Why do Ukrainians receive less than the State Statistics Service shows

According to the latest data of the State Statistics Service of Ukraine, the average salary for the second quarter of 2024 increased by 22.1% to 20,964 hryvnias. At the same time, the dynamics of growth was similar in the first quarter, where the increase was 22.5%. However, the growth of nominal salaries does not always reflect the real financial capabilities of Ukrainians.

According to Oleksandr Chumak, the president of the Association of Private Employers, the increase in wages was influenced by several factors, which are far from always positive for the country's economy. "This is a decrease in the exchange rate of the national currency, competition for qualified workers on the labor market, active development of the defense-industrial complex, which stimulates the development of related industries, as well as additional payments to the military, introduced in the second quarter of this year," comments the expert.

Why is the real salary lower?

Economic expert Oleg Hetman notes that the real average salary is significantly lower than the official figures. The fact is that the State Statistics Service provides data after payment of the single social contribution (USS), but without deducting personal income tax (PIT) and military duty. That is, from the official 20,964 hryvnias, it is necessary to subtract 18% personal income tax and 1.5% military duty, which significantly reduces the net income of citizens. After these deductions, the real average salary drops to 16,876 hryvnias.

In addition, the military levy is expected to increase from 1.5% to 5% in the near future, which will make it even more difficult to maintain the dynamics of salary growth. This will also affect the general financial capabilities of Ukrainians, because the increase in the military levy will be implemented in connection with the military needs of the country.

Is there a possibility of salary increases in the future?

The draft state budget for 2025 does not yet provide for an increase in the minimum wage and social benefits. The minimum salary is planned at the level of 8 thousand hryvnias from January 1, 2025. This raises doubts about the possibility of a significant increase in the income of the population in the coming years.

Despite the nominal growth, the real purchasing power of Ukrainians is decreasing due to inflation, taxes and military levies. The loss of 3.5 million jobs since the start of full-scale war is also adding to the pressure on the economy. In order to maintain a stable economy and help the military, it is necessary to create at least 10 million jobs, according to Prime Minister Denys Shmyhal.

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