Salaries and payroll taxes in Russia: what an employee really costs
A Russian salary has two tax layers: personal income tax (NDFL) withheld from the employee, and social contributions (pension, medical, social) paid by the employer on top. This guide breaks down both — and what you pay personally as a company owner.
What a Russian salary is made of
When you agree a "salary" in Russia you normally mean the gross amount. Two very different things happen to it:
- NDFL (personal income tax) is withheld from the employee's gross pay. The employee receives gross minus NDFL — the net salary.
- Social contributions are added on top by the employer and paid to the state. They are a company cost, not deducted from the employee.
So the number the employee sees (net), the number you agree (gross) and the number the company actually spends (total cost) are three different figures.
Personal income tax (NDFL)
NDFL is deducted by the employer as tax agent and paid to the budget. Rates depend on tax residence:
- Tax residents (183+ days in Russia): 13%, rising on a progressive scale for higher incomes from 2025 — 13% up to 2.4M ₽ a year, then 15%, 18%, 20% and 22% on the top band.
- Non-residents: generally 30%, but 13% for highly qualified specialists (HQS), citizens of EAEU countries, patent-based workers and some other categories.
NDFL reduces the employee's take-home pay; it does not cost the company extra beyond administration.
Employer social contributions (pension, medical, social)
On top of the gross salary the employer pays insurance contributions that fund pensions, healthcare and social insurance. Since 2023 these are combined into a single unified tariff to the Social Fund of Russia:
- ≈30% of gross salary up to an annual base ceiling, then a reduced rate (about 15.1%) on pay above the ceiling;
- plus an injury/accident contribution of 0.2%–8.5% depending on the company's occupational-risk class (office work is at the low end, ~0.2%).
These are paid by the company in addition to salary — which is why a Russian employee's true cost is well above their gross pay. Small and medium enterprises and IT companies pay much less (see reduced rates).
The true cost of a salary: worked example
A tax-resident employee on a gross salary of 100,000 ₽/month, standard (non-reduced) rates:
| Line | Rate | Amount |
|---|---|---|
| Gross salary | — | 100,000 ₽ |
| NDFL withheld from employee | 13% | −13,000 ₽ |
| Employee receives (net) | — | 87,000 ₽ |
| Social contributions (employer) | ≈30% | +30,000 ₽ |
| Injury contribution (employer) | 0.2% | +200 ₽ |
| Total cost to the company | — | ≈130,200 ₽ |
So a 87,000 ₽ take-home salary costs the company about 130,200 ₽ — roughly 1.5× the net. As a small or medium enterprise the contributions on the part above the minimum wage fall to 15%, which cuts the employer add-on markedly (see below).
If you are the company owner: salary vs dividends
As an owner you can take money out of the company two ways, taxed very differently:
- As a salary (if you are also director/employee). Same as any employee: NDFL 13% withheld, plus employer social contributions of 15%–30% on top. The salary is a deductible expense for the company, reducing its profit tax.
- As dividends. Paid from profit after corporate tax. Dividends to an individual are taxed at 13% NDFL (15% on the part above 2.4M ₽ a year; non-residents 15%) and carry no social contributions. But they are not deductible for the company and can only be paid when there is distributable profit.
The result is a genuine trade-off: a salary adds contributions but lowers company tax; dividends avoid contributions but come out of already-taxed profit. Many owners use a modest salary plus dividends. The optimal split depends on your tax regime (USN or general), profit level and whether you are a resident — we model it for your situation.
Reduced rates worth knowing
- Accredited IT companies: qualify for sharply reduced social-contribution rates (and other incentives), a major reason IT businesses incorporate in Russia.
- Regional and special-zone reliefs may further reduce the burden for eligible activities.
- HQS workers do not pay social-contribution rates.
How we help
We set up compliant payroll, register your company with the Social Fund and tax authority, calculate NDFL and contributions, file the monthly and quarterly reports, and advise owners on the most efficient salary-and-dividend mix — all handled remotely.
Frequently asked questions
How much tax is withheld from a Russian salary?
Personal income tax (NDFL) is withheld from the employee's gross salary — 13% for most tax residents (a progressive scale from 13% up to 22% applies to high incomes from 2025). Non-residents generally pay 30%, EAEU citizens and some others pay 13–22%.
What social contributions does an employer pay in Russia?
On top of the gross salary the employer pays a unified social contribution of about 30% (to the Social Fund) up to an annual base, plus an injury contribution of 0.2%–8.5% by risk class.
Are contributions deducted from the employee or paid by the employer?
NDFL is deducted from the employee's gross salary. Social contributions are paid by the employer on top of the gross salary, so the true cost of an employee is higher than their gross pay.