2nd and 3rd groups of individual entrepreneurs, what is the difference – income amounts in 2026 and number of employees

Main points

• The second and third groups of individual entrepreneurs differ in the permitted annual income and the number of employees.
• They have the same single tax rate, but pay different amounts of single tax and military levy on a “simplified” basis.

What is the difference between groups II and III of individual entrepreneurs / Collage of Channel 24

It is extremely important for a future entrepreneur to choose the right individual entrepreneur group. The tax burden, available KVEDs, and conditions for conducting business will depend on this.

What is the difference between groups II and III?

You can change the group later, but you won't be able to do it at any time, because there are certain deadlines and rules. About the key differences between groups 2 and 3 of the individual entrepreneur – explains in more detail Traffic police.

• What are the requirements for the second group of individual entrepreneurs?

It can be chosen by entrepreneurs who work in the field of providing services to the population or single tax payers, production and sale of goods, as well as the restaurant industry. Among the conditions:

1. Number of employees – up to 10 people inclusive (or not).
2. Annual income – no more than 834 minimum wages
   (7,211,598 hryvnias in 2026).

Reference: the minimum wage in 2026 is 8,647 hryvnias.

Exceptions: the second group cannot be occupied by individual entrepreneurs engaged in real estate brokerage; providing Internet access; and manufacturing, supplying, and selling jewelry and products made from precious metals or stones.

• What are the requirements for the third group of individual entrepreneurs?

It is the most flexible, as it has no restrictions on the number of employees. The main condition concerns the annual income, which cannot exceed 1,167 minimum wages (10,091,049 hryvnias in 2026).

What taxes do self-employed individuals of groups II and III pay?

The simplified taxation system provides for three main mandatory payments: a single tax (ST), a military levy (MC), and a single social contribution (SSC).

Useful! On the Diya portal, you can take a test that will help you choose a group of individual entrepreneurs to avoid problems with the tax office.

Who cannot be a single tax payer?

We remind you that the simplified taxation system does not apply to individual entrepreneurs who carry out the following types of activities:

1. organization and conduct of gambling, currency exchange;

2. production and trade in excisable goods (except in cases provided for by law);

3. mining of minerals, precious metals and stones;

4. financial intermediation (except for insurance agents and certain specialists defined by law);

5. postal and telecommunications services (except courier services);

6. sale of art and antiques, organization of auctions;

7. conducting touring events;

8. technical testing, research, audit;

9. leasing of land plots (over 0.2 hectares), residential (over 400 square meters) and non-residential premises (over 900 square meters), the Tax Code states.