Payroll Accounting Outsourcing in Russia
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Are you planning to outsource your payroll accounting in Russia or would like to change your current provider? We would be pleased to support you with expertise and knowledge.
Payroll accounting in Russia is a sensitive and very confidential part of a company's accounting. In order to maintain confidentiality and to prevent the in-house accounting department from being informed about the salaries of all employees in Russia, it is advisable to outsource internal payroll accounting.
The payroll accounting in Russia has to take into account numerous country-specific peculiarities of Russian labour law, which are responsible for increased complexity in payroll accounting. Starting with the calculation of the taxes up to the collection, documentation and transfer of personal data.
Payroll accounting in Russia differs from that in Western countries for instance in the following ways:
Salary payments and their actual payout date are specified in the company's internal documents. In addition, the salary must be paid to the employee in two parts in the form of a salary advance payment (avans) at the middle of the month and a salary payment (zarplata) at the end of the month. For this, the legal regulations have to be taken into account in each case, otherwise official penalties and fines are the consequence.
In Russia, the additional salary costs or pension, social security and other state insurance contributions and their amount are usually either adjusted by the responsible authorities at the beginning of the calendar year or confirmed accordingly for the current year. In this context, it is therefore important to be up to date in order to prevent possible complications. In general, these contributions are degressive or, if certain salary thresholds are reached, the percentages of some incidental salary costs are reduced.
In Russia, the compensation for holidays is not paid to the employee on a regular basis, but rather an average salary for the last few months is calculated, which must be paid to the employee for the duration of the holiday, at least 3 days before the start of the holiday. As a result of bonus payments or illness, the holiday pay may differ from the salary. Another special characteristic is that holidays are defined in calendar days and not work days.
In Russia, the compensation for illness or pregnancy is usually dependent on the circumstances. In the case of illness, medical certificates must be obtained from the employee. The actual compensation paid to the employee by the state insurance company amounts to only a small part of the employee's original salary. Compensation for pregnancy or parental leave can last one and a half to a maximum of three years, the amount of compensation depends on the average salary of the previous three calendar years.
The accounting for business trips is similar to the principle of remuneration for holidays, but a different calculation coefficient is applied, which is why the remuneration for business trips is therefore higher in comparison. Furthermore, the employee is paid diets, the amount of which is determined in the company's internal guidelines.
To be able to pay bonus payments to an employee, it is necessary to create a corresponding internal instruction. As far as taxes and other non-wage income such as pensions, social security contributions and other government insurance contributions are concerned, this is identical to the salary.
What are the advantages of outsourcing payroll accounting in Russia?
The outsourcing of payroll accounting can be attractive for companies for various reasons. A large share of the resulting advantages are similar to those of a complete accounting outsourcing. In addition to saving financial resources, the underlying idea behind a spin-off is above all that it is possible to permanently close a security gap within the company that is not to be neglected.
On the one hand, internal payroll accounting involves the risk that sensitive data on the salaries of individual employees can be viewed in the system and that this highly confidential information can be passed on within the company or to unauthorized third parties. If each employee knows about the salary of the other employee, this can quickly lead to conflicts and disputes within the workforce and can place a lasting burden on the cooperation of individual parties.
On the other hand, outsourcing guarantees the correct and punctual payment of individual salaries, thus ensuring transparency on the side of the parent company. This helps to prevent intentional wrong payments as well as errors in general and ensures complete control.
Last but not least, outsourcing can be a flexible way of responding to new situations, and if the number of employees increases sharply due to a project, for example, this can be easily solved by the provider, which would be difficult to achieve with a separate accounting department or by hiring additional accountants. Whether and how quickly experienced payroll accountants are available is difficult to assess, but in Russia it can generally be assumed that there is a shortage of skilled workers rather than a surplus.
Our services for you in the area of payroll accounting outsourcing in Russia:
When outsourcing your payroll accounting, we take over
Calculation of payroll according to Russian law
Management reports on payroll accounting according to your requirements
Calculations of payroll taxes and social taxes
Calculations of payments for vacations and sick-leave
Data on personal income, personalised pension fund report
Preparation of all salary / tax / pension payment orders
and keep all related information strictly confidential. In this way, we support you in concentrating on your main business and provide support for sensitive issues in this context, as well as for an examination by the Russian authorities.
Do you have any questions regarding payroll outsourcing in Russia? Do not hesitate and contact us. Please feel free to send us an e-mail, give us a call or make an appointment at one of our offices in Moscow, St. Petersburg or Vienna.
Further information on the outsourcing of payroll accounting in Russia as well as on numerous other topics in the Russian economy can be found in the publications section or on our Russia Economy blog.
Business Set-Up, accounting and reporting in Russia
Ausserer & Consultants is an international tax and accounting company based in Moscow, St. Petersburg and Vienna. Since our foundation in 2012, we have made it our mission to support small and medium-sized companies in local accounting including tax returns, reporting, business Set-Up and expansion in Russia. We also advise on individual questions regarding the Russian market and support our clients at all times.