Accounting for individual entrepreneurs of group 2

Accounting for individual entrepreneurs of group 2 remains not just a formality, but a necessary condition for legitimate entrepreneurial activity. From January 1, 2025, tax legislation has undergone changes, which affected, among other things, the tax burden for individual entrepreneurs on a simplified system and the features of filling out reports. Also, from the beginning of 2025, monthly submission of a combined report on the Unified Social Security Tax, Personal Income Tax and military levy for employees for individual entrepreneurs of group 2 was introduced, which requires more thorough accounting.

What taxes does an individual entrepreneur of group 2 pay from 2025?

The following mandatory tax payments are provided:

1. Single tax (hereinafter – EP) in the amount of 20% of the minimum wage (1600 hryvnias per month);
2. Military duty, which is 10% of the minimum wage (800 hryvnias per month) or 1.5% of the employee’s accrued salary;
3. Single social contribution (hereinafter – ESV) in the amount of 22% of the salary of an officially employed employee (minimum 1760 hryvnias per month);
4. Personal income tax (PIT), which is 18% of the salary of an officially employed employee (minimum 1440 hryvnias per month).

Restrictions for individual entrepreneurs of group 2 in 2025

Firstly, annual income should not exceed 834 minimum wages. Exceeding this limit may lead to a mandatory transfer to another taxation group (including general).

Secondly, an entrepreneur has the right to hire no more than 10 employees (persons who provide services on the basis of civil law contracts are not taken into account). Exceeding the established number may lead to cancellation of registration on the simplified taxation system.

Finally, if the number of employees is 8 or more people, then according to the law, a person with a disability must be employed to meet the state standard for 2025. A separate report (form 10-ПВИ) is also submitted to confirm this.

Exemption from payment of EP and SSC for individual entrepreneurs of group 2

During the period of martial law in Ukraine, certain benefits are provided for individual entrepreneurs regarding the payment of:

• single tax on the basis of a tax holiday. Entrepreneurs who do not have employees are entitled to exemption from payment of EP for one calendar month per year. However, during this month he must not carry out entrepreneurial activity either;
• single tax in connection with sick leave. Entrepreneurs may also be exempted from payment for a period of continuous illness lasting 30 calendar days or more, provided that there are no employees, a certificate of incapacity for work, and no income during the period of illness;
• SSC for themselves for certain categories of citizens (old-age pensioners, persons with disabilities);
• SSC for themselves, if the individual entrepreneur is simultaneously an employee at his main place of work.

Basic accounting rules for individual entrepreneurs of group 2

What reporting should be submitted?

Here are the main forms of reports:

• first, the declaration of the single tax payer;
• second, the report on the amount of accrued income of insured persons;
• third, the combined report on the Unified State Tax, Personal Income Tax and Social Security for employees.

Other reports must also be submitted to the tax office, in particular if the entrepreneur is engaged in the sale of alcohol and tobacco (declaration on the accrual of excise tax), owns land plots (declaration on land payments), etc.

Accounting for income for the entrepreneur should be carried out in any form convenient for them. Accountants “Prikhodko and Partners” recommend keeping accounting records in the form of a paper journal and in an Excel spreadsheet to minimize the risks of accidental destruction of important reports.

Maintaining primary documentation for individual entrepreneurs of group 2

Primary documentation is the foundation for any business entity, as it records financial transactions. It is worth noting that there is no direct obligation to maintain the full volume of primary documentation to confirm income for individual entrepreneurs of group 2, with the exception of those engaged in the sale of jewelry, medical products, household goods subject to warranty repair, alcoholic beverages, tobacco products or fuel. According to the Law of Ukraine “On Accounting and Financial Reporting”, primary documents of such entrepreneurs must be stored for three years from the date of submission of the relevant tax reporting.

An accountant for individual entrepreneurs recommends nevertheless forming primary documents, in particular to confirm the reality of business transactions and avoid unnecessary questions from the tax authorities. It is imperative to keep:

• payment receipts, commodity and fiscal checks;
• invoices;
• certificates of work performed, etc.

Why should you contact an accountant for individual entrepreneurs “Prikhodko and Partners”?

Accountants “Prikhodko & Partners” provide accounting support services for businesses and help optimize accounting and avoid potential problems. Our specialists:

1. have extensive experience working with the simplified taxation system and are fully aware of all the nuances;
2. ensure timely and correct payment of taxes and submission of reports;
3. advise on opportunities to optimize tax expenses within the framework of the legislation;
4. help maintain systematic accounting of all income received in a convenient form;
5. are engaged in the execution of primary documents;
6. carry out a full cycle of preparation of all necessary reports before passing a tax audit.

By choosing accounting for a 2nd group individual entrepreneur by specialists from “Prikhodko and Partners”, you receive qualified support and confidence in the financial component of your business. To find out the price of accounting support, fill out the form below.