How Russian Income Tax Works — НДФЛ
Russia uses a flat-rate personal income tax (НДФЛ) of 13% on annual income up to ₽5,000,000 and 15% on the excess. This is one of Europe's lowest headline rates. Crucially, employers pay all social contributions (~30% on top of gross salary) — employees only lose НДФЛ from their paycheck. Self-employed ИП commonly use the УСН «Доходы» simplified regime: 6% on total revenue. Note: from January 2025, Russia introduced a new 5-bracket system (13%–22%).
| НДФЛ Rate (2024) | Annual income |
|---|---|
| 13% | ₽0 – ₽5,000,000 |
| 15% | Above ₽5,000,000 (on the excess only) |
- →Social insurance (ОПС + ОМС + ОСС): ~30% paid entirely by the employer — not deducted from employee take-home pay
- →Child deduction (стандартный вычет): ₽1,400/month per child (1st & 2nd), ₽3,000/month (3rd+) — reduces НДФЛ base
- →ИП on УСН 6%: fixed insurance contributions ₽49,500/year + 1% of revenue above ₽300,000 (max additional ₽277,571)
- →УСН tax can be reduced by 100% of fixed contributions for ИП without employees — very efficient at low revenues
- →Самозанятый (NPD freelancer) regime: 4% on revenue from individuals, 6% from businesses — no mandatory fixed contributions
- →Corporate profit tax: 20% (3% federal + 17% regional) — from 2025 increased to 25%
- →File and pay via nalog.gov.ru — salaried employees rarely file; ИП must submit declaration by April 30
Frequently Asked Questions
Do employees need to file a tax return in Russia?
Most employees do not. Your employer (налоговый агент) withholds НДФЛ from each paycheck and submits it to the FNS automatically. You only need to file a 3-НДФЛ declaration if you have additional income (rental, freelance, investments), want to claim deductions (mortgage interest, education, medical), or earned more than ₽5M in a year.
What is УСН and is it better than standard НДФЛ for self-employed ИП?
УСН «Доходы» (Упрощённая система налогообложения) is a simplified 6% tax on total revenue for registered ИП. It replaces standard НДФЛ and is almost always better at low to mid incomes. You can deduct fixed insurance contributions (₽49,500/year in 2024) directly from the УСН tax — for small ИП this can eliminate the tax entirely. УСН «Доходы минус расходы» (15% on profit) is an alternative for businesses with high expenses. Note: the Самозанятый (NPD) regime at 4–6% is even simpler but has revenue cap of ₽2.4M and no employee permitted.
When is the Russian income tax deadline?
Salaried employees: tax is withheld monthly — no personal deadline. ИП on УСН: advance payments due April 28, July 28, October 28 each year; final declaration by April 30. ИП on ОСНО: same payment schedule, 3-НДФЛ declaration by April 30. Late filing incurs a 5% monthly penalty on the unpaid tax amount (minimum ₽1,000). The deadline for paying 1% additional contribution (on revenue above ₽300k) is July 1 of the following year.
How are dividends taxed in Russia?
Dividends paid by Russian companies to Russian tax residents are taxed at 13% (15% on the amount exceeding ₽5M/year combined with other income). Dividends from foreign companies are also taxed at 13%/15% as ordinary income. There is no separate lower dividend tax rate — it counts toward the same progressive thresholds as salary. From 2025, the 5-bracket system (up to 22%) applies to total income including dividends.