Employer Tax Contributions

Tax Type	Rate	Base
Unified Social Contributions (USC)	30% (up to threshold) / 15.1% (above threshold)	Employee gross remuneration
Accident & Occupational Disease Insurance	0.2% - 8.5%	Employee gross remuneration
Personal Income Tax (PIT)	Residents: 13% (up to 5M RUB), 15% (over 5M RUB). Non-residents: 30%	Employee's income
Corporate Profit Tax	25% (general rate)	Company profit

Filing & Compliance

• PIT Payments: By the 28th of the current month for income paid between the 1st and 22nd; by the 5th of the next month for income paid between the 23rd and month-end.
• USC Payments: By the 28th day of the month following the month for which contributions are calculated.
• Reporting:
  • EFS-1 (Unified Information on the Russian Social Fund): Deadlines vary (e.g., employment events often by the next business day, service periods annually).
  • 6-NDFL (Personal Income Tax Calculation): Quarterly reports by the 25th day of the month following the quarter; annual report by the 25th day of February of the following year.
  • Corporate Profit Tax Return: Annual return by March 25th; quarterly returns by the 25th of the month following the reporting period.

In 2025, Russia implemented significant changes to its tax system, impacting both employers and employees.

Personal Income Tax

As of January 1, 2025, Russia introduced a progressive personal income tax system. This replaces the previous flat tax rate and now consists of five brackets:

• 13%: Up to RUB 2.4 million annual income (up to RUB 200,000 monthly).
• 15%: Between RUB 2.4 million and RUB 5 million annual income (between RUB 200,000 and RUB 416,700 monthly).
• 18%: Between RUB 5 million and RUB 20 million annual income (between RUB 416,700 and RUB 1.67 million monthly).
• 20%: Between RUB 20 million and RUB 50 million annual income (between RUB 1.67 million and RUB 4.17 million monthly).
• 22%: Over RUB 50 million annual income (over RUB 4.17 million monthly).

These rates apply to the portion of income within each bracket, not the entire income. For example, if an individual earns RUB 6 million annually, the first RUB 2.4 million will be taxed at 13%, the next RUB 2.6 million at 15%, and the remaining RUB 1 million at 18%.

Social Security Contributions

Employers in Russia are responsible for contributing to several social security funds on behalf of their employees:

• Pension Fund: 22% of an employee's salary up to RUB 1,465,000 annually, and 10% for any amount exceeding this threshold.
• Social Insurance Fund: 2.9% of an employee's salary up to RUB 966,000 annually.
• Medical Insurance Fund: 5.1% of the employee's salary.
• Accident Insurance: Minimum rate of 0.2%, with the exact rate varying depending on the industry and its associated risks.

Tax Deductions

Several deductions are available to reduce the taxable income of employees:

• Standard deductions related to children, with increased amounts and higher income thresholds for eligibility.
• A new deduction of RUB 18,000 for individuals who pass labor and defense readiness tests.

Simplified Taxation System (STS)

The STS has seen some adjustments. Income thresholds for eligibility have increased, along with changes to VAT obligations for businesses using this system.

Other Tax Changes

The corporate income tax rate has been raised to 25%, with some exceptions and incentives available. Changes to tax exemptions on certain financial transactions, such as the sale of shares or membership interests, have also been introduced, with exemptions no longer applying to amounts exceeding RUB 50 million.

General Information about Employee Tax and Payroll in Russia

• Employment contracts are mandatory and must be in Russian. They should clearly define the terms of employment, including salary, benefits, working hours, and termination conditions.
• The standard work week is 40 hours, with overtime limited to four hours over two consecutive days and a maximum of 120 hours annually. Overtime pay is typically 150% of the regular hourly rate for the first two hours and 200% thereafter.
• Employees are entitled to annual paid leave of at least 28 calendar days.
• Employers are responsible for calculating, withholding, and remitting employee taxes to the relevant authorities.
• Russia operates a pay-as-you-earn (PAYE) system, requiring employers to deduct income tax and social security contributions from employees' salaries each pay period.
• Payroll is typically processed twice a month.
• Employers must comply with various reporting obligations, including submitting payroll reports and tax returns to the tax authorities and social security funds.
• Non-compliance with tax and payroll regulations can lead to penalties and legal action.

It is crucial for employers to stay up-to-date with the latest tax legislation and regulations in Russia to ensure compliance and avoid potential penalties. Information provided is valid as of today, February 5, 2025, and may be subject to change. Consulting with a qualified tax advisor is recommended.