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Russia

Basic Economic Summary

Overview

Russia’s geographical location contributed to the country’s vast riches and high economic standing. They are a leading producer of oil and natural gas, owning about 30% of the world’s natural resources. They are the 5th largest economy in Europe and 11th largest in the world. The country’s citizens are some of the most successful in the world due to their economic stability and well-developed education system. 

Basic Information

  • Local Languages: Russian
  • Major Economic Hubs: Moscow, St. Petersburg, Yekaterinburg, Kazan, Krasnodar, Novosibirsk
  • Currency: Russian Ruble (RUB)
  • Population: 146.04 million (2022)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 11,900.00 (2022)
  • Exchange Rate (RUB/USD): 0.014
  • PISA Ranking (2018): 30*
  • Number of University Graduates (2019): ~1.04 million*

Local Universities

Renowned Local Universities

University Ranking
Moscow State University World Ranking: 129 ; Local Ranking: 1
National Research University Higher School of Economics World Ranking: 146 ; Local Ranking: 2
St. Petersburg State University World Ranking: 322 ; Local Ranking: 3
Russian Presidential Academy of National Economy and Public Administration World Ranking: 401 ; Local Ranking: 4
Kazan Federal University World Ranking: 470 ; Local Ranking: 5

Salary Data

Average Salary of Jobs

Job Title Average Salary (RUB) Average Salary (USD)
Customer Service Representative 19,300 - 56,700 262.73 - 771.85
Software Engineer 51,700 - 144,000 703.78 - 1,960.25
Software Developer 77,200 - 131,000 1,050.91 - 1,783.28
Data Scientist 82,500 - 249,000 1,123.06 - 3,389.59
UX Designer 33,200 – 112,000 451.95 - 1,524.64
Project Manager 65,700 - 198,000 894.36 - 2,695.34
Sales Representative 29,200 - 101,000 397.49 - 1,374.90

More information about average salaries in Russia can be found on SalaryExplorer.

Talent Sourcing Tips

English Proficiency: Moderate Proficiency

Number of LinkedIn Users (2020): 7,030,000

Top Local Job Portals: Head Hunter, Superjob, Rabota, Trovit,

Top Recruitment Agencies: Acuris, Atsearch Crowd Recruitment, Next Generation Recruitment Services, Adelphi Recruitment, Versus Service

Taxes

Employer Payroll Tax

Type of Tax Contribution (%)
Pension Fund 22.0% (capped at RUB 1,465,000 a year), with 10% for any amount exceeding this
Social Insurance Fund 2.9% (capped at RUB 966,000/year)
Medical Insurance Fund 5.1%
Accident Insurance 0.2% to 8.5% of the wage fund, depending on the type of work

The employer payroll tax can be found here.

Employee Monthly Income Tax

Net Taxable Income (RUB) Contribution
Annual income is less than or equal to 5 million RUB 13%
Annual income is more than 5 million RUB 15%
Non-residents 30%

Minimum Wage & Payroll

Minimum Wage

As of 2021, the minimum monthly wage is RUB 12,792. However, different areas, regions, or cities in Russia may have a higher minimum wage. For example, in Moscow, the minimum wage is RUB 20,589.

Payroll Cycle

Usually paid bi-weekly.

Bonus

13th month salary

Not mandatory.

Working Hours & Statutory Leave

Working hours

Working hours are typically 8 hours a day and cannot exceed 40 hours per week.

Maximum overtime hours

Should not exceed 4 hours in 2 successive days and 120 hours per year.

Overtime pay

Period of overtime Hourly salary paid (%)
First 2 hours 150%
Next 2 hours 200%

Work-on-rest-day pay

Work during rest days (e.g. weekends and on public holidays) is paid at a minimum of 200% of the regular pay rate.

Public Holidays

The 14 public holidays can be found here.

Offboarding & Termination

Annual Paid Leave

Employees are entitled to a total of 28 days of annual paid leave.

Sick Leave

First 3 days of sick leave (confirmed by medical certificate) are paid for the employer.

4th day onwards is paid for at the expense of the Social Insurance Fund.

Sick leave allowance varies depending on the overall length of service, but it does not exceed RUB 2,301 per day.

Parental Leave

Maternity Leave

Female employees are entitled to 140 days of paid maternity leave – 70 days before birth and 70 days after birth. If the employee has complications during birth, this may be extended to 86 days, and in the case of multiple births 110 days.

Parental Leave

Can be taken until the child is 18 months old.

Granted to mothers, fathers, grandmothers, grandfathers, and other relatives or guardians of a child. Only one parent/person can take parental leave.

Equivalent to 40% of the employee's average salary over the previous two years. A maximum amount is determined every year (RUB 27,984.66/month in 2020).

Paternity Leave

Falls under parental leave.

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 certain reasons, including:

  • The employer's liquidation
  • Redundancy
  • Numerous failures by the employee to fulfil official duties without good reason, provided a reprimand has been issued
  • Gross misconduct
  • Unauthorised 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 duration of notice periods depends on the grounds for termination. This ranges from 0 (if the employment contract is terminated for cause) to 2 months (in the case of liquidation of the employer organization).

The employee can terminate the employment on his/her own initiative by providing the employer with two weeks' prior written notice (for directors, one month's notice). The indicated notice periods cannot be extended in the individual employment contracts.

Severance Pay

The severance payment rate depends on the reasons for the termination and generally amounts to an average month's wage.

Severance pay of two weeks' average earnings is paid to employees in the event of cancellation of an employment contract for the following reasons:

  • Failure to conform to the standards of the job held or work fulfilled as a result of the employee's health precluding them from continuing to perform specific job duties.
  • The employee is called up for military service or assigned to 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.
  • Severance pay of one month's average earnings is paid to employees in the event of termination due to redundancy or liquidation.
  • In the event of termination due to mutual agreement, the amount of severance is usually established in the termination agreement.
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).
(1) Failure to conform to the standards of the job held or work fulfilled as a result of the employee's health precluding them from continuing to perform specific job duties.
(2) The employee is called up for military service or assigned to alternative civilian service in place of military service.
(3) Reinstatement at work of the employee that previously held the employee's position.
(4) The employee's refusal to relocate when the employer moves to another locality.
(5) Severance pay of one month's average earnings is paid to employees in the event of termination due to redundancy or liquidation.
(6) In the event of termination due to mutual agreement, the amount of severance is usually established in the termination agreement.
2 weeks' average earnings

Probation period

3 months for regular employees, up to 6 months for top executive employees (e.g. CEOs, chief accountants, branch head and/or representatives, and their deputies).

Employee Benefits

Insurance

Russia’s Social Insurance Fund is a compulsory social security benefit for Russian citizens whereby employers are required to make contributions on behalf of their employees and contractors. The contributions are diversified into three fund categories: The Pension Fund, Social Insurance Fund and Medical Insurance Fund. 

Employees are not liable to contribute to this state fund. Only businesses registered in Russia are obligated to provide this benefit for their constituents. For more information on the calculations for the funding, you may refer here.


Employee Share Option Plan

Many companies in Russia offer share rewards as a long term incentive for employees. Some of the plans they offer are: 

  • Employee share plans.
  • Share option plans.
  • Share purchase and acquisition plans.
  • Restricted share and restricted share unit (RSU) plans.
  • Other share awards payable in shares or in cash.

For more information regarding this benefit, please click this link.

VAT

The Standard VAT in Russia is 20%.

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