Hire in Russia
Russia PEO &
Employer of Record
Hire & manage teams remotely in Russia without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
Russian
Salary Currency
Russian Ruble (RUB)
Payroll tax
15.50% - 20.00%
Payroll Cycle
Monthly
Time zone
UTC +2 - 12
Capital city
Moscow
Hire Employees in Russia
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in Russia
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Russia
01.
Compliance & Payroll
02.
Payroll Reporting
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Russia
Employee Income Taxes:
Tax Base:
- Personal income is taxed at a 13% tax rate on income for residents.
- 30% on income for non-residents on the territory of the Russian Federation.
- 35% on certain kinds of income.
- 6% on income in the form of dividends.
Tax Brackets
Sample Calculation
Employer Costs in Russia
Employer Contribution
22% (up to a maximum of RUB 876,000, plus 10% of any excess salary above this) – Pension Fund
2.9% (up to a maximum or RUB 755,000) or 1.8% (foreigners temporarily staying in Russia) – Social Insurance Fund
5.10% – 5.90% – Medical Insurance
Additionally, mandatory accident insurance contributions paid at rates ranging from 0.2–8.5% of an employee’s salary, depending on the level of assessed risk of the employee’s occupation. This pays separately to the above social security contributions, and still administered by the social funds.
Benefits & Insurance in Russia
Public Pension
The state pension covers all public and private sector employees, as well as civil servants. The basic part of the state pension is pay-as-you-go financed with a strong redistributive element towards low-income earners as it provides a flat-rate benefit. The legal retirement age in Russia is 60 years old for men and 55 years old for women.
Working Hours in Russia
Working Hours Per Week
Normal working hours in Russia should not exceed 40 hrs per week. However, certain categories of workers mentioned below are allowed to work less than that:
- workers less than 16 years of age must not work more than 24 hours per week;
- workers between 16 to 18 years old must not work more than 35 hours per week;
- disabled workers must not work more than 35 hours per week;
- medical workers should work no more than 39 hours per week;
- teachers and other pedagogical workers must not work more than 36 hours per week;
- reduced working hours are also applicable for employees who work in specific harmful and hazardous conditions.
Overtime
Any hours worked above the normal 40 hours per week are considered overtime. Overtime is only allowed by the employer with the written consent of the employee. The duration of overtime should be no more than four hours for two days in a row and 120 hours per year.
Overtime is payable at 150% of the regular hourly rate for the first 2 hours of overtime and at 200% of the regular hourly rate for every subsequent hour. If the employee requests, overtime work can be compensated by additional time off, instead of enhanced pay.
Termination Laws in Russia
The Russian Labour Code provides six groups of grounds for termination:
- separation agreement;
- expiration of the term of a fixed-term employment agreement;
- termination at the initiative of the employee (resignation);
- termination at the initiative of the employer (termination for cause, terminations related to transfers and redundancy (lay off));
- forced termination, due to circumstances beyond the parties’ control;
- the illegal signing of an employment contract (e.g. the hiring of an employee who is administratively banned from the relevant profession).
“At-will” termination of employment relationships is generally not permitted, except for a CEO of a Russian entity. In any case, if an employer is willing to terminate an employment contract on the grounds of an employee’s having served a resignation notice, the termination should be carried out in full compliance with all legislative and procedures applicable to that particular ground for dismissal.
Severance
The minimum severance payment rates are set by the Labour Code and they depend on the ground for termination.
No severance is required in case of the following termination:
- for cause;
- due to the expiry of a contract’s term;
- through an employee’s resignation;
- in specific other cases.
When an employment contract is terminated because of a company’s liquidation or a staff reduction, severance pay with amounts between 1 and 3 times the average monthly wage is given to the dismissed employee.
Severance pay equals to two weeks’ average wages shall be paid to employees in the event of termination for the following reasons, among others:
- an employee’s health condition requires him/ her to transfer to another job but he/she refuses, or no such job is available with the employer in question;
- an employee is drafted to military service;
- an employee refuses to relocate when an employer moves to another locality;
- an employee is recognized as completely disabled;
- an employee refuses to continue to work because of a change in the conditions of the labour contract.
Employment Contract in Russia
Employment Contract
There are three main types of employment contracts in Russia:
- Open-ended contracts: This is the most commonly used contract and comes with no definite term of validity. In General, employment contracts are open-ended in Russia.
- Fixed-term: These contracts come with definite time and are permitted only in a very limited no of cases and the duration of the fixed contract should not exceed more than five years. Renewing such a contract can lead to the risk of the contract being classified as open-ended contract.
- Seasonal Contract: Such contracts do not have a validity of more than 2 months.
Probation Period
The maximum length of trial period is 3 months. Trail period exceeding 3 months i.e. 6 months can be established only for the CEO’s of the Russian company, the chief accounts, the heads of branches, Representative offices, and other subdivisions.
Types of Leaves in Russia
Annual Leave
Each employee is allowed annual paid leave of at least 28 calendar days.
Extended annual paid leave is provided to specific categories of workers, e.g. employees working in the Northern regions, or in a harmful workplace, or having “irregular working hours”.
Annual leave is to be provided in the year it accrues, and if there remains any unused leave then it is carried forward to the next year.
Sick Leave
Sick leave allowance is paid to the employee instead of her salary after confirmation by a standardized medical certificate.
The allowance is paid at the expense of the Social Insurance Fund, with the exception of the first three days that are paid by the employer.
The amount of the temporary disability allowance depends on the length of service of the insured person and could range from 60%, 80%, or 100% of the average wage on which insurance premiums are calculated.
As per Russian law, there is no concept of separate ‘disability leave’. This is considered as a succession of ordinary sick leave until the employee recovers or is qualified as permanently disabled.
Maternity & Paternity Leave
There are two types of maternity leave in Russia:
- pregnancy and childbirth leave starts 70 calendar days (84 in the case of a multiple pregnancy) before childbirth and lasts 70 calendar days (86 in case of birth complications and 110 in case of a multiple birth) after childbirth, and
- childcare leave can last until the child is 3 years old. This leave can be taken by the mother, father or any other relative or guardian who actually takes care of the child.
Other Leaves
Following are the cases when certain categories of employees are entitled to additional forms of annual leave (fully paid), such as:
- employees of Northern regions (their entitlement is 8 or 16 or 24 days of additional paid leave, depending on the region);
- employees with ‘irregular working hours’ are entitled to 3 extra days;
- employees in harmful workplaces are entitled to 7 extra days;
- employees disabled in Chernobyl are entitled to 14 extra days;
- students, for the exam periods (certain leaves of this kind are unpaid).
There are also a number of specific cases which provide an entitlement to additional paid or unpaid days off, for example:
- 4 paid days off per month for a caretaker of a disabled child;
- paid days off for blood donors;
- paid days off for medical check-ups;
- up to 5 days of unpaid leave in case of marriage and death of a close relative.
Public Holidays in Russia
Public Holidays
Employees are entitled to 11 paid public holiday days off per year. 5 of these are mandatory for all employers, and the other 6 can be chosen by the company (but must be consistent for all company employees).
- New Year’s Holidays – January 1 to 6
- Orthodox Christmas Day – January 7
- Defender of Fatherland Day – February 23
- International Women’s Day – March 8
- Spring and Labour Day – May 1-2
- Victory Day – May 9
- Day of Russia – June 12-13
- National Unity Day – November 4