Russia

The Russian labour market

Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, taxes, and other benefits related to them. In TalentUp, we are starting a series of different blog articles, one for each country. This article analyses the Russian labour market.

Even if the national currency is the Russian Ruble (RUB), the whole article is in EUR to compare easily across countries and exchange rates.

General data about the Russian labour market

Payroll taxes in Russia

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries. 

Contingencies from self-employees

Self-employed pay 6.6% of total employment taxes.

Example of net salary in Russia

As a reference, we use the average salary of a software engineer. In Russia, on average, software engineers earn 30,300€ annually.

The employer contributes 9,150.6 to 11,665.5€.

After paying the income tax, the employee has a net salary of 26,361€, coming from a gross salary of 30,300€. 

Unemployment regulation in Russia

Notice periods in Russia are not required. Notice only applies if dismissal is a result of liquidation, redundancy, failed probation, or the end of a fixed-term contract.

Severance pay lasts for two months.

The probation period usually lasts for three months, 6 for positions such as directors or senior managers.

Different kinds of leaves in Russia

Employees are entitled to 28 calendar days (20 working days) of paid leave per year. One period of leave should be no less than 14 days. There are 15 days of public holidays.

In Russia, an employee who becomes ill has a right to a sick leave allowance that the employer will pay for the first three days of the illness. Following that, the Social Insurance Fund of the Russian Federation pays it using funds from the employer’s insurance payments. The sick leave allowance varies based on the employee’s overall length of service but does not exceed 25€ per day. Employers have the option to pay a higher rate.

Other common leaves:

• Study leave: employees studying higher education are entitled to 40 days of paid leave during the first two years of learning and 50 days of paid leave for the remaining learning term; the employer pays this allowance.
• Bereavement: 5 days of leave.
• Military leave:  employees who are parents and spouses of military personnel, killed or seriously injured during military service, or due to a disease associated with military service are entitled to up to 14 calendar days of unpaid leave during a year.

Paid parental leave

The maternity leave allowance is determined by calculating the earnings from the two calendar years before the year of maternity leave. Divide these earnings by the total number of calendar days in those two years, excluding any periods of temporary disability. The resulting average daily earnings are then multiplied by the number of calendar days of maternity leave to determine the total maternity leave allowance to be paid. Maternity leave lasts for 140 days.

Up until the child turns 18 months old, a relative or guardian caring for the child may request paid parental leave with payment of the allowance from the Social Insurance Fund of the Russian Federation.

Employees can also take up to five days of unpaid leave after the birth of a child.

In cases where employees are raising a child without the child’s mother, they are entitled to the same benefits that are guaranteed to women.

Other common Russian benefits

How to employ a Russian worker

This often involves registering a legal entity or establishing a branch or representative office.