Samuli pesu-labor-market-and-salaries-in-russia-20052014

Labor Market and Salaries in

Russia 20.5.2014

Samuli Pesu

Partner

Awara Group

Awara Group

LEGAL ACCOUNTING

RECRUITMENT & TRAINING

MARKET RESEARCH

200

specialists6 offices

3

countries

Practical solutions for

business needs

Guidance for

risk

management

Best customer

service &

communication

2

LABOR MARKET IN MILLION CITIES IN

RUSSIA

12 Million Cities (census 2010).

74% Urban Population

Source: RIA Novosti

and GKS

Million Cities in Russia (census

2010)

11.5

4.9

1.5 1.4 1.3 1.2 1.2 1.1 1.1 1.1 1.1 1

Source: GKS

Labor Force in Russia (total

75.4 million) in Q4 / 2013

7

2.83.8

0.71.4

2.3 1.8 1.7 1.32.1 1.9 2.1 2 1.4

Source: GKS

Unemployment Rate (%) in

Russia in 4Q / 2013

5.6

2 22.8

4.75.7 6.1

4.4

2.7

7.4

4.2

6

4.4

6.1

7.6

Source: Rosstat

Salary Index in Russia (Russia

average 100) in Q2 / 2013

70%75%72%

84%86%82%78%78%

94%85%

100%121%125%

197%100%

0% 50% 100% 150% 200% 250%

Volgograd oblast

Republic of Bashkortostan

Rostov oblast

Chelyabinsk oblast

Republic of Tatarstan

Omsk oblast

Samara oblast

Nizhny Novgorod oblast

Sverdlovsk oblast

Novosibirsk oblast

Leningrad oblast

Moscow oblast

St. Petersburg

Moscow

Russia

Source: Mojazarplata.ru, analysis by Awara

Increase of Wage to Previous

Year vs. Inflation 2000 - 2013

20.919.9

16.2

10.9 10.6

12.6 13.3

17.2

11.5

-3.5

5.2

2.8

8.4

17.9

21.0 21.6

15.8

13.7

10.912.7

9.7 9.0

14.1

11.7

6.98.5

5.16.5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Increase of Average Monthly Wage to Previous Year (%) Inflation (%)

Source: Rosstat and Деловая жизнь

Minimum Wage (1.1.2014)

Russia = RUB 5 554 (EUR 111)

St. Petersburg = RUB 8868 (EUR 177)

Moscow = RUB 12 600 (EUR 252)

Real salaries much higher

10

Employer's Insurance

Contributions

The insurance contributions are paid in full at a rate of 30% for an

annual income (from the same employer) of up to RUR 624,000

(EUR 12460), after which limit the income is subject to a rate of 10%

without any further limitations.

Under the general rule the 30% insurance contributions are divided

as follows:

– 22% is contributed to the Pension Fund (10% tail exceeding the

limit goes here as well);

– 2.9% is contributed to the Social Insurance Fund;

– 5.1% is contributed to the Compulsory Medical Insurance

Federal Fund

Source: Awara Russian Tax Guide11

Insurance Contributions

In addition, the rates for mandatory work-related accident and health

insurance range from 0.2% to 8.5% of the total salary.

Foreign nationals that have received a work permit under the

privileged status of a so-called highly qualified specialist are exempt

from insurance contributions (except mandatory work-related

accident and health insurance).

Source: Awara Russian Tax Guide12

Employer’s Cost

For an office employee in Moscow to receive 5000 EUR netsalary, the employer must pay the following:

– 5000 / 0.87 (13% income tax) = 5747 EUR gross monthly salary.Annual gross salary 5747 EUR x 12 = 68964 EUR

– Annual Insurance contributions (30% on 12460 EUR + 10% on56504 EUR over the limit) = 9388 EUR .

– Mandatory work-related accident and health insurance (0.2% onannual gross salary 68964 EUR) = 138 EUR

Total sum: 78490 EUR / year

Monthly: 6541 EUR

13

Two types of work permits available:

– Highly qualified work permit• Rather easy process, takes about 1 month

• Valid for 3 years

• Personal income tax of 13% applies in Russia upon receipt of such work permit

– Normal work permit• Longer process, takes about 3-4 months

• Valid for 1 year

• Necessary to obtain quota (not for top positions)

• Personal income tax of 30% applies until foreign nationals have stayed in Russia for 183 days over a 12-month period.

Source: FMS, Awara Publications14

Foreign Employees Work Permits

SALARY SURVEY – AVERAGE BASIC

SALARY LEVEL (EUR) AFTER TAXES

2013-2014

16

Sales Director Average Salary

3800

2100 2300 2100

MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

17

Sales Representative Average Salary

1500

1000

700

1200


18

Chief Accountant Average Salary

2100

14001200 1200


19

Lawyer Average Salary

2100

1600

1000800


20

IT Manager Average Salary

2800

21001900

1700


SALARY SURVEY – BASIC SALARY

LEVEL (EUR) AFTER TAXES 2013-2014

FOR *TOP EARNERS

22

Sales Director Top Earners

9400

7300

5200

3100


23

Sales Representative Top Earners

3100

2500

15001900


24

Chief Accountant Top Earners

4200

3200

2500

1700


25

Lawyer Top Earners

7300

4200

2500

1200


26

IT Manager Top Earners

5200

4200

5200

2600


27

E-Commerce & Online Marketing Salary

Survey in Moscow

4300

3000

2200

3000

7000

3900

3000

4800

E-Commerce Director Head of InternetProjects

Social Media MarketingManager

Digital MarketingManager

Lower Range Average Higher Range Average

Benefits / Managers &

Specialist

72%

59%

35%32%

24%

13%8% 8%

4%7%

13%

Recruitment Time at Awara

Middle management and specialists: 2 – 4 weeks

Top management and board members: 3 – 6weeks

The above mentioned time periods are generalrecruitment times for different level of positions.Actual time of delivery depends on individualrequirements and client’s commitment to providingnecessary feedback and information.

Questions or Comments?

Thank You!

Samuli PesuPartner, Head of Sales and MarketingAwara Group

E-mail: [email protected]: +7 926 710 43 61Office: +7 495 225 3038www.awaragroup.com

mailto:[email protected]

http://www.awaragroup.com/

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Samuli pesu-labor-market-and-salaries-in-russia-20052014