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From July 1, 2025, the right to indexation of workers' wages will be restored.
Who will be affected by the wage indexation from July 1, 2025 and how it will happen – read on ICTV Fakty.
Salary indexation from July 2025: how it is applied and who is eligible
Lawyers from Free Legal Aid noted that from July, enterprises, institutions and organizations, regardless of their form of ownership and management, as well as individuals using hired labor, must conduct indexation.
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The return of indexation is due to the indexation threshold being exceeded; in particular, in June the consumer price index was 104.4%.
In turn, the State Labor Service specialists commented that the right to index wages arises when the accumulated consumer price index exceeds the established threshold of 103%.
Based on the inflation results for February, March, April and May, in June this index reached 104.4%, i.e. exceeded a certain minimum. Consequently, from July 2025, employers are required to resume indexation of employees' salaries. The base month for accruals is January 2025. In this case, salaries must be indexed by a coefficient of 4.4%.
The lawyers of the BPD added that the Law of Ukraine On indexation of monetary incomes of the population (Article 2) defines the monetary incomes of citizens subject to indexation.
In particular, the salary indexation in July applies to permanent cash income of citizens that is received in hryvnia on the territory of Ukraine and is not of a one-time nature.
These include:
- pension payments;
- scholarships;
- wages or salary;
- insurance payments provided for by the legislation on compulsory state social insurance (except for monthly insurance payments to those injured at work and their families, as well as pensions, which are already indexed separately);
- compensation for damage caused to health, or in the event of the loss of a breadwinner (except for payments made under social insurance laws).
However, one-time social payments, such as childbirth benefits, financial assistance, retirement benefits, or maternity benefits, are not subject to indexation.
The increase in their size is carried out separately in order to maintain purchasing power.
How is wage indexation carried out from July in Ukraine 2025
The lawyers of the BPD noted that the calculation of indexation in Ukraine is carried out in accordance with the Procedure for indexation of monetary incomes of the population, approved by the Cabinet of Ministers of Ukraine Resolution No. 1078 of July 17, 2003.
How is indexation of wages or other payments calculated:
- The base month is the month of the last increase in basic income (e.g. salary). The consumer price index (CPI) begins to accumulate from the month following it.
The indexation threshold is 103%. That is, indexation is carried out only when the CPI, calculated cumulatively after the base month, exceeds this threshold.
- Indexation amount = the amount of earnings subject to indexation (depending on the subsistence minimum) × % excess of the CPI.
For example, if the accumulated CPI over several months was 104.4%, then the excess is 1.4%.
This figure is applied to a conditional base (for example, to a fixed indexation value, for partial salaries this may be proportional).
Indexation is carried out monthly, starting from the month following the threshold being exceeded.