Case Studies
Tax-Exempt Scholarships in Ukraine: What You Need to Know Before Paying Out
Ukraine sets a monthly non-taxable threshold for enterprise scholarships; excess is taxed and withheld. A must-read for companies funding students and pupils.
By NomadicTax Research Team • 5-8 min read • September 11, 2026
## Context & Thresholds
Under recent guidance from the State Tax Service of Ukraine (effective as of **mid-September 2026**), enterprises or organizations that pay scholarships to pupils, students, cadets, or residents under contracts with educational institutions can benefit from a **non-taxable limit**. The key numbers (2026) are:
- Up to **4,660 UAH/month** is non-taxable for both personal income tax and the military levy. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/1047983.html?utm_source=openai))
- Any amount *above* 4,660 UAH is taxable **only** on the *excess**, at **18% for personal income tax** plus **5% military levy**. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/1047983.html?utm_source=openai))
## Who Qualifies
This applies to scholarships given to:
- Pupils, students, cadets of military institutions
- Residents, postgraduates, and adjuncts at educational institutions
These are payments from enterprises or organizations under contract with an educational entity. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/1047983.html?utm_source=openai))
## What Enterprises Should Do
- **Track monthly scholarship payments** to each beneficiary—ensure amounts don’t exceed the 4,660 UAH threshold unless expected.
- **When exceeding the threshold**, withhold both:
- 18% personal income tax on the excess, and
- 5% military levy on the excess.
The % rates apply to only the *amount over* 4,660 UAH. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/1047983.html?utm_source=openai))
- **Reporting & remittance**: The entity paying acts as the tax agent. They must withhold and remit taxes – ensure accounting systems (“payroll”) can differentiate whether taxable amounts apply. Beneficiaries do *not* need to declare excess separately. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/1047983.html?utm_source=openai))
## Practical Example
Suppose an enterprise awards a student a monthly scholarship of **6,000 UAH**.
- The first 4,660 UAH = non-taxable
- The remaining **1,340 UAH** is subject to tax:
- **18% PIT** → 241.20 UAH
- **5% military levy** → 67.00 UAH
- **Total deductions** → 308.20 UAH, remitted by enterprise.
## Key Takeaways for HR and Finance Teams
- Define your scholarship policy clearly in contracts and identify which scholarships are “enterprise payments under contract with educational institutions.”
- Ensure payroll software can cap tax-free portion and calculate withholding correctly on excess.
- Communicate with recipients so they know what net amount to expect if scholarship exceeds threshold.
- Document eligibility – keeping contracts and identities helps in case of tax authority review.
## Why This Policy Matters
- Encourages enterprises to support education without placing burdens on students.
- Clarifies tax obligations, reducing ambiguity and preventing surprises for both contributing organizations and scholars.
## Conclusion
For companies in Ukraine providing scholarships, staying below the 4,660 UAH ceiling avoids withholding obligations. When exceeding it, proper withholding and reporting are critical. Clear policies, good documentation, and updated payroll systems will help ensure compliance while easing administrative burdens.