The cost of hiring an employee in Russia: salary, taxes and contributions

What an employee really costs a foreign-owned company in Russia — gross salary, NDFL, employer social contributions and the total cost of employment.

The salary you offer is not what an employee costs you in Russia. On top of gross pay, the employer pays social contributions, and personal income tax (NDFL) is withheld from the employee's salary. This guide breaks the total cost of employment into its parts so you can budget accurately. Figures are indicative — your adviser confirms them for your case.

Gross salary and net pay

Employment costs start with gross salary. From it, the employer withholds NDFL — 13% for residents, rising to 15% above an annual threshold, and up to 22% under the progressive scale for high incomes — and pays the remainder to the employee as net. NDFL is the employee's tax, but the employer administers it.

Employer social contributions

On top of gross salary, the employer pays unified social contributions at roughly 30% up to a base threshold, with a reduced rate above it. This is a genuine additional cost to the employer, not a deduction from the employee. Accredited IT companies and some other categories qualify for materially lower rates.

Total cost of employment

The practical rule: budget the total employer cost as gross salary plus roughly 30% in contributions. For a foreign specialist on an HQS permit, add the permit and its renewals, but note the favourable 13/15% NDFL rate from day one. For a team of engineers in an accredited IT company, the reduced contribution rate changes the maths significantly.

Beyond the numbers

Compliant employment in Russia also means correct contracts, payroll runs, and personified reporting each period. The cost of getting this wrong — penalties, disputes — exceeds the cost of running it properly. We handle payroll, NDFL, contributions and reporting as one function.