According to Article 1 of the Law of Ukraine “On Remuneration,” a salary is compensation, typically calculated in monetary terms, that an employer pays to an employee for work performed under an employment contract. The legislation clearly states that salaries in Ukraine must be paid exclusively in the national currency—the hryvnia (UAH) (Part 1, Article 23 of this Law). The hryvnia is the sole legal tender in the territory of Ukraine.

At the same time, Article 192 of the Civil Code of Ukraine allows for monetary obligations to be defined in the equivalent of a foreign currency. This means that an employment contract can specify the salary amount in hryvnias while also indicating its equivalent in a foreign currency. However, the actual payment must be made exclusively in hryvnias.

To avoid disputes, it is advisable to clearly define the mechanism for converting the foreign currency into hryvnias. Specifically, the contract can specify the National Bank of Ukraine (NBU) exchange rate as of a certain date and fix it as a minimum. If the official exchange rate increases by a certain date of the reporting month, the calculation is made at the new, higher rate, but not below the established minimum level. This ensures payment stability and protects the employee from currency fluctuations.

It is also important to regulate the salary calculation procedure in the company’s internal documents: the collective agreement, the salary policy, and the staffing table. The staffing table should specify the position’s salary in hryvnias with a note indicating the foreign currency equivalent and the exchange rate to be used for the conversion.

Formalizing such terms requires amending the employment contract (including through a supplementary agreement), issuing a corresponding order on the change in remuneration, and verifying that the new terms comply with the company’s salary policy.

Key points to consider:

• Salary payments are made exclusively in hryvnias (UAH).
• The option to specify an equivalent in a foreign currency must be clearly regulated by the contract.
• It is recommended to establish a minimum exchange rate to protect the employee.
• All of the company’s internal regulations must be updated accordingly.

Thus, defining a salary in the equivalent of a foreign currency is a legal practice, provided that all legislative requirements are met and the process is properly documented.