Establishing and managing payroll in Russia
Russia is a huge country with a diverse culture, a powerful economy, and huge potential for businesses willing to make the effort of expanding their operations there.
However, the process of hiring and setting up a payroll in Russia can be difficult for foreign organizations, with language barriers, and regular unexpected delays often stalling progress and cutting into revenues.
At Horizons, we help organizations from all sectors to build and scale their operations in Russia with our payroll outsourcing services. We will handle your organization’s payroll setup and management, giving you full flexibility to focus on your Russian expansion, even if you don’t yet have an established entity in the country.
Why choose the Horizons payroll solution?
If you have an entity
For businesses that have already registered an official entity in Russia, we offer a comprehensive and tailored payroll outsourcing service. Our expert team will set up and manage your payroll, also handling all of your associated administration, HR, and compliance with local laws.
This level of outsourcing is ideally suited to larger organizations and those expanding into Russia in the long-term.
If you don’t have an entity
For organizations that have not established an entity in Russia, we provide full support to help set up, manage a payroll, and hire your local workforce. Through our Russian subsidiary, you can recruit and pay your employees, giving you greater flexibility a scalable, low-risk route into the Russian market.
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Russia payroll guide
Taxation and withholdings in Russia
Employers in Russia must pay a contribution to certain social benefits for their employees These contributions cover things like pensions, disability insurance, and more, and total around 22% of salaries (although there are maximum limits in place).
Employees in Russia need to pay 13% in income tax of income. This does vary, however, for foreign workers and in some other situations.
Companies in Russia need to pay a corporate tax of roughly 20%.
Entitlements and terminations rules in Russia
Employers in Russia may need to negotiate termination, severance, and other entitlement terms on an individual basis with their employees. As a rough estimate, employees receive several (three or more) months of severance pay in place of a notice period.
We strongly advise that you enlist professional advice when terminating employment contracts in Russia, as litigation is common.
Probation periods are generally limited to three months during which time employees are not usually entitled to these notice periods upon termination.
How to establish a Russia payroll
To establish and run payroll yourself, your organization will need to follow a complex set of laws and procedures that are unique to Russia, as well as operate and negotiate in the Russian language. You will usually have to register a legal entity, sign up with the relevant authorities, open bank accounts, and hire a workforce.
Alternatively, you can outsource everything to Horizons. Our Russia experts can take care of the entire payroll process for you, from setup to management, HR, and hiring, whether or not your business has an entity in Russia.
Manage payroll in Russia
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.