Employer of Record in Russia

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Russia if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Russia below, to avoid any compliance issues.

Employment Contract Requirements

In Russia, employment agreements are required to be documented in writing. By default, these agreements are considered indefinite unless otherwise specified. However, there is flexibility to terminate a fixed-term contract under specific conditions, provided the duration does not surpass 5 years. The minimum requirements for employment contracts include:

• Identification of both parties
• Date and place of contract conclusion
• Starting date (and duration for temporary contracts)
• Workplace and working hours
• Job title, description, duties, and responsibilities
• Workplace conditions (e.g., risks related to work, compensation)
• Basic salary (including additional benefits)
• Nature of work
• Social insurance contributions

Onboarding Process

We can help you get a new employee started in Russia quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in Russia

Typically, probation or trial periods in Russia are established through collective agreements. However, it is a customary practice to have a probationary period of 3 months in Russia. For certain positions such as directors, senior managers, etc., this period may be extended to 6 months.

In Russia, the standard working week consists of 40 hours, distributed as 8 hours per day. In typical working hours, Monday through Friday, the hours are 9:00 AM to 6:00 PM, with a one-hour lunch break.

Full-time employment in Russia is legally defined as 40 hours per week, typically distributed across five working days. For the first two hours of overtime work, employees must receive at least 1.5 times their standard hourly rate. For all subsequent overtime hours, the compensation increases to at least 2 times the standard hourly rate. As of September 1, 2024, overtime pay must account not only for an employee's base salary but also for compensatory and incentive payments included in the employer's overall remuneration system.

Setting up a local legal entity in Russia can be time-consuming and expensive. It often involves complex paperwork, local representation, banking, registrations, and ongoing tax filings, which isn't cost-effective if you're simply looking to hire a few employees or test the market. An Employer of Record removes these barriers entirely. Instead of spending months establishing a presence, an EOR lets you hire and onboard employees within days while staying fully compliant.

This enables faster market entry and greater agility. Whether you’re launching a pilot program, supporting a regional client, or adding specialized talent, you don't need to commit to long-term infrastructure to explore new business opportunities. The EOR handles local employment logistics while you retain day-to-day oversight of your hires. This model lets you scale up or down based on business needs, giving you more flexibility with less overhead and risk.

Employers operating in Russia must navigate a multifaceted payroll tax system that includes withholding personal income tax (PIT) at rates that follow a progressive scale: 13% for income up to 2.4 million RUB annually, 15% for income between 2.4 and 5 million RUB, 18% for income between 5 and 20 million RUB, 20% for income between 20 and 50 million RUB, and 22% for income above 50 million RUB. Non-residents are typically taxed at 30% on Russian-sourced income.

Additionally, employers are responsible for contributing to various social funds: 22% to the Pension Fund (with a reduced rate of 10% for income exceeding 1,465,000 RUB), 2.9% to the Social Insurance Fund (up to 966,000 RUB), 5.1% to the Medical Insurance Fund, and 0.2% to 8.5% for Accident Insurance, depending on the industry risk classification. Compliance requires timely reporting and remittance of these taxes, with monthly and annual reporting obligations to Russian tax authorities.

To manage these complexities and ensure adherence to Russian tax laws, many employers use payroll management software to consolidate payroll data and maintain compliance with local regulations.

One of the biggest risks in global hiring is payroll mismanagement. In Russia, even small errors in tax reporting or social contribution payments can trigger audits, fines, or reputational damage. For companies without in-country expertise, the risk isn’t worth taking. An Employer of Record removes this burden by owning the legal responsibility of payroll, executing every step with built-in compliance.

Key Ways an EOR Supports Payroll in Russia:

• Mitigates Compliance Risk: Oversees all legal obligations for payroll, tax filings, and recordkeeping.
• Local Regulatory Expertise: Interprets and applies Russia’s latest labor and tax changes in real time.
• Free Processing: Reduces mistakes in wage calculations and reporting through built
• Payroll Record Management: Maintains compliant payroll audit trails and documentation for each employee.

In Russia, work permits and visas are essential for employers hiring foreign workers. The process involves obtaining work permits, applying for the appropriate visa types, and adhering to the legal requirements set by Russian authorities.

The key visa types include the Single-Entry Work Visa (valid for up to 90 days), Multiple-Entry Work Visa (typically valid for one year), and Highly Qualified Specialist (HQS) Visa (valid for three years with a minimum salary requirement of ₽250,000/month), each catering to different employment scenarios. Employers must handle the sponsorship process, including securing quota approval, submitting applications, and ensuring compliance with Russian labor laws.

Mandatory Leave Entitlement in Russia

The annual leave entitlement in Russia is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Russia

The following 8 public holidays are celebrated in Moscow, Russia:

Paid Time Off in Russia

Employees in Russia are entitled to 28 calendar days of paid leave annually, with a minimum of 14 consecutive days. Certain employee categories may receive additional leave. Vacation pay, equivalent to the average salary of the past 12 months, must be paid at least 3 days before leave, and any unused vacation days carry over for an extra 12 months.

Maternity Leave In Russia

In Russia, pregnant employees receive a 708.23 RUB early registration allowance for the first 12 weeks, while maternity leave allowance, capped at 565,562.20 RUB for 140 days, is calculated based on average daily wage. Childbirth allowances and childcare leave up to 3 years, with a maximum allowance of 29,600.48 RUB for 1.5 years, are directly paid by the social fund to employees. Standard maternity leave comprises 140 calendar days – 70 days before the expected delivery date and 70 days after childbirth.

Parental Leave In Russia

Relatives or guardians caring for a child up to 18 months receive paid parental leave covered by the Russian Federation's Social Insurance Fund. They are entitled to 5 days of unpaid leave after the child's birth and, when raising the child without the mother, receive benefits akin to those offered to women.

Paternity Leave In Russia

In Russia, there is no specific statutory paternity leave. However, fathers can utilize parental leave provisions.

Sick Leave In Russia

In Russia, employees are entitled to sick leave for illness or injury. Employers cover the sick leave allowance for the first 3 days, and from the fourth day onward, the Social Insurance Fund takes over. The daily allowance, depending on the employee's service length, does not exceed 2,301 RUB but can be higher if chosen by the employer, applicable even for those caring for a sick child or relative.

Bereavement Leave

Employees are granted 5 days of paid leave in the event of the death of a family member.

Study Leave

Employees pursuing higher education are eligible for 40 days of paid leave in the initial two years of study and 50 days of paid leave for the subsequent term, with the employer covering the allowance.

In Russia, benefits play a central role in attracting and retaining top talent. Employees often expect more than just a paycheck – they're looking for stability, healthcare coverage, pension plans, and other perks that show a company is invested in their well-being. If you're not familiar with what’s standard or required, you risk falling short. An Employer of Record helps bridge that gap by administering a locally competitive benefits package that meets both legal requirements and employee expectations.

An EOR doesn't just check boxes, they make sure your employees receive benefits that are timely, properly communicated, and well-managed from the moment they’re onboarded. From managing healthcare contributions to adjusting for regional differences in leave or bonus entitlements, an EOR acts as both a legal and operational partner. The result is a better employee experience, less administrative burden on your internal team, and greater confidence that your offer is aligned with what top candidates in Russia actually want and need.

Termination Process in Russia

Terminations in Russia must be done for a just cause, and at-will termination is not allowed. Compliant terminations include:

• Mutual agreement
• Voluntary employee resignation
• Unilateral decision by employer in accordance with the law (e.g., probationary period, company liquidation, staff reduction, failure to fulfil work duties without valid reasons, or cases of gross violations)
• Contract expiration

Notice Period in Russia

In Russia, providing notice periods is not mandatory except in specific situations, such as dismissals resulting from company liquidation, redundancy, unsuccessful probation, or the conclusion of a fixed-term contract. Some instances are:

• Employee laid off by company: 2 months notice period (payment can be in lieu of notice)
• Expiration of fixed-term contract: 3 days notice
• Unsuccessful probation period: 3 days notice

Severance in Russia

In Russia, termination due to liquidation or redundancy results in severance pay equal to the average monthly wage. Employers support dismissed employees for two months in their job search. If no job is found by the third month and the employee registered promptly with the employment service within two weeks of dismissal, they qualify for an additional month's average salary. This must be requested by the employee within 15 working days after the third month following dismissal and must be paid within 15 calendar days from the date of application.