Salary can be received on another person's card: under what conditions it is legal

Paying salary to a bank card of another person does not contradict the law, but such a procedure must be properly documented. The State Tax Service explained in which cases an employer can transfer salary not to the employee themselves, but to a trusted person, what documents are needed for this, and whether there is an obligation to pay personal income tax and military levy again.

When salary can be received on another person’s card

Ukrainian legislation does not prohibit paying salary to the details of another person. This option may be relevant if the employee works remotely, temporarily cannot receive funds personally, or has not yet opened their own bank account.

At the same time, such payment must be made in accordance with the requirements of civil law.

How to properly arrange salary payment to another person

Tax authorities emphasize that the legal basis for such payment is a power of attorney agreement.

According to part one of article 1000 of the Civil Code of Ukraine, under a power of attorney agreement, one party undertakes to perform legal actions on behalf of and at the expense of the other party.

At the same time, according to part one of article 1003 of the Civil Code of Ukraine, the actions of the attorney must be lawful, specific, and feasible, and article 1006 of the Civil Code obliges them to immediately transfer to the principal everything received in connection with the execution of the power of attorney.

Therefore, the person who actually receives the salary acts as the attorney and does not acquire ownership rights to these funds. They only receive them on behalf of the employee and are obliged to transfer the money to the principal.

The power of attorney to receive salary can be certified by an official of the enterprise where the principal works or at their place of residence.

How a power of attorney differs from an employee’s statement

The tax service separately noted the difference between a power of attorney and a simple employee statement.

With a properly executed power of attorney, the employer has legal grounds to pay salary to another person.

In contrast, only an employee’s statement without a power of attorney does not properly regulate such a procedure and requires additional legal regulation.

Is it necessary to pay personal income tax and military levy again

Double taxation in case of salary payment to a trusted person does not apply.

The salary remains the income exclusively of the employee with whom the employment contract is concluded. The trusted person does not receive their own income under the Tax Code of Ukraine, since they act within the power of attorney agreement and are obliged to transfer the received funds to the employee.

Thus, transferring salary to another person’s card by itself does not create an obligation for the trusted person to pay taxes. Provided the documents are properly arranged, personal income tax and military levy are not charged again, since the received funds remain the income of the employee, not the person who temporarily received them under the power of attorney.

Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, page on Facebook and on Instagram to stay informed about the most important events.