Can an employee enter into a voluntary agreement that includes a one-time payment of the Unified Social Contribution (USC)?

The tax service in the Zhytomyr region explains whether an individual in an employment relationship with an employer has the right to enter into a voluntary participation agreement, which provides for a one-time payment of a unified contribution for previous periods.

The relationships arising during the conduct of activities related to the collection and accounting of the unified contribution for mandatory state social insurance (hereinafter referred to as the unified contribution) are regulated exclusively by the Law of Ukraine dated 08.07.2010 No. 2464-VI "On the Collection and Accounting of the Unified Contribution for Mandatory State Social Insurance" with amendments and supplements (hereinafter referred to as Law No. 2464).

According to paragraph 1 of part 1 of Article 4 of Law No. 2464 the payers of the unified contribution include:

• enterprises, institutions, and organizations, other legal entities established in accordance with the legislation of Ukraine, regardless of ownership form, type of activity, and business operations, that employ individuals under employment contracts (contracts) or under other conditions stipulated by law, or under civil law contracts (except for civil law contracts concluded with individual entrepreneurs, if the work performed (services provided) correspond to the types of activities according to the information from the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Formations), including branches, representative offices, divisions, and other separate subdivisions of the mentioned enterprises, institutions, and organizations, other legal entities that have a separate balance and independently conduct settlements with insured persons;
• individuals who independently provide themselves with work and individuals who use the labor of others under employment contracts (contracts) (except for the use of domestic workers).

An insured person is an individual who, according to the legislation, is subject to mandatory state social insurance and pays (has paid) and/or for whom the unified contribution is paid or has been paid in accordance with the law (paragraph 3 of part 1 of Article 1 of Law No. 2464).

Part 1 of Article 10 of Law No. 2464 defines the circle of payers who have the right to voluntarily pay the unified contribution and the conditions under which such a right is granted.

According to part 1 of Article 10 of Law No. 2464, the right to voluntarily pay the unified contribution is granted to:

• members of personal peasant farms, if they do not belong to individuals who are subject to insurance;
• individuals who have reached the age of 16 and are not in employment relationships with employers defined in paragraph 1 of part 1 of Article 4, and do not belong to the payers of the unified contribution defined in paragraphs 4, 5, and 5-1 of part 1 of Article 4 of Law No. 2464, including foreigners and stateless persons who permanently reside or work in Ukraine, Ukrainian citizens working or permanently residing outside Ukraine, unless otherwise stipulated by international treaties, the binding nature of which is approved by the Verkhovna Rada of Ukraine, – for mandatory state pension insurance;
• domestic workers.

According to Article 173-2 of the Labor Code a domestic worker is an individual who performs domestic work within the framework of employment relations with an employer.

An employer is an individual who is one of the household members and with whom the domestic worker has concluded an employment contract.

At the same time, mandatory state social insurance for domestic workers is carried out on the basis of voluntariness.

Considering part 1 of Article 10 of Law No. 2464 a person in an employment relationship with an employer does not have the right to enter into a contract for the voluntary payment of the unified contribution.

Exceptions are domestic workers who perform domestic work within the framework of employment relations with an employer, as according to paragraph 1 of part 1 of Article 4 of Law No. 2464 the employers of domestic workers are not payers of the unified contribution for such workers, and the mandatory state social insurance for domestic workers is carried out on the basis of voluntariness.