Unified Social Contribution (USC) for Sole Proprietors in 2026

Group 3 sole proprietorship is the most flexible form of business under Ukraine’s simplified tax system. It is suitable for entrepreneurs who work with legal entities and international clients, hire a team, and want to grow without strict restrictions.

This article explains the specifics of operating as a Group 3 sole proprietor in 2026, including income thresholds, taxes, and reporting requirements.

Key Facts About Group 3 Sole Proprietors in 2026

The annual income threshold for a Group 3 sole proprietor in 2026 is UAH 10,091,049. It is calculated as 1,167 minimum monthly wages as of January 1, 2026 (UAH 8,647).

There are three tax payments: the single tax (5% of income, or 3% for VAT payers), the military levy (1% of income), and the unified social contribution (USC) for the proprietor (at least UAH 1,902.34 per month). Reporting is quarterly, on a cumulative basis. The summary table, deadlines, and a calculation example are provided below. All figures are current as of October 2026.

Who Can Register as a Group 3 Sole Proprietor?

Any sole proprietor whose income remains within the annual threshold and whose business activities are not prohibited may choose Group 3. It is the most flexible of the single-tax groups.

Group 3 sole proprietors must meet the following requirements:

• Clients. They can work with individuals, sole proprietors, legal entities, and foreign companies. By comparison, Group 2 sole proprietors can provide services only to the public and single-tax payers.
• Employees. There is no limit on the number of employees. Group 2 sole proprietors may employ up to 10 people.
• Business activities. All activities are permitted except those prohibited under Article 291.5 of the Tax Code. These include gambling and lotteries, currency exchange, mineral extraction, and the production and sale of excisable goods, subject to certain exceptions. Check your registered business activity codes (KVEDs) against the list before switching to Group 3.
• Best suited for. IT specialists and consultants, B2B service providers, trading and manufacturing businesses, sole proprietors with foreign clients, and those who hire employees. If your income is low and your clients are exclusively individuals and single-tax-paying sole proprietors, Group 2, with its fixed payments, may be more cost-effective.

The Group 3 Sole Proprietor Income Threshold in 2026

The income threshold for a Group 3 sole proprietor in 2026 is UAH 10,091,049 per calendar year. This does not mean you are prohibited from earning more; it is the limit beyond which you must change your tax system.

Here, 1,167 is the number of minimum monthly wages, and UAH 8,647 is the minimum monthly wage established as of January 1, 2026.

Income includes:

• Funds received in the sole proprietor’s bank account or cash register from business activities;
• Foreign-currency receipts, converted into hryvnias at the National Bank of Ukraine (NBU) exchange rate on the date of receipt;
• For VAT payers, the amount excluding VAT.

Transfers of your own funds between your accounts and loans are not considered income.

Income is calculated cumulatively from January 1, and changing tax groups does not reset the total. If you switch from Group 2 to Group 3 during the year, income previously earned under the single-tax system is also included. You can check your remaining threshold using the income threshold checker. The section below explains what happens if you exceed the limit.

What Taxes Does a Group 3 Sole Proprietor Pay?

In 2026, Group 3 sole proprietors make three tax payments: the single tax, the military levy, and the USC for themselves.

Single tax. The rate depends on VAT status: sole proprietors who are not VAT payers pay 5%, while VAT payers pay 3%. The tax is calculated on income actually received: if no income is received, no single tax is due. Choosing between the 3% and 5% rates depends on your clients. If they are VAT payers and require VAT invoices, the 3% rate may be more advantageous. Otherwise, the 5% rate is simpler. You can switch to the 3% rate when opting into the simplified tax system, changing tax groups, or voluntarily registering as a VAT payer at the same time.

Military levy. For Group 3 sole proprietors, the military levy is 1% of the same income used to calculate the single tax. Since July 1, 2026, payments must be made to new bank accounts, so check the payment details before transferring funds. Vchasno Zvit provides up-to-date details. For more information, see the article about the military levy.

USC. In 2026, Group 3 sole proprietors must pay the USC for themselves regardless of income, including in months when they receive no payments. You choose the contribution base yourself:

• Minimum: UAH 8,647, resulting in a monthly contribution of UAH 1,902.34.
• Maximum: UAH 172,940, resulting in a monthly contribution of UAH 38,046.80.

You can pay monthly or quarterly. Certain categories are exempt from USC, including retirement-age pensioners, people with disabilities, and mobilized sole proprietors during their military service. For details, see the article about the USC.

🔢 How Much Tax Will a Group 3 Sole Proprietor Pay? A Practical Example

Consider a sole proprietor who is not registered for VAT, received UAH 600,000 in the first quarter, and pays the minimum USC.

In subsequent quarters, the tax return is calculated on a cumulative basis, and the amount payable is the difference between the total due and the amounts already paid.

For a VAT payer using the 3% rate, the single tax would be UAH 18,000. The military levy and USC would remain the same, bringing the total to UAH 29,707.02. VAT itself is paid separately under its own rules, so these amounts should not be compared directly. You can calculate your own tax liability using the tax calculator.

Tax Payment Deadlines in 2026

If the filing deadline falls on a weekend, it moves to the next business day. However, the 10-day period for paying the tax is calculated from the original deadline. This was the case for the first half of 2026: the return was due by August 10, while the taxes were due by August 19.

Use the Vchasno Zvit tax calendar to avoid missing important dates. The calendar adapts to your tax group and rate and reminds you of upcoming payments.

What Reporting Must a Group 3 Sole Proprietor Submit?

The main reporting document for a Group 3 sole proprietor is the single-tax return for an individual entrepreneur (Form F0103309).

• Reporting period. Quarterly. Returns are filed for Q1, the first half of the year, the first nine months, and the full year.
• Cumulative basis. Each return reports income from January 1 through the end of the reporting period, not just income earned in the most recent quarter. The first-half return, for example, covers Q1 and Q2 combined.
• Deadlines. Within 40 calendar days after the end of the quarter: May 11, August 10, and November 9, 2026, and February 9, 2027.
• USC attachment. Attachment 1, covering the USC, is submitted with the annual return. It is not required with quarterly returns, except when closing the sole proprietorship or switching to the general tax system.
• No income. If you have earned no income since the beginning of the year, you may skip the returns for Q1, the first half of the year, and the first nine months. However, if you submit a nil return for one reporting period, you must also submit returns for the subsequent periods of that year. An annual return with the USC attachment is required in any case if you have paid the USC for yourself.

How to File a Tax Return

You can file your tax return electronically. In Vchasno Zvit, the return is generated using income data, checked, signed with a qualified electronic signature (QES), and submitted to the State Tax Service. Detailed instructions are available on the Group 3 Sole Proprietor Tax Return page.

What Happens If You Exceed the Income Threshold?

If a Group 3 sole proprietor’s income exceeds UAH 10,091,049, they can no longer remain on the simplified tax system.

Here is what changes:

• Higher tax rate. The amount exceeding the threshold is subject to a 15% single-tax rate. The military levy remains at 1%; there is no separate rate for the excess amount. The 15% tax must be paid within the same deadlines as the main tax for that period.
• Switching to the general tax system. You must leave the single-tax system from the first day of the quarter following the quarter in which the threshold was exceeded.
• Application deadline. You must submit an application to switch by the 20th day of the month following the quarter in which the threshold was exceeded. For example, if you exceed the threshold in Q3, the application is due by October 20, and the switch takes effect on October 1.
• Returning to the simplified tax system. You may return no earlier than January 1 of the year following the year in which you switched, provided you once again meet the requirements for your group.

To avoid this situation, monitor your income throughout the year and check the threshold before you reach it.

Employees and Cash Registers (RRO/PRRO)

Employees

Group 3 sole proprietors can hire any number of employees. Before an employee starts work, the sole proprietor must notify the State Tax Service. From employee payments, the proprietor withholds 18% personal income tax and a 5% military levy, and accrues 22% USC. Salaries cannot be lower than the minimum monthly wage of UAH 8,647.
In addition to the single-tax return, sole proprietors who employ staff must submit a tax calculation covering their employees. From 2026, this is filed quarterly, within the same 40-day period after the end of each quarter. Your own USC obligation does not disappear: contributions for employees and for yourself are calculated separately.

RRO and PRRO

If you accept cash or card payments for retail, catering, or services, you need a cash register (RRO) or a software cash register (PRRO) and must issue a fiscal receipt. Bank transfers to your account using your bank details (IBAN) do not need to be processed through an RRO. However, payments made to a sole proprietor’s card must be processed through an RRO. Certain exceptions are set out in the Law of Ukraine on the Use of Cash Registers in Trade, Catering, and Services.

Instead of a physical cash register, you can use a software-based cash register—a smartphone or computer application such as Vchasno Kasa.