Salary Indexation Calculator

How to use

1. Enter the employee's current monthly base salary.
2. Select the baseline reference month (month of last wage increase or January 2026).
3. Input the cumulative Consumer Price Index (CPI) inflation rate.
4. Indicate full-time or part-time working schedule.
5. Receive the calculated statutory indexation allowance and an executive script for salary review discussions.

How Statutory Salary Indexation Works in Ukraine

In Ukraine, salary indexation is governed by Law No. 491-IV and Cabinet Resolution No. 1078. All employers, including private commercial firms and sole entrepreneurs, are legally obligated to index wages when cumulative inflation thresholds are crossed.

For 2026, the State Budget law specifies that the Consumer Price Index starts accumulating from January (treated as 100%), with subsequent inflation indices compounded from February onward.

• Indexation does not apply to total gross earnings; it is legally capped at the statutory subsistence minimum for able-bodied persons;
• Any salary amount earned above this statutory ceiling is exempt from mandatory indexation;
• The obligation to pay indexation is triggered once the cumulative CPI exceeds the 103.0% inflation threshold.

Cumulative CPI Compounding & Base Month Rules

The State Statistics Service publishes monthly inflation figures. These monthly percentages are multiplied together in a compound chain starting from the month following the base month.

• Base month is the month when an employee's contractual base salary was most recently raised;
• If compound inflation exceeds 103.0%, indexation becomes payable in the month following the official publication date;
• If an employer grants a salary raise larger than the accrued indexation amount, that raise resets the calculation, establishing a new base month.

Calculation Example: 20,000 UAH Base Salary

Consider an employee earning a base monthly salary of 20,000 UAH with January 2026 designated as the base month.

• With an accrued indexation coefficient of 4.2%, the mandatory top-up applies solely to the subsistence minimum (3,328 UAH);
• Monthly statutory indexation equals: 3,328 UAH × 4.2% = 139.78 UAH;
• The remaining salary balance (16,672 UAH) receives zero mandatory inflation adjustment under the law;
• Total gross monthly compensation equals 20,139.78 UAH before taxes.

Key Compliance Rules for Payroll & HR

Essential compliance factors for Ukrainian labor law audits:

• Proportional part-time work: employees on partial schedules or medical leave receive indexation prorated to actual hours worked;
• Penalties: failure to index wages is classified as a violation of minimum state wage guarantees, incurring substantial fines per employee;
• Base pay adjustments: because statutory indexation only protects the meager subsistence minimum, competitive employers proactively raise base pay to match real market inflation.