1. Labor Market and Salaries in
Russia 20.5.2014
Samuli Pesu
Partner
Awara Group

2. Awara Group
LEGAL ACCOUNTING
RECRUITMENT
& TRAINING
MARKET
RESEARCH
200
specialists
6 offices
3
countries
Practical
solutions for
business
needs
Guidance for
risk
management
Best customer
service &
communication
2

3. LABOR MARKET IN MILLION CITIES IN
RUSSIA

4. 12 Million Cities (census 2010).
74% Urban Population
Source: RIA Novosti
and GKS

5. 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

6. Labor Force in Russia (total
75.4 million) in Q4 / 2013
7
2.8
3.8
0.7
1.4
2.3 1.8 1.7 1.3
2.1 1.9 2.1 2 1.4
Source: GKS

7. Unemployment Rate (%) in
Russia in 4Q / 2013
5.6
2 2
2.8
4.7
5.7 6.1
4.4
2.7
7.4
4.2
6
4.4
6.1
7.6
Source: Rosstat

8. 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

9. Increase of Wage to Previous
Year vs. Inflation 2000 - 2013
20.9
19.9
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
10.9
12.7
9.7 9.0
14.1
11.7
6.9
8.5
5.1
6.5
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

10. 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

11. 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 Guide
11

12. 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 Guide
12

13. Employer’s Cost
 For an office employee in Moscow to receive 5000 EUR net
salary, 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% on
56504 EUR over the limit) = 9388 EUR .
– Mandatory work-related accident and health insurance (0.2% on
annual gross salary 68964 EUR) = 138 EUR
 Total sum: 78490 EUR / year
 Monthly: 6541 EUR
13

14.  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 Publications
14
Foreign Employees Work Permits

15. SALARY SURVEY – AVERAGE BASIC
SALARY LEVEL (EUR) AFTER TAXES
2013-2014

16. 16
Sales Director Average Salary
3800
2100 2300 2100
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

17. 17
Sales Representative Average Salary
1500
1000
700
1200
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

18. 18
Chief Accountant Average Salary
2100
1400
1200 1200
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

19. 19
Lawyer Average Salary
2100
1600
1000
800
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

20. 20
IT Manager Average Salary
2800
2100
1900
1700
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

21. SALARY SURVEY – BASIC SALARY
LEVEL (EUR) AFTER TAXES 2013-2014
FOR *TOP EARNERS

22. 22
Sales Director Top Earners
9400
7300
5200
3100
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

23. 23
Sales Representative Top Earners
3100
2500
1500
1900
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

24. 24
Chief Accountant Top Earners
4200
3200
2500
1700
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

25. 25
Lawyer Top Earners
7300
4200
2500
1200
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

26. 26
IT Manager Top Earners
5200
4200
5200
2600
MOSCOW ST. PETERSBURG YEKATERINBURG SOCHI

27. 27
E-Commerce & Online Marketing Salary
Survey in Moscow
4300
3000
2200
3000
7000
3900
3000
4800
E-Commerce Director Head of Internet
Projects
Social Media Marketing
Manager
Digital Marketing
Manager
Lower Range Average Higher Range Average

28. Benefits / Managers &
Specialist
72%
59%
35%
32%
24%
13%
8% 8%
4%
7%
13%

29. Recruitment Time at Awara
 Middle management and specialists: 2 – 4 weeks
 Top management and board members: 3 – 6
weeks
 The above mentioned time periods are general
recruitment times for different level of positions.
Actual time of delivery depends on individual
requirements and client’s commitment to providing
necessary feedback and information.

30. Questions or Comments?

31. Thank You!
Samuli Pesu
Partner, Head of Sales and Marketing
Awara Group
E-mail: samuli.pesu@awaragroup.com
Mobile: +7 926 710 43 61
Office: +7 495 225 3038
www.awaragroup.com