How is the minimum wage calculated?
The minimum wage is the basis for calculating wages for Russian citizens. The country has a single minimum tariff for calculating earnings, but in the regions the local government has the right to change the amount according to allowances and living conditions.
The base rate for calculating remuneration for work is established simultaneously throughout Russia. Taking into account the characteristics of each region, a regional minimum wage has been introduced in the country. Its amount includes:
- premiums for harmfulness, unfavorable working conditions;
- salary;
- regional coefficients;
- some types of bonuses: for high qualifications, length of service, etc.
Bonus payments must be transferred more than once and be more than just an incentive measure, since one-time cash rewards are not included in the minimum wage.
The regional type of the base amount cannot be set below the federal value. The indicator can only be increased. The basic rate also includes personal income tax, after which the employee will receive a lower salary. Since the minimum wage in Russia has been increased to 9,489 rubles since January 1, 2018, when receiving the lowest salary minus personal income tax, the employee will receive no more than 8,255.43 rubles.
Minimum amount of labor from 01/01/19: table by region
In accordance with the law on minimum wages, separate values are established in each subject of the Russian Federation, since due to the large territory of the country, climate conditions in the regions are different, including in the Far North. Therefore, from the beginning of the current reporting period, increased coefficients are applied depending on the location of the employer.
The table shows the minimum wage in force in 1919 in some regions.
| The subject of the Russian Federation | Minimum wage |
| Altai | 11 thousand 280 rub. + coefficient |
| Amur region | |
| Arkhangelsk region | |
| Astrakhan region | |
| Bryansk region | |
| Vladimir region | |
| Volgograd region | In the amount of ½ of the minimum amount, but not less than the established amount for able-bodied citizens |
| JAO | 12,000 rub. for all employees, regardless of length of service |
| Irkutsk region | 11 thousand 280 rub. + coefficient |
| Kabardino-Balkarian Republic | |
| Kaliningrad region | |
| Kaluga region | |
| Kostroma region | 11 thousand 280 rub. + coefficient 1.15 = 12,837.45 rub. |
| Krasnodar region | 11 thousand 280 rub. |
| Lipetsk region | In the amount of ½ of the minimum indicators, but not less than the established amount for able-bodied citizens (IV quarter of 2017) |
| Rostov region | |
| Sevastopol | 11 thousand 280 rub. |
| Smolensk region | |
| Stavropol region |
Note: if in the region in which the employer operates there is a special document establishing the minimum wage in the region, then the employee’s salary cannot be less than the amount specified in Federal Law No. This fact is established in Article 133.1 of the Labor Code of Russia.
Article 133.1 of the Labor Code of the Russian Federation “Establishing the amount of the minimum wage in a constituent entity of the Russian Federation”
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Minimum wage in the second quarter of 2020
The lowest rate for calculating earnings depends on the size of the subsistence minimum (LS) and according to Art. 133 of the Labor Code of the Russian Federation, the minimum wage has no right to be set below this indicator. Until mid-2018, the law was not observed and the monthly minimum wage exceeded the minimum wage.
The Government of the Russian Federation decided to raise the minimum wage from January 1, 2018 by 21.6% relative to 2020. Thus, the minimum wage in 2020 was 9,489 rubles, but the smallest indicator for the life of Russians for the second quarter of this period was more than this amount - 10,038 rubles. Therefore, the government decided to increase the minimum wage in 2018 to 11,163 rubles on May Day.
Now, when calculating the total amount of funds for VNIM, it is worth taking into account the base tariff of 11,163 rubles. But if the employee went on one or another vacation from May 1 of the previous period, then payments must be calculated from the previous minimum wage - 9,489 rubles.
At the regional level, the minimum wage also increased, taking into account the increase in the federal indicator. Since the municipality has the right to increase the local indicator, employees of this region have no right to earn less than this minimum wage. But if an employee receives remuneration less than the regional one, but more than the federal value, then the employer must raise the salary to the local level. To increase the rate, the head of the enterprise must enter into a regional agreement on the minimum wage. Otherwise, the employee will continue to earn the same amounts.
When the minimum wage increases, Russian companies automatically “conclude” a regional agreement, but if the management is against it, then the latter are given 30 calendar days to write a refusal request, clearly explaining their position. If one does not arrive, this means that the company agrees with the terms of the agreement.
Minimum wage in the regions
According to Art. 133.3 of the Labor Code of the Russian Federation, regions have the right (but are not obligated) to set their own levels of minimum wage. At the same time, the law imposes the following requirements on them:
- They must be calculated taking into account local socio-economic realities (wages, prices and unemployment);
- They should also take into account the local cost of living and strive to match it in the future;
- They cannot be below the minimum wage established by the state.
Today, many of the constituent entities of the Russian Federation have acquired their own minimum guaranteed wage. Some of them use the federal minimum wage only for the budget segment, and set their own limit for the extra-budgetary segment. The own minimum wage is set either by donor regions (territories that do not experience problems with budget replenishment, such as Moscow, St. Petersburg and regions where the oil and gas industry is developed), or by the territories of the Far North, where the federal minimum wage is simply unviable (since it is impossible to survive It’s impossible even in theory for this money at “northern” prices). The highest minimum wage in Russia is traditionally paid in Moscow: the Moscow minimum wage in 2020 is 17,300 rubles.
Despite the fact that the federal minimum wage increased significantly in July, for many regions this was not a reason for rejoicing: regional minimum wages in many constituent entities of the Russian Federation increased only slightly, or generally remained at the same level (as, for example, in the Ivanovo region). In the Ryazan region, the minimum wage for public sector workers generally fell compared to winter - 6350 versus 6500, while for workers of non-budgetary organizations it increased from 6500 to 7500. Obviously, this means that Ryazan does not experience a shortage of public sector workers, but private business is developed rather weak.
Table of minimum wages in the regions of Russia in 2020.
In the past period, the minimum wage rate changed twice and since mid-2018 the amount has increased by almost 17.6%. Therefore, the minimum wage from May 1, 2018 was 11,163 rubles, since at the legislative level the minimum wage should be greater than or equal to the current subsistence level.
At the regional level, the geographical and socio-economic position of the territory was taken into account; in some cities the minimum wage increased in 2020 from January 1 by region. The table presents the maximum threshold for work remuneration. From the first month of 2020, the salary must be equal to or greater than 9,489 rubles, and from May 1, 2020, the lower limit of remuneration for work is 11,163 rubles; the base for calculating remuneration cannot be lower than this value.
Table 1. Minimum remuneration level in Russian regions in 2020.
| Region (city and regional center) | Minimum wage, rub. | |
| from May 1, 2018 | ||
| Altai | 9729 | 11 163 |
| Amur Arkhangelsk Astrakhan Belgorod Vladimir Vologda Voronezh Jewish Autonomous Okrug Irkutsk Kamchatka Karachay-Cherkessia Krasnodar Kurgan Magadan Murmansk Nenets Autonomous Okrug Novosibirsk Omsk Orenburg Penza Primorsky Krai Samara Saratov Sakhalin Sverdlovsk Smolensk Stavropol Tambov Tver Tomsk Khabarovsk Yugra Chelyabinsk Yamalo-Nenets A About the Republic: Adygea Bashkiria Buryatia Ingushetia Kalmykia Mordovia Sakha North Ossetia Tyva Khakassia Udmurtia Chechnya Chuvashia Chukotka | 9489 9489 | 11 163 11 163 |
| Bryansk | 9550 — 10 615 | 11 163 |
| Volgograd | 11 228 | 11 228 |
| Transbaikal region | 11 490 | 11 490 |
| Ivanovo | 10 993 | 11 163 |
| Kabardino-Balkaria | 11 925 | 11 925 |
| Kaliningrad | 11 000 | 11 163 |
| Kaluga | 10 806 | |
| Kemerovo | ||
| Kirov | 10 159 | 11 163 |
| Kostroma | 10 723 | |
| Krasnoyarsk | ||
| Kursk | 10 196 | 11 163 |
| Leningrad | 11 400 | 11 400 |
| Lipetsk | 10 754,4 | 11 163 |
| Moscow | 18 742 | 18 742 |
| Moscow | 13 750 | 14 200 |
| Nizhny Novgorod Karelia Komi Ryazan | 10 000 | 11 163 |
| Velikiy Novgorod | 10 751 | |
| Eagle | ||
| Permian | ||
| Pskov | ||
| Dagestan | 9922 | 11 163 |
| Crimea Sevastopol | 9500 | 11 200 |
| Mari El | 10 047 | 11 163 |
| Tatarstan | 10 126 | |
| Rostov | ||
| Saint Petersburg | 13 500 — 17 000 | 13 500 — 17 000 |
| Tula | 11 440 — 13 520 | 11 440 — 13 520 |
| Tyumen | 9530 — 11 212 | 11 212 |
| Ulyanovsk | 12 000 | 12 000 |
| Yaroslavl | 9530 — 10 469 | 11 163 |
What will the minimum wage affect?
The smallest base for calculating work remuneration affects the amount of compensation for sick leave, the period for child care and pregnancy, as well as maternity leave. The amount of compensation money and the conditions for receiving funds depend on the current base rate.
The amount of money for VNIM is calculated from the average pay per working day and length of service at the previous and current job. The minimum amount of payments for sick leave, maternity leave and child care for children under one and a half years old is calculated in proportion to the minimum wage in exceptional situations. Since the minimum wage for 2020 has increased, the amounts and terms of payments have increased.
Table 2. Impact of the minimum wage on benefits.
| Payment type | Influence |
| For temporary disability | The amount is calculated based on the minimum wage if the employee has less than two years of experience |
| Maternity | The amount of the benefit is calculated from the minimum wage if the employee has less than two years of experience |
| Child care up to one and a half years old | Calculated from the base tariff for calculating salary if the average profit for the employee’s labor exceeds the minimum wage |
Connection with a living wage
The living wage in Russia is an indicator designed to assess the standard of living of citizens and establish a base amount for calculating remuneration for the work of employees. The PM also forms the federal budget based on the needs of Russians, because it includes the consumer basket and funds for providing social support to citizens. The cost of the consumer basket includes prices for:
- food, non-food products and services;
- costs of rent, fees, taxes (NDFL).
Accordingly, in order for citizens to have enough funds to pay for the minimum amount of products, services, mandatory payments and taxes, the state must allocate at least this amount. This procedure is established by law. But until 2020, the law was broken. Therefore, since last year, Russian minimum wage officials have taken a course towards moving closer to the subsistence level. Thus, the minimum wage in 2020 until May of the previous period was 6% less, and after that the minimum wage level increased by 11.25% of the subsistence level. Now the minimum wage for 2020 is calculated so that citizens have funds to compensate for the consumer basket.
From the first increase in the minimum wage to the minimum wage, it was decided to establish equality between the indicators. Perhaps in 2020 and subsequent years the minimum wage will not lag behind the subsistence level.
How often does the minimum wage increase?
Until 2020, the minimum wage in Russia was set according to inflation dynamics. The government reported that this has a positive impact on the federal budget. Therefore, the minimum wage did not change from the beginning of each year, but in January, June, July, May, September and other months.
According to Art. 133 of the Labor Code of the Russian Federation, the minimum tariff for calculating earnings directly depends on the cost of living, which did not meet the requirements of the code. This was explained by the fact that a gradual increase would not cause damage to the Russian economy. Thus, since April 2020, the minimum indicator has become equal to the PM indicator. Since the cost of the consumer basket, which is included in the vital financial minimum, increases annually, a decision was made to annually index the minimum wage in Russia.
Thus, in 2020, the base rate for calculating work remuneration was determined from the beginning of January. Now according to para. 2 tbsp. 1 Federal Law No. 82 of June 19, 2000 (as amended on December 25, 2018), the minimum wage in Russia is planned to be indexed according to the PM on January 1 of the corresponding year.
To track the dynamics of the minimum wage in Russia, a table of minimum wages by year has been developed
Living wage in Russia for the 2nd quarter of 2020
In accordance with Article 1 of the Federal Law “On the Minimum Wage”, since January 2020, the maximum permissible salary level has been fixed in the Federal Law regulating the amount of monthly wages in relation to able-bodied citizens.
The provisions of the regulatory document were approved in general for the Russian Federation and were in force in the second quarter of 2020. Order No. 550n of the Ministry of Labor and Social Protection of Russia, in force since August 2018, establishes PM amounts. The regulatory document included figures approved per person. The minimum wage in the last reporting period was 10 thousand 444 rubles.
At the same time, the parameters were divided depending on the category of the population:
- for citizens of working age and status - 11 thousand 280 rubles;
- persons who have retired - 8 thousand 583 rubles;
- for minor citizens - 10 thousand 390 rubles.
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Thus, in the current reporting period, the minimum wage according to the law of the Russian Federation is 11 thousand 280 rubles.
Order of the Ministry of Labor of Russia dated August 24, 2018 N 550n “On establishing the cost of living per capita and for the main socio-demographic groups of the population in the Russian Federation as a whole for the second quarter of 2020”
