Gig Contract: Features of the Contract, Terms, and Pitfalls

The author of the article: Philipp Orlov

Modified date: 04 December 2025

A gig contract is a new form of cooperation available only to Diia.City resident companies. It combines the flexibility of freelancing with basic social guarantees such as paid vacation, sick leave, employment record, and protection in case of incapacity. This article examines the key differences between a gig contract, an individual entrepreneur (FOP) agreement, and an employment contract, as well as tax nuances, signing rules, NDA and NCA specifics, and potential risks that both specialists and companies should consider.

This article will be useful for owners of IT companies, HR managers, accountants, lawyers, as well as IT specialists and freelancers who plan to cooperate with residents of Diia.City or are looking for modern formats to engage and hire specialists. You will learn what a gig contract is, how it differs from classic employment contracts and sole proprietorships (FOP), what rights, social guarantees, and obligations a gig specialist receives, how to correctly draft a contract, which taxes are paid, how to avoid legal risks and “pitfalls,” and what to pay attention to when signing NDA and NCA agreements. This material will help you make informed decisions, protect your interests, and confidently choose the best cooperation format in the modern IT business of Ukraine.

What is a Gig Contract and Why Is It Beneficial

A gig contract is like a hybrid car in the world of employment: a bit of freelancing, a bit of classic “office” work. Imagine that you gain freedom of choice but at the same time do not lose basic guarantees – vacation, sick leave, even work experience. Sounds tempting, right?

According to Article 1, paragraph 1 of the Law of Ukraine “On Stimulating the Development of the Digital Economy in Ukraine,” a gig contract is a civil-law agreement under which a gig specialist undertakes to perform work and/or provide services in accordance with the tasks of a Diia.City resident as the customer, and the Diia.City resident undertakes to pay for the completed work and/or provided services and to ensure the gig specialist with proper conditions for performing the work and/or providing the services, as well as social guarantees stipulated in Section V of this Law…

GIG contract ≠ employment contract

Thus, the gig contract became officially possible thanks to the Diia.City law. According to the legislation, a gig contract is a civil-law agreement under which a gig specialist performs work or provides services to a Diia.City resident, and the customer is obliged not only to pay for them but also to ensure proper conditions and social guarantees.

Gig specialists are not hired as staff, but they still receive important social guarantees: the right to vacation, sick leave, weekends, and other benefits. The contract also specifies the regime of task execution and rest, the possibility of flexible or irregular working hours, the duration of breaks during the day and weekly rest, the procedure for payment for days when the specialist is not working, as well as provisions for annual paid leave (similar to vacation) and conditions for temporary disability payments. Additionally, the gig contract provides for mandatory state social insurance, which offers the specialist additional protection and confidence in the future.

Before the appearance of gig contracts, companies mostly cooperated with IT specialists under the status of sole proprietors (FOP). Remember the times when “FOP” was almost synonymous with the word “IT specialist”? It was convenient, fast, but… without social protection. Plus, there was the constant risk that the tax authorities might one day come to the company with the question: “Are these labor relations, by any chance?”

The main difference between a gig contract and a regular contract with an FOP is that it provides basic social protection. It is a kind of “golden mean” between the flexibility of freelancing and the stability of traditional employment. A gig specialist gains freedom in choosing the way and place of work but can also count on minimal social rights. Moreover, under the gig contract, the specialist accrues work experience just like a regular employee.

For companies, a gig contract is a legal way to engage highly qualified specialists, minimize tax risks, and build transparent relationships with the team.

Contract Form

Forget about “handshake agreements” – with gig contracts, this no longer works. The gig contract must be either written or electronic.

One more important point: a contract will not be considered a gig contract if it does not explicitly state that it is a “gig contract.” Without this magic phrase, there are no guarantees, even if everything else is perfectly specified. This is a legal requirement that cannot be ignored if you want the contract to have the status of a gig contract and provide the necessary guarantees.

Parties to the Gig Contract

A gig contract with a specialist can only be concluded by a Diia.City resident – a legal entity that meets several mandatory requirements:

• Engages in types of activities defined by Law of Ukraine No. 1667-IX;
• Has at least nine employees and/or gig specialists;
• The average monthly salary of employees and gig specialists is at least 1,200 euros;
• At least 90% of the company’s income consists of qualified income;
• No negative criteria as stipulated in paragraph 2 of Article 5 of Law No. 1667-IX (for example, the company is not registered outside Ukraine, beneficial owners are disclosed, no ties with aggressor countries, etc.).

The status of a Diia.City resident company is granted through the Ministry of Digital Transformation, which reviews and registers the application within 10 days.

By the way, unlike sole proprietors (FOP), a gig specialist is not required to register with the tax authorities or file income reports independently. All taxes and contributions are paid by the Diia.City resident company, which acts as their tax agent. So there is no need to visit the tax office or file reports – the company pays all the taxes for you. Convenient!

Additional Documents for the Gig Contract

Imagine you sign a gig contract and suddenly receive another document – an NDA or NCA. What are these exactly? These are separate agreements on non-disclosure and non-compete, which are not directly included in the gig contract because they regulate different matters (according to Law No. 1667-IX). The NDA protects the company from leaking secrets, while the NCA prevents you from going to competitors with all the insider information.

Should you sign them? Always ask exactly what you are obligated not to disclose and what restrictions are imposed on you. Don’t hesitate to consult a lawyer – it’s better to spend 30 minutes and 2000–4000 UAH on consultation than to deal with the consequences for months afterward.

Is it possible and how to sign a gig contract online?

For the electronic gig contract to have legal force, it must be signed with a qualified electronic signature (QES). For example, in the service Vchasno.EDO you can use Diia.Signature, Vchasno.QES or any digital signature issued by the Ministry of Digital Transformation of Ukraine.

The most convenient option is Vchasno.QES – it is integrated into the ecosystem of Vchasno services, which minimizes technical issues during signing. You can sign documents in Vchasno.EDO from any computer or smartphone, regardless of your location.

Moreover, after signing, the gig contract is automatically stored in the personal cabinets of both parties and can be quickly retrieved from the document archive if needed.

Taxation of Gig Contracts

The tax rates for gig specialists and sole proprietors (FOP) are practically the same:

• ersonal income tax (PIT) – 5%,
• Military tax – 5%,
• Single social contribution (SSC) – 22% of the minimum wage.

However, there is an important difference: the gig specialist does not file financial reports, calculate, or pay taxes independently. All these responsibilities are taken on by the Diia.City resident company, which acts as the tax agent. Quite convenient.

Regarding the SSC (Single Social Contribution):

• The company must notify the tax service (DPS) and social insurance fund about the start of the gig specialist’s work under the contract;
• SSC is mandatory to be paid;
• The gig specialist’s work experience is officially recorded in the State Register of Compulsory State Social Insurance.

Social Guarantees

A gig contract is not just “freedom and flexibility.” It is also a social “parachute” that sole proprietors (FOPs) lacked. Vacation, sick leave, insurance, even work experience – now all this is realistically available without having to sit in an office from 9 to 18.

1. Working hours

As a general rule, the gig specialist’s working time should not exceed 8 hours a day and 40 hours a week. However, the gig contract may provide different conditions in such cases as:

• when it is impossible to clearly define the exact time for completing tasks or providing services;
• if the specialist has the right to independently plan their working hours;
• when the work requires increased initiative, which implies periodic overtime without additional instructions from the client.

2. Breaks and days off

The gig contract must obligatorily include conditions regarding breaks during the working day, weekly rest periods, and possible “time off.” The payment procedure for such days is also determined separately in the contract.

3. Annual paid leave

A gig specialist has the right to paid leave – no less than 17 working days per year, unless otherwise stated in the contract. Usually, such leave can be taken after 6 months of cooperation, but it depends on the contract terms. It can even be divided into several parts. Moreover, the costs for such “leave” are covered by the Diia.City resident, as specified in your gig contract.

4. Social insurance and assistance

• Temporary Disability

Gig workers are subject to mandatory state social insurance. They are entitled to temporary disability benefits, which are provided according to the conditions and amounts established by the Law of Ukraine “On Compulsory State Social Insurance”

• Maternity and childbirth benefits

Standard: 70 calendar days before childbirth and 56 days after (in case of multiple pregnancy – 70 days after childbirth).

For gig workers classified in categories 1–3 who suffered from the Chernobyl disaster: 90 days before childbirth and 90 days after.

If a gig worker adopts a child within two months after birth, the benefit is provided for the period from the date of adoption until the end of 56 days (or 70 days in case of simultaneous adoption of two or more children, 90 days for Chernobyl victims).

Maternity and childbirth benefits are paid according to the legislation.

5. Prohibition of contract termination in special cases

A Diia.City resident company does not have the right to terminate a gig contract on the initiative of the company during pregnancy or if the sick leave lasts less than one month continuously.

6. Additional benefits and payments

The Diia.City resident company, at its discretion or according to the contract terms, may provide the gig worker with additional material or non-material bonuses, services, or other benefits.

Intellectual Property

As a general rule, personal non-property rights of intellectual property belong to the specialist themselves.
However, property rights to the results of intellectual activity under the gig contract transfer to the Diia.City resident (the client), unless otherwise stipulated by the terms of the agreement.

Pitfalls of the Gig Contract and Frequently Asked Questions

1. Specification of Functions

When concluding a gig contract, it is mandatory to clearly specify what exactly you do and your role in the project. This task must align with the types of activities that the Diia.City resident specified during registration. This way, you avoid confusion and unnecessary questions from the tax authorities.

2. Non-Disclosure Agreements (NDA) and Non-Compete Agreements (NCA)

2.1 NDA (Non-Disclosure Agreement)

Many specialists fear confidentiality agreements (NDAs), but in reality, this is already a common practice – even since the times of cooperation with sole proprietors (FOPs). The law explicitly allows entering into such contracts, so there is nothing scary here. The main thing is to clearly specify what information is considered confidential (for example, client base, projects, finances) and how it is transferred. Blanket phrases like “everything under this agreement” do not work here.

NDAs usually also provide for compensation for data disclosure, but it is important to remember: the amount must be adequate because the court may reduce it if the information is not that important. As for compensating for lost profits – this task is nearly impossible: proving and assessing damages is extremely difficult, even with the help of experts.

2.2 NCA (Non-Compete Agreement)

A non-compete agreement (NCA) is always concluded in writing and is mandatory to be paid. The law does not establish a minimum compensation amount, so sometimes companies may offer symbolic payments – this is a risk worth remembering. The specialist receives payments throughout the entire period during which the restrictions apply.

It is important to know: refusing to sign an NCA is not a valid reason to terminate a gig contract. However, in practice, employers often insist on its signing, so be prepared to discuss the terms.

Non-compete activity may include:

• cooperation with other companies in a similar field;
• conducting similar activities as a sole proprietor (FOP);
• owning shares in competing companies;
• managing other competing companies;
• other cases specified in the contract.

3. Penalties

Generally, gig contracts do not directly provide for penalties for defects in work or other violations. However, material liability for damage to the client’s property is possible if it was caused by the fault of the gig specialist. In this case, the amount of deductions cannot exceed 20% of the monthly remuneration.

4. Possibility of Combining

Flexibility is one of the advantages of a gig contract. There is no prohibition on simultaneously having the status of a sole proprietor (FOP) and working as a gig specialist. On the contrary, this opens up more opportunities: you can combine a gig contract with your own entrepreneurial activity, receive additional income, and independently choose cooperation formats.

5. Remuneration

The payment for the work of a gig specialist is called “remuneration,” not salary. By the way, it is recommended to pay attention to this and correctly specify it in the contract.

6. Accounting

Remuneration can be specified in foreign currency, but must be paid only in hryvnias at the exchange rate on the day of payment. All calculations are made exclusively in hryvnias.

7. Contract Termination Period

The party wishing to terminate the contract must notify about this 30 calendar days in advance. The Diia.City resident may shorten this period by paying compensation. The amount of compensation cannot be less than the daily remuneration of the gig specialist for each shortened day.

8. Video Surveillance and Control

It is no secret that Diia.City resident companies have gained more rights to control gig specialists. Video cameras in corridors, monitoring of work computers, checking corporate accounts – all this is now legal. However, all these nuances must be clearly stipulated in the contract. Do not agree “on the fly” – demand transparency to avoid misunderstandings and conflicts.

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Conclusion

A gig contract is a so-called “insurance policy for freelancers.” It is a modern and flexible cooperation tool that allows companies to engage highly qualified specialists without the obligation to hire them, and for specialists – to gain more freedom while retaining basic social guarantees. The main advantage of the gig contract for freelancers who previously worked as sole proprietors (FOP) is the presence of social guarantees. This includes paid “vacation,” protection in case of illness, support during pregnancy and childbirth, and other rights provided by law.

Despite all the advantages, gig contracts also hide certain risks: strict restrictions on non-competition, stringent confidentiality requirements, increased work supervision, as well as specific rules regarding remuneration and taxation. To avoid unpleasant surprises and conflicts, it is important to carefully outline all contract terms, properly draft NDA and NCA agreements, and clearly understand the specifics of income accounting and tax payments.

Always consult with a lawyer or accountant, carefully read the terms, and do not hesitate to ask uncomfortable questions. In the IT world, the winner is not the one who signs the contract faster but the one who better understands what they are signing.