Publication date 05/28/2021
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News In 2021, the procedure for calculating employee wages has changed significantly. For those whose earnings exceed 25 MCI, the changes affected only the VOSMS rate, and a new tax deduction for VOSMS was also introduced. For the same employees whose earnings were less than 25 MCI, the procedure for applying the 90% adjustment has radically changed. Let's look at specific examples of how to calculate salaries in 2021.
Concept of Labor Law
Wages (wages) on the territory of the Russian Federation are regulated by a number of laws and legislative acts:
- Constitution of the Russian Federation.
- Labor Code of the Russian Federation.
- Separately adopted laws.
For example, Law No. 272-FZ “On Amendments to Certain Legislative Acts of the Russian Federation on the Issues of Increasing the Responsibility of Employers for Violations of Legislation Regarding Remuneration.”
The legal framework on this issue makes it possible to determine the minimum wage, terms of payment of wages, a system of material incentives and penalties, punitive measures for the employer’s failure to timely fulfill its obligations to pay monetary compensation to employees, etc.
Determine the ratio of the constant and variable parts
What ratio to set between salary and bonus is the next question you need to decide. What does the company pay salaries for? For fulfilling duties? Yes. But not only. Usually, even the managers themselves forget that the company pays the salary to the employee for fulfilling the norm. It doesn’t matter what this norm is made up of - the volume of work, the quality of work performed, time. It is important that the employee must earn a salary. This rule does not apply to all positions, but 100% applies to the most important ones, which directly affect the financial results of the business and which should be kept in the focus of constant attention.
The bonus is paid accordingly for exceeding the norm. And, as a rule, conditions for the payment of bonuses apply. For example, an employee will receive a full bonus if he complied with the technology. Thus, to determine the boundary between the constant and the variable part, you should establish a norm.
There is one more important detail that cannot be neglected. This is the market value of the employee. Most recently, I advised a company on the motivation system. The conversation turned to the fact that, according to the logic of their business, the distribution of income for a sales manager should look like 30% of salary and 70% of bonus. However, given the narrow specialization and long training period, the company is forced to assume that the competitor pays managers a huge salary and rare bonuses. Accordingly, no matter how much we would like to create a correct bonus system, from the point of view of business logic, we cannot ignore this external factor.
Each company must determine the percentage ratio of the constant and variable parts of an employee’s income for itself. There are so many factors that influence decision making on this issue. But if we give general recommendations, then for positions where an employee works within a structured process and the result of the work depends not so much on him as on external factors, then the distribution can be:
Income (100%) = Salary (80%) + Bonus (20%)
This formula is used to pay accountants and lawyers. The work of sales managers who act more like an intermediary can also be paid (the brand is so well known and popular that the client is ready to buy it without bargaining with the seller).
Payment for a seller who is engaged in active consultative sales, in which it is necessary to create a need in the client and convince him to buy from him, should be carried out according to a different scheme:
Income (100%) = Salary (20%) + Bonus (80%).
The formula is used if the result of work is largely determined by the contribution of the employee himself (qualification, amount of time and effort spent on work). This payment is very close to the ideology of remuneration for an entrepreneur who is willing to take risks and invest money and effort for the sake of future significant benefits.
There may be some middle options. If the employee can make 50% above the established norm, then the formula will look like:
Income (100%) = Salary (50%) + Bonus (50%)
It is important to remember that the motivation system works when the employee clearly understands why he receives a salary and what a bonus is for. He should be interested in both the size of the bonus and what he must do to earn it. And of course, he must understand that he is capable of completing these tasks.
Elements of wages
Salary consists of three elements:
- fixed part;
- variable part;
- additional payments.
The fixed part is the salary , which will be discussed below.
Varies depending on the actions of a particular employee, type of business, or even geographic location. For example, residents of the northern regions receive an allowance for harsh living conditions . In this case, the variable part each month will be a certain proportion of the salary, depending on the specific region: from 15 to 100%.
Additional payments may be associated with production features, seasonality, or the employee’s performance of work not specified in his employment contract.
For example, employees of some enterprises receive cash payments to pay for food. Covering the cost of travel to the vacation destination will also be an additional payment, since it rarely occurs.
Differences from salary
Salary is the so-called base from which the main calculations will be made when paying wages.
Firstly, based on the salary, tax deductions come first. Secondly, in case of processing, corresponding increases are accrued. Monetary fines for damage to property or other penalties may also be deducted, and bonuses and incentives may be added.
What the employee ultimately receives in his hands is his salary. It can be either higher than the salary or lower . Often the salary is stipulated for a certain amount of hours, but during the course of work an employee can exceed this standard at the request of his superiors by doing overtime work.
Read our article on how overtime work is paid.
The salary is strictly regulated by the legislation of the Russian Federation.
It must be specified when drawing up an employment contract with an employee and is a fixed value. The salary is an estimated amount and is not stated anywhere in advance.
In this case, the employee should carefully monitor its value . Sometimes an employer may write off damage to equipment or materials as a deduction of an employee’s wages, although in fact the employee himself was not to blame for this (directly or indirectly). For some reason, the employer decided to write off the damage specifically as salary.
This is a gross violation, for which the employer can be sued.
A striking example is the work of counselors at a summer camp, who are financially responsible for the safety of property on the premises. Sometimes the administration does not conduct a thorough check after the previous shift has left, and therefore some breakdowns are withheld from the salaries of newly arrived teachers.
The employee has the right to know exactly what deductions were made from his wages.
The employment contract must necessarily indicate the employee’s salary, the system for calculating and increasing it.
The salary can be calculated depending on the remuneration system. It happens:
- tariff (when the employer can evaluate the employee’s work results depending on the time and the agreed production rate);
- tariff-free (salaries depend on the final profit of the entire enterprise);
- mixed (the total profit of the enterprise and the contribution of an individual employee to it are taken into account).
In Russia, it is usually customary to take into account the tariff system, or rather its time-based form. At the same time, the qualifications and length of service of the employee are taken into account, which should be indicated in the employment contract.
Do not forget that this document indicates only the employee’s established salary, while the final salary may differ either down or up.
Sometimes employers specify a mixed payment system in the contract, which is especially important for the sales sector, when a talented specialist can earn several times his salary as a result of his work.
Salary and wages - what is the difference in accordance with the Labor Code of the Russian Federation and legislation
Before you begin to consider how a salary differs from a salary, it is worth determining what these concepts mean and how exactly their legal regulation is ensured in Russian legislation. Thus, these concepts and the aspects that regulate them are disclosed mainly in Article 129 of the Labor Code of the Russian Federation, but in practice they are used and regulated in a much larger number of articles of the Labor Code, as well as in other all-Russian and regional normative documents and acts.
At the same time, differences in the concepts of salary and wages are directly fixed in labor legislation, and despite the fact that in practice they can be interchanged with each other by both employers and workers themselves, in all official documentation it is necessary to adhere to the terminology enshrined in the Labor Code of the Russian Federation. Otherwise, confusion in these terms may lead to possible recognition of it as a violation of labor laws.
For example, if an employee’s salary is actually set below the minimum wage for a full-time job, this is not a violation. But if the employment contract stipulates the payment of wages below the minimum, then for the very fact of such a mention in the text of the employment contract, the employer can already be brought to administrative responsibility under Article 5.27 of the Code of Administrative Offenses of the Russian Federation.
What is a rate?
The wage rate is a fixed amount that is calculated when paying an employee's salary per unit of time.
The “rate” is stated in the staffing table and is usually equal to one.
It is not affected by the employee’s qualification level, length of service, education or age, whereas these factors are fundamental for determining salary.
But these two concepts also have something in common: both values cannot be less than the minimum amount specified by the state , which is regulated by Article 133 of the Labor Code of the Russian Federation.
All taxes and social payments from salary
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Taxes and payments from wages are withheld, calculated and transferred to the budget by the employer (tax agent). Accordingly, all formulas are below for employers. To calculate the net salary, it is enough for an employee to know how IIT, OPV and VOSMS are calculated.
Adjustment_90%_by_IPN = (salary - OPV - VOSMS - 1 minimum wage) * 0.9
- OPV— rate 10%.
- Deducted from the salary at the expense of the employee (affects the salary “in hand”).
- Cannot be more than 10% of 50 minimum wage
- 212,500 tenge in 2021 - OPV = salary * 0.1
- VOSMS — rate 2%.
- Retained at the expense of the employee (affects salary in hand)
- Cannot be more than
2% of 10 minimum wages - VOSMS = salary * 0.02
- IPN — rate 10%.
- Deducted from the salary at the expense of the employee (affects the salary “in hand”).
- If the salary is more than 25 MCI - 72925 tenge in 2021. IPN = (salary - OPV - VOSMS - 1 minimum wage) * 0.1
- If the salary is less than 25 MCI, IPN
= (salary - OPV - 1 MW - VOSMS - adjustment_90%_by_IPN) * 0.1
or IPN = (salary - OPV - 1 MW - VOSMS) * 0.01 Adjustment formula for IPN - at the beginning of the list - CO — rate 3.5%.
- Retained at the expense of the employer (does not affect the salary in hand).
- Cannot be less than
3.5% of 1 minimum wage and
more than
3.5% of 7 minimum wage - CO = (salary - OPV) * 0.035
- OOSMS — rate 2%.
- Retained at the expense of the employer (does not affect salary in hand)
- Cannot be more than
2% of 10 minimum wages - OOSMS = salary * 0.02
- CH — rate 9.5% for legal entities. 1 MCI per employee for IP (except for simplified individual entrepreneurs - they do not pay SN with employees’ salaries).
- Retained at the expense of the employer (does not affect salary in hand)
- Formula for legal entities An employee’s salary is more than 25 MCI
.
SN payable = (salary - OPV) * 0.095 - CO - The employee's salary is less than 25 MCI
.
SN payable = (salary - OPV - adjustment_90%_according to_IPN) * 0.095 - CO - Formula for individual entrepreneurs SN payable = 1 MCI - SO
What functions does wages perform?
Salary has the following functions:
- motivational;
- reproductive;
- stimulating;
- status;
- production-share;
- regulating.
This function is the main one for an employee, since the salary allows him to satisfy his needs . Without material reward, a person would not waste his time on some kind of work activity.
The reproductive function is closely related to the motivational one, but serves for the benefit of the enterprise: the employee must eat well and be in good physical shape. His family also should not need anything, so that the employee could fully concentrate on his duties.
Sufficient monetary remuneration can increase employee productivity and ensure smooth operation of the company.
This function comes down to the fact that the employee must go to work with the understanding that wages primarily depend on the performance of his work. To do this, the employer must provide the person with work instructions, identify specific achievements and motivate the employee for exceeding them, for example, with a bonus.
Provides salary in accordance with the employee’s qualification level, knowledge and experience. The amount of monetary reward is an indicator of his place in a particular social group. For example, it is for this reason that electricians of different categories will have differences in salaries even with equal hourly output.
Requires the contribution of each employee to be taken into account in the final production costs.
Helps employees and subordinates interact effectively.
