National Insurance Contributions: Rates.

The social tax is calculated by an employer separately for each employee or worker.

The tax rates are: annual tax base is up to 280,000 roubles - 26%; next 320,000 roubles - 10%; amounts above 600,000 roubles - 2%.

From January 1, 2010 the unified social tax will be abolished. Instead, employers will make contributions to separate funds: the state pension fund, the social security fund, and the medical insurance funds.

The laws introduce a flat rate of social duties and only the first 415,000 roubles (from January 1, 2011 - 463,000 roubles or app. $16,500), or 135% of an average salary in Russia, will be taxable. In 2010 the rate will remain 26%, the same as in 2009; in 2011 it will go up to 34%. For small companies, the introduction of the flat scale will mean a heavier burden as early as in 2010, because salaries in the range 280,000 - 415,000 roubles will be taxed at the rate 26% instead of 10%, in 2009.

According to the new law the payroll taxes on the salaries of foreigners temporarily working in Russia are not payable. With income tax only 13% Russia, therefore, will remain an attractive destination for the foreign labour. Small and medium domestic enterprises on the other hand will feel a dramatic, some experts say triple, increase of the tax burden.

On June 17, 2011, President Dmitry Medvedev announced that from January 1, 2012 the rates of national insurance contributions will go down from 34% to 30% and for small business, except the trading ones, from 26% to 20% and will stay at this level for two years. This change is subject to law to be adopted by Russian Parliament.

 

 

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