
Count the unused days for each type of leave as stated in the orders and divide them into ‘old’ (accrued before 31 December 2023) and ‘new’.- If compensation was paid only for the current year: Objection: Compensation is calculated for all days accrued over all years of service (Article 24(1) of the Law ‘On Leave’).
- If an application for payment upon dismissal is required: Objection:An application is only required to receive compensation without termination of employment or upon conscription into military service. Upon termination of employment, payment is the employer’s obligation without the need for an additional application (Article 24).
- If 14 days’ pay have been paid and the employer offers to compensate for the remainder without termination of employment: Objection: A portion of annual leave may only be replaced with payment after the employee has actually taken at least 24 days of annual leave for the current working year (Article 24).
- If they refuse on the grounds of a lack of funds or martial law: Objection: Full settlement must be made on the day of dismissal (Article 116 of the Labour Code). The provisions of Article 12 of Law No. 2136-IX restrict the granting of time off in lieu, but do not preclude the payment of monetary compensation.
