Taxes for sole proprietors in 2026: new amounts and strict control

The tax landscape for sole proprietors (FOPs) in 2026 will undergo significant changes and increased burdens due to a rise in minimum wage, new social security (USC) amounts, and higher main tax rates. The 2026 state budget bill sets the minimum wage at UAH 8,647 and the subsistence minimum at UAH 3,328. This automatically raises all key tax obligations for entrepreneurs and changes business planning approaches.

Income limits for simplified taxation groups:
Group 1 – UAH 1,444,049
Group 2 – UAH 7,211,598
Group 3 – UAH 10,091,049
These limits determine the upper turnover threshold for single tax regime use and are calculated based on the minimum wage, allowing for inflation and economic dynamics.

Key taxes for FOPs:
Single tax:
Group 1 — UAH 332.8/month (10% of subsistence minimum)
Group 2 — UAH 1,729.4/month (20% of minimum wage)
Group 3 — 3% or 5% of income (depending on VAT payer status)

Military levy:
Groups 1–2 — UAH 864.7/month (10% of minimum wage)
Group 3 — 1% of income

Unified social contribution (USC):
All groups — minimum UAH 1,902.34/month (22% of minimum wage)

In total, the annual tax burden for a Group 1 FOP will be UAH 37,198.08, for Group 2 — UAH 54,032.88; for Group 3 it depends on turnover, but not less than UAH 22,828.08 in USC.

Administration, audits, and trends:
2026 will see expanded digitalization of tax reporting, more automatic checks, and closer monitoring of income limits. If a FOP exceeds limits or violates rules, they will be automatically moved to the general taxation system. Financial monitoring will play a greater role, with tax authorities scrutinizing banking transactions to fight shadow business.

Social effect and recommendations:
Increased tax and social burdens may harm small entrepreneurs, especially those with low incomes — minimum contributions must be paid even with no turnover. At the same time, local budgets receive extra resources for social programs, and the state gets a steady source of revenue during wartime.

Continuous monitoring of rates, timely accounting, and consultations with tax advisors are key strategies to minimize risk.

Conclusions:
2026 will mark a year of active fiscalization for entrepreneurship: FOPs must keep disciplined records, follow new rules, and factor higher tax obligations into financial planning. USC, military levy, and single tax are more substantial in an entrepreneur’s monthly and annual budget than ever before.

Author — Yulia Popadyn, attorney of the tax and customs law practice at WINNER Law Firm.