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

The author of the article: Philipp Orlov

Modified date: 21 September 2026

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 an insurance record. 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 an insurance record 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 activity defined by Law of Ukraine No. 1667-IX;
• Has at least nine employees and/or gig specialists;
• The average monthly payment to employees and gig specialists is at least the equivalent of EUR 1,200;
• At least 90% of the company's income is qualified income;
• None of the negative criteria under part two of Article 5 of Law No. 1667-IX apply (for example, the company is not registered outside Ukraine, its ultimate beneficial owners are disclosed, and it has no ties to the aggressor state).
• Startup exception. A company registered no earlier than 24 months before the application, with income within the group 3 single tax limit (UAH 10,091,049 in 2026), may be a resident without 9 specialists - until 31 December of the year following the year it obtained the status (part 3, Article 5 of Law No. 1667-IX).

A company obtains Diia.City resident status through the Ministry of Digital Transformation, which reviews and registers the application within 10 business days (part 1, Article 7 of Law No. 1667-IX).

By the way, unlike a sole proprietor, a gig specialist does not have to register with the tax authority. Taxes and contributions are paid on their behalf by the Diia.City resident company acting as tax agent. One caveat: if annual remuneration exceeds EUR 240,000, the specialist files an annual return personally and pays 18% income tax on the excess (clause 170.14-1.3 of the Tax Code).

Additional Documents for the Gig Contract

Imagine you sign a gig contract and then receive another document - an NDA or an NCA. What are they? They are non-disclosure and non-compete agreements. Law No. 1667-IX regulates them as standalone agreements (Articles 26 and 27), although it does not prohibit including separate terms in the gig contract itself. An NDA protects the company from leaks, and an NCA protects it from you taking all the inside knowledge to a competitor. Should you sign? Always ask exactly what you must not disclose and which restrictions apply to you. Do not hesitate to consult a lawyer - a short consultation before signing costs less than months of dealing with the consequences.

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

Many IT companies now sign employment and gig contracts remotely through electronic document workflow. The specialist does not need to come to the office, and the company does not need to mail paper documents. The law requires only written or electronic form (Article 17 of Law No. 1667-IX). For an electronic gig contract to be legally valid, it is signed with a qualified electronic signature under the Law on Electronic Identification and Electronic Trust Services. Any e-document service and any qualified signature issued by a qualified provider will do, including Diia.Signature. After signing, the contract is stored in both parties' accounts.

Taxation of Gig Contracts

The tax burden for a gig specialist:

• personal income tax (PIT) - 5%;
• military levy - 5%;
• Unified Social Contribution (USC) - 22% of the minimum wage.

This is close to a Group 3 sole proprietor (individual entrepreneur), but not identical: for a sole proprietor, the military levy is 1% of income, not 5%, so the total income tax under a gig contract is slightly higher - 10% versus 6%, although the USC is the same.

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):

• before work starts, the resident notifies the tax authority, as the body administering the social contribution, about the gig specialist in the manner set by the Cabinet of Ministers (part 1, Article 23 of Law No. 1667-IX). The Social Insurance Fund was abolished on 01.01.2023, so there is no separate notification to it;
• the social contribution is mandatory;
• the gig specialist's insurance record is counted in the register of insured persons of the State Register of Compulsory State Social Insurance (part 2, Article 23).

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 an insurance record - 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 made in writing and must be paid. The law sets no minimum amount, so companies sometimes offer token payments - that is a risk. The law only requires the agreement to be compensated; the method and schedule of payments are set by the agreement itself, so check them separately. An NCA may last no more than 12 months after the relationship with the resident ends: this is an essential term, and an agreement with a longer period is void (clause 1, part 2, Article 27 of Law No. 1667-IX).

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 set in a foreign currency (part 3, Article 19 of Law No. 1667-IX), but settlements within Ukraine are made in hryvnia. The law does not fix the exchange rate date - the parties set it in the gig contract.

7. Contract Termination Period

A party wishing to end the contract gives notice 30 calendar days in advance, unless the gig contract sets a different period. During the first three months of the contract the notice period is only 3 calendar days (part 5, Article 18). The resident may shorten the notice period by paying compensation of at least the daily remuneration for each business day by which the period is reduced (part 6, Article 18). Daily remuneration is the monthly remuneration divided by 21 (part 4, Article 19).

If the company loses resident status, the gig contract is deemed terminated on the last day of the third calendar month after the month in which the loss of status was recorded (clause 5, part 3 and part 8, Article 18). Worth knowing before signing, especially with a young company.

8. Video Surveillance and Control

Diia.City resident companies may monitor how work is performed, but within the limits of the law (part 3, Article 20 of Law No. 1667-IX). Monitoring is allowed without interfering in the specialist's private and family life. Video surveillance must be open and only in common areas. Monitoring covers only the resident's own equipment and systems, not personal devices or accounts. All of this must be set out in the contract, so do not agree blindly.

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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 a lawyer or accountant, read the terms carefully and do not be afraid to ask awkward questions. If you are choosing between a gig contract and a sole proprietorship, the tax and risk comparison is in our article gig contract vs sole proprietor. Rates, limits and resident reporting are covered in the article on Diia.City taxation. And if you need ongoing support, we provide turnkey accounting for Diia.City residents.