One of the challenges that foreign companies face when onboarding talents in Russia are the labor laws and compliance that they must follow. Below are some of the essential items to look into when expanding operations in the country.
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
Employee contracts in Russia must be written in the Russian Language. Bilingual contracts are allowed as long as one of the languages is Russian.
Probation Period
The Probation Period for Russian employees can be up to 3 months.
13th Month Pay
A 13th month bonus is not mandatory in Russia.
Employee Benefits
Russia offers a lot of coverage for their employees. Below are the basic package they offer:
- Pension
- Social Security
- Medical Insurance
- Accident Insurance
Payroll cycle
Employees are usually paid bi-weekly.
Minimum wage
Minimum wage in Russia is set at RUB 22,440.
Overtime pay
| Period of Overtime |
Rate |
| First 2 hours |
150% |
| Next 2 hours |
200% |
Business partner



Employer Payroll Tax
| Scheme |
Employer’s contributions |
| Mandatory pension insurance |
30% (a reduced rate of 15.1% applies to any excess over the maximum base of RUB 2,225,000) |
| Mandatory medical insurance |
5.1% |
| Temporary disability and maternity insurance |
2.9% |
| Accident insurance |
0.2% – 8.5% |
Employee Payroll Tax
In Russia, there are no payroll taxes that employees must observe.
Employee Income Tax
| Net Taxable Income (RUB) |
Contribution |
| Up to RUB 2.4 million |
13% |
| From RUB 2.4 million to 5 million |
15% |
| From RUB 5 million to 20 million |
18% |
| From RUB 20 million to 50 million |
20% |
| From RUB 50 million |
22% |
VAT
The Standard VAT in Russia is 20%.
Termination process
An employment contract can only be terminated in accordance with a strict list of general reasons, including:
- Mutual agreement
- On the employee’s/employer’s initiative
- Expiry of the contract
- Other specific grounds
Employment can only be terminated on the employer’s initiative for specific reasons, including:
- The employer’s liquidation
- Redundancy
- Numerous failures by the employee to fulfill official duties without good reason provided a reprimand has been issued
- Gross misconduct
- Unauthorized disclosure of confidential information
- Other rarely used grounds
In general, under the current legislation, dismissal is not feasible without prior notice being served on the employee.
Notice period
The Notice Period for probationary employees is up to 14 days while regular employees have up to 4 weeks.
Severance pay
The severance payment rate depends on the reasons for the termination. Below are the regulations surrounding it:
| Reason(s) for termination |
Severance Pay |
| Company liquidation |
1 month’s salary plus the average monthly salary during the period they are looking for a new job (but for no longer than two months from the date of termination). |
|
– Failure to conform to the standards of the job due to health
– military service or any alternative civilian service in place of military service.
– Reinstatement at work of the employee that previously held the employee’s position.
– The employee’s refusal to relocate when the employer moves to another locality.
|
2 weeks’s average earning |
Visa and immigration
Foreigners must secure a work permit and work visa to work in Russia legally. Applicants must secure an invitation from their employers to be able to process their documents. The visa options for expats include Work Visa, Business Visa, and Highly Skilled Migrant Visa.