In brief
- When the entitlement arises: Indexation is applied when the Consumer Price Index (CPI), calculated on a cumulative basis from the base month, exceeds 103 per cent. The adjustment takes effect from the first day of the month following the month in which the relevant CPI is published.
- What is indexed: Only the portion of the salary within the subsistence minimum for able-bodied persons — 3,328 UAH in 2026.
- Base month in 2026: The CPI calculation for all employees begins in January 2026 (Article 41 of the Law of Ukraine ‘On the State Budget of Ukraine for 2026’ No. 4695-IX): if the salary has not been increased — 136.45 UAH (from June); if the salary was increased in February — 103.17 UAH (from June).
- How to avoid indexation: Increase the basic salary by an amount exceeding the current indexation rate. The month in which the salary is increased becomes the new base month.
- Obligation and liability: Indexation is mandatory for all employers, including private ones. Failure to pay the full salary entails a fine in accordance with Part 2 of Article 265 of the Labour Code.
When is salary indexation applied?
Indexation of the population’s monetary income is carried out when the consumer price index, calculated on a cumulative basis, exceeds the indexation threshold of 103% (Article 4 of Law of Ukraine No. 1282-XII). The CPI is published and calculated from the month following the base month.
The State Statistics Service publishes the official CPI for the reporting month no later than the 10th day of the following month (Article 3 of Law No. 1282-XII). Indexation payments commence on the first day of the month following the month of publication. Consequently, there are two months between the month in which the threshold is exceeded and the month of payment:
Example: The threshold is exceeded according to March data $\rightarrow$ the CPI is published in April $\rightarrow$ indexation is calculated from 1 May.
Although the regulatory requirement stipulates publication ‘no later than the 10th’, the official State Statistics Service announcement regarding the CPI for August 2026 in the database zakon.rada.gov.ua is dated 11 September 2026. This does not affect the actual calculation: use the actual date of publication as a guide.
Base month: what to use as a reference
The base month is the month in which the tariff rate or basic salary was increased. The CPI in the base month is taken as 100 per cent, and the cumulative calculation begins from the following month (paragraph 5 of CMU Order No. 1078).
Once the threshold of 103 per cent is exceeded, the CPI calculation starts afresh from the following month. The indexation amount already accrued is retained and added to the new amount until the next salary increase (paragraph 1¹ of Order No. 1078). For each employee, the base month is determined individually and recorded in the staffing table or in the order on salary adjustments.
Special rule for 2026
In accordance with Article 41 of Law of Ukraine No. 4695-IX (‘On the State Budget for 2026’), the calculation of the CPI on a cumulative basis begins in January 2026, which is taken as 100 per cent. The indexation amount accrued in December 2025 is not applied in January 2026.
Thus, for all employees, the base month is at least January 2026 (figures for 2025 are not included in the calculation). If an employee’s basic salary was increased at a later date, the month of that increase becomes the base month.
Formula and step-by-step calculation
In accordance with paragraph 4 of Order No. 1078, to calculate the indexation amount, follow these steps:
Multiply the employee’s income within the subsistence minimum by the CPI increase (as a percentage).
Divide the result by 100 per cent.
The portion of the salary exceeding the subsistence minimum for able-bodied persons (3,328 UAH in 2026) is not subject to indexation.
Calculation algorithm (base month — January 2026)
February: CPI = 101.0%. Cumulative total = 101.0% (threshold not exceeded).
March: CPI = 101.7 per cent. Cumulative total: 101.0 per cent × 101.7 per cent = 102.7 per cent (threshold not exceeded).
April: CPI = 101.4%. Cumulative total: 102.7% × 101.4% = 104.1%. The 103 per cent threshold has been exceeded!
Amount of CPI increase: 104.1 per cent − 100 per cent = 4.1 per cent.
Calculation of the amount: 3,328 UAH × 4.1 / 100 = 136.45 UAH.
Start of payments: As the CPI for April is published in May, the amount of 136.45 UAH will be paid monthly from June 2026.
New cycle: The count begins in May 2026.
Please note: If an employee works part-time or has not worked the full month, the indexation amount is calculated on the basis of full-time working hours but is paid in proportion to the time worked (clause 4 of Order No. 1078).
Consumer Price Index by month for 2026
| Month of 2026 | CPI compared to the previous month |
|---|---|
| January | 100.7% |
| February | 101.0% |
| March | 101.7% |
| April | 101.4% |
| May | 100.9% |
| June | 99.9% |
| July | 100.3% |
| August | 100.1% |
Indexation amounts depending on the base month in 2026
The calculation of the indexation amount for the base months of 2026 is set out below (for the minimum subsistence level 3,328 UAH as at August 2026):
| Base month | Threshold exceeded | Cumulative CPI | To be calculated from | Indexation amount |
|---|---|---|---|---|
| January 2026 (all those whose salary has not been increased since January) | April 2026 | 104.1% | June 2026 | 136.45 UAH |
| February 2026 | April 2026 | 103.1% | June 2026 | 103.17 UAH |
| March 2026 | not exceeded | 102.6% | — | none |
| April 2026 | not exceeded | 101.2% | — | none |
| May 2026 | not exceeded | 100.3% | — | none |
| June 2026 | not exceeded | 100.4% | — | none |
How to increase salaries without applying indexation
An increase in the basic salary (pay scale rate) resets the calculation: the month of the increase becomes the new base month. The rules set out in paragraph 5 of Order No. 1078 then apply:
Increase greater than indexation: If the amount of the salary increase exceeds the amount of indexation that would have been payable in that month, indexation is not paid.
Increase less than indexation: If the amount of the increase is less than the indexation due, the employee is paid the difference between the indexation amount and the amount of the increase.
Important: An increase in the amount of bonuses, additional payments or allowances without an increase in the basic salary does not alter the base month and does not exempt the employer from paying the indexation.
Which payments are subject to indexation
| Subject to indexation | Not subject to indexation |
|---|---|
| Basic salaries, pay scales, piecework rates | Payments calculated on the basis of average pay (holiday pay, sick pay) |
| Regular supplements, allowances and bonuses | One-off financial assistance |
| Guaranteed and compensatory payments of a permanent nature | Annual performance-related pay, maternity allowance |
Certain categories of employees
Part-time workers: Indexation is carried out at the main place of employment. Income from secondary employment is indexed only up to an amount which, together with the salary from the primary place of employment, does not exceed 3,328 UAH, on the basis of a certificate from the primary place of employment (clause 7 of Order No. 1078).
Transferred employees: Where an employee is transferred to another post, the special provisions of paragraph 10² of Order No. 1078 apply.
Diy City residents: Instead of indexation, the level of average remuneration specified by law is guaranteed (Article 2 of Law No. 1282-XII).
Employer’s liability
Wage indexation is a state guarantee. Liability is incurred for failure to calculate or for late payment:
Financial penalties: A breach is deemed to be the payment of a salary that is less than the full amount. In accordance with Part 2 of Article 265 of the Labour Code, the fine amounts to 3 times the minimum wage at the time the breach is detected (in 2026, with the minimum wage at 8,647 UAH, the fine amounts to 25,941 UAH).
During martial law, fines under Article 265 of the Labour Code do not apply if the employer has rectified the breach within the time limit specified in the State Labour Service’s order (Law of Ukraine No. 2136-IX).
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