According to the latest data from the State Statistics Service of Ukraine, the average salary in the second quarter of 2024 increased by 22.1%, amounting to 20,964 hryvnias. At the same time, the growth dynamics were 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, president of the Association of Private Employers, the growth in salaries was influenced by several factors that are not always positive for the country's economy. "This is the depreciation of the national currency, competition for qualified workers in the labor market, the 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," the expert comments.
Why is the real wage lower?
Economic expert Oleg Getman notes that the real average salary is significantly lower than the official figures. The fact is that the State Statistics Service indicates the data after paying the unified social contribution (USC), but without deducting the personal income tax (PIT) and military levy. That is, from the official 20,964 hryvnias, it is necessary to subtract 18% of the PIT and 1.5% of the military levy, which significantly reduces the net income of citizens. After these deductions, the real average salary decreases to 16,876 hryvnias.
In addition, the military levy is expected to increase from 1.5% to 5% in the near future, which will further complicate maintaining the dynamics of salary growth. This will also affect the overall financial capabilities of Ukrainians, as the increase in the military levy will be implemented in connection with the country's military needs.
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 wage is planned to be 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 declining due to inflation, taxes and military levies. The loss of 3.5 million jobs since the start of the full-scale war is also adding to the pressure on the economy. To maintain a stable economy and help the military, at least 10 million jobs need to be created, according to Prime Minister Denys Shmyhal.
