Individual entrepreneurs and taxes in 2026: key figures that every entrepreneur should know
17 September 2025 19:28
Starting from the beginning of 2026, updated tax rates, unified social tax and military duty will come into force for individual entrepreneurs in Ukraine. The changes are related to the adopted state budget for 2026, which provides for the indexation of social standards, including the minimum wage and the subsistence minimum, "Komersant Ukrainian" reports, citing the text of the budget.
For entrepreneurs, this means not only higher costs for mandatory payments, but also wider income limits that allow them to legally conduct business without switching to other taxation systems.
Group I sole proprietorships: minimum rates but limited opportunities
All mandatory payments will increase in 2026 for entrepreneurs of the first group, who usually work without employees and provide household services to the public. The monthly single tax will amount to UAH 332.80, which corresponds to 10% of the new subsistence level. The unified social contribution (USC) will increase to UAH 1902.34, as it is calculated on 22% of the minimum wage. The military fee will be added separately – UAH 864.70 per month.
Despite the increase, the annual income limit of UAH 1.44 million will remain in effect, which allows small entrepreneurs to work without moving to higher groups. However, experts emphasize that the increase in rates may be a challenge for those operating in the small trade or consumer services segment in small towns where the purchasing power of the population has not yet recovered from the crisis.
Group II sole proprietors: increased tax burden for small businesses
The second group is the most popular among entrepreneurs who provide services to the public and work with other sole proprietors. In 2026, their single tax expenses will increase to UAH 1729.40 per month. The unified social contribution will remain at UAH 1902.34, and the military fee will be UAH 864.70. Thus, the total tax burden for an entrepreneur, excluding other expenses, will exceed UAH 4.4 thousand per month.
At the same time, the government is expanding business opportunities: the income limit for the second group has been increased to UAH 7.21 million per year, which allows more entrepreneurs to remain on the simplified taxation system even as their turnover grows. According to tax consultants, this is important for those engaged in small-scale production, trade, or food services.
Group III sole proprietorships: focus on interest rates
Entrepreneurs of the third group will remain on the percentage taxation system. In 2026, the single tax rate will remain unchanged: 5% for non-VAT payers and 3% for VAT payers. The military tax will be 1% of income, and the unified social contribution will be UAH 1902.34 per month.
The most important change will be an increase in the annual income limit to UAH 10.09 million. This allows entrepreneurs to maintain the simplified taxation system even if their business grows significantly. Economists believe that this will encourage businesses to come out of the shadows, as it will be more profitable for entrepreneurs to declare their full turnover than to risk exceeding the limit.
How the changes will affect business
Experts emphasize that the increase in the unified social contribution and single tax is a predictable step, as the government links these payments to the indexation of social standards. At the same time, the increase in rates may put additional pressure on microbusinesses that operate in conditions of low purchasing power and rising utility and rental costs.
At the same time, the expansion of income limits allows businesses to grow without fear of losing their single tax payer status. This is especially important for entrepreneurs who have started to scale up their operations, enter the online market, or expand their production capacity during the war.
Looking ahead: will the simplified taxation system remain in place?
The government has not yet announced any radical changes to the taxation system for individual entrepreneurs in 2026. Moreover, according to members of the Parliamentary Committee on Finance, the simplified system is seen as a tool to support self-employment in the context of economic recovery. However, discussions about its future continue: the tax service insists on gradually reducing optimization opportunities for large businesses that use the simplified system through the networks of individual entrepreneurs.
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Analysts believe that 2026 will be a test for the government and entrepreneurs: if the increased rates do not lead to massive business closures and budget revenues grow, the model may remain unchanged for several more years. However, in the event of an economic downturn, the government may return to the issue of revising rates or introducing additional benefits for small businesses.
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