Single Tax in Ukraine 2026: What Will Change for Entrepreneurs and Small Businesses
The government’s draft State Budget for 2026 includes specific indicators for key social standards that directly affect the amount of tax payments for sole proprietors (FOPs).
As of January 1, 2026, the minimum wage in Ukraine is set to rise to 8,647 UAH, which is 647 UAH more compared to 2025. The subsistence minimum for able-bodied persons will be set at 3,328 UAH, an increase of 300 UAH from last year.
These indicators not only determine the level of minimum social benefits but also automatically affect the base for calculating the single tax, the unified social contribution (USC), and the permissible annual income limits for all three FOP groups.
FOP Group 1: Tax Burden and Limits
Group 1 entrepreneurs in 2026 will be required to pay a single tax equal to 10% of the subsistence minimum for able-bodied persons, which amounts to 332.8 UAH per month.
USC for all groups, according to the law, equals 22% of the minimum wage, which is 1,902.34 UAH per month.
Military levy for Group 1 is 864.7 UAH per year.
The annual income limit for Group 1 is set at 1.44 million UAH.
FOP Group 2: Tax Burden and New Thresholds
For Group 2 entrepreneurs, the monthly single tax is 20% of the minimum wage, i.e., 1,729.4 UAH.
USC remains the same for all 1,902.34 UAH per month.
Military levy 864.7 UAH per year.
The maximum allowable annual income for Group 2 is 7.21 million UAH.
FOP Group 3: Rate, Taxes, and Limits
Group 3 FOPs will continue to operate under the same rate of 5% of income (or 3% for VAT payers).
USC 1,902.34 UAH per month.
Military levy 1% of income.
The annual income limit will increase to over 10 million UAH (official sources indicate 10.04 million UAH).
Calculation Mechanisms and Legal Framework
All these indicators are formed in accordance with the current version of the Tax Code and the “rules of the game” that have not changed in recent years. Calculation formulas are public, and the calculations for 2026 correspond to the figures proposed by the government in the draft budget.
Changing the subsistence minimum and minimum wage is the only “entry point” that affects the size of the single tax for Groups 1 and 2.
For Group 3, the rate is fixed and depends only on total income.
At the time of this analysis, the 2026 budget is under consideration in Parliament. Figures may be adjusted during the final vote, but no major changes are expected all calculations are tied to officially approved formulas.
Realities for Entrepreneurs and the Impact on Microbusiness
Introducing new income limits and adjusting rates is a direct result of indexing social standards. For many entrepreneurs, this means an increase in mandatory payments, even if real income does not grow as quickly.
On the one hand, a higher minimum wage is a step towards legalizing employment and greater social security for hired workers.
On the other hand, during a period of economic uncertainty and stagnating consumer demand, even moderate increases in fixed payments for FOPs can become an additional barrier to survival for microbusiness.
This is especially true for small regional entrepreneurs working in services, retail, education, or personal services. For them, an increase in the minimum wage and related contributions is not only an extra financial burden but also a risk factor for leaving the market.
Additional Risks and Possible Changes
The legislative framework for FOPs in 2026 remains stable, but it is worth anticipating:
- Continued stricter control over compliance with limits and proper payment of USC and taxes.
- Potential expansion of electronic services for tax administration.
- No announced radical changes (such as abolishing or massively reforming the single tax), at least until the end of 2026.
In summary, the 2026 budget draft proposes a gradual, planned increase in social standards, which automatically affects the tax burden for FOPs.
No systemic changes in the rules for the single tax are expected the basic approaches, rates, and formulas remain unchanged.
The growth of tax payments for small businesses is an inevitable consequence of state indexation policy. At the same time, this highlights the main risk for entrepreneurs:
the pace of tax burden growth outpaces the real capabilities of small businesses under wartime conditions and weak consumer demand.
The figures set in the draft budget and legislation are justified and predictable within the current macroeconomic realities. However, the main threat to the survival of small entrepreneurship is not the amount of tax, but the overall state of the economy, demand stability, and customer solvency.
That is why stable rules, transparent control, and moderate tax indexation are not just a matter of fiscal discipline but a matter of survival for small business in Ukraine.
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