What are insurance premiums and what are they?
Insurance works like this: a person decides to take out a policy, pays money – one-time or periodically, and when an insured event occurs, he receives the compensation prescribed by the contract. But this is not always a voluntary procedure.
In Russia there are several types of compulsory insurance contributions, which are sent:
- for pension insurance – a pension is subsequently formed from these payments;
- for health insurance – these payments allow you to be examined and treated under the compulsory medical insurance policy;
- for social insurance – to receive money for sick leave or in connection with maternity (contrary to misconceptions, the employer does not pay maternity leave from his own pocket);
- for insurance against industrial accidents and occupational diseases.
These measures are designed to protect citizens when they find themselves in difficult situations and economically vulnerable situations.
Previously, these contributions existed as separate ones and had to be paid independently of each other. However, now they are combined into a single tariff. Then the Social Fund of Russia (SFR), which is now involved in this, will sort it out itself.
Who pays insurance premiums
Organizations and entrepreneurs must pay insurance premiums for employed individuals. Moreover, this applies to both employees under employment contracts and contractors, if they are not registered as individual entrepreneurs, with some nuances. As part of a civil law agreement, contributions to the SFR are not charged, and the need for payments for injuries depends on whether this is provided for in the document.
Individual entrepreneurs, as well as lawyers, notaries and other persons engaged in private practice, must pay contributions for compulsory health insurance for themselves.
How are insurance premiums calculated?
Depending on for whom the individual entrepreneur pays insurance premiums, the calculations have their own nuances.
For employees
Contributions are calculated based on the employee’s income. The basis for calculations consists of salaries, bonuses, allowances, and vacation pay. Contributions are not credited:
- for financial assistance in the amount of less than 4,000 rubles;
- compensation for harm to health;
- payment of the cost of the due allowance in kind;
- reimbursement of expenses for professional retraining or advanced training;
- compensation for reduction of company staff;
- financial assistance to employees in connection with the death of their family members or the birth of children (but not more than 50,000 rubles per child);
- cost of uniforms.
Amount of contributions for employees amounts to:
- 30% until the income from which they are calculated reaches the maximum amount (in 2024 – 2,225,000 rubles);
- 15.1% – from excess.
In addition, depending on the company’s activities, contributions for injuries may be added – 0.2–8.5%. And there is more additional amounts, which must be paid for those who work in hazardous conditions. The rate is 2–8% if working conditions are found to be harmful or dangerous as a result of a special assessment. If such a procedure was not carried out, then it is 6% or 9%, depending on the type of work.
For comparison, it used to look like this:
- for compulsory pension insurance – 22% (for harmful and dangerous working conditions provided additional tariff);
- for compulsory health insurance – 5.1% (1.8% for foreigners and stateless persons temporarily staying in the Russian Federation);
- for compulsory social insurance (in case of illness or in connection with maternity) – 2.9%;
- for insurance against industrial accidents and occupational diseases – 0.2–8.5% in dependencies depending on the employee’s professional risk class.
That is, in the end it turns out about the same, it’s just now a single contribution, and not several separate ones. And the calculations have become much simpler.
Let’s say an employee is paid a salary of 80 thousand rubles per month. The contribution all year round will be 24 thousand rubles. If a person receives 190 thousand a month, then from 2,225,000 you will need to pay 30%, or 667,500 rubles, and from the balance of 55 thousand – 15.1%, or 8,305 rubles.
To myself
Individual entrepreneurs and private practice owners too Must do a single contribution, which then goes towards pension and health insurance.
The mandatory payment is 49,500 rubles. If an entrepreneur’s annual income exceeds 300 thousand, then the individual entrepreneur must pay an additional 1% of the difference, but not more than 277,571 rubles.
That is, if a businessman’s annual income is 900 thousand rubles, he must transfer 49,500 rubles and 1% of 600 thousand (6 thousand rubles) – a total of 55,500 rubles.
It is mandatory to pay insurance premiums even if you have zero income. Exemption can be obtained by entrepreneurs and private practice owners who do not work because:
- undergo military service upon conscription;
- are caring for a child under 1.5 years old, or a person with a first group disability, or a child with a disability, or a person over 80 years old;
- followed a military spouse to an area where there is no opportunity to find a job;
- are abroad due to their spouse’s work at a diplomatic mission, consular office of the Russian Federation or an international organization (list of the latter is installed government).
In order to legally avoid paying insurance premiums, these categories of persons need to submit an application and documents confirming the corresponding right to the tax office.
How to reduce your insurance premiums
There are very long list of payers, which may apply reduced insurance premium rates. Among them, for example, are small businesses, IT companies, and Skolkovo residents.
Reduced rates may vary. Thus, small businesses pay 30% of the minimum wage at the general tariff on an employee’s income, and 15% on excess wages. Socially oriented non-profit organizations using a simplified taxation system can contribute 7.6% of employee salaries until the amounts exceed the established threshold of 2,225,000 rubles, and pay nothing from the remainder.
Therefore, it is worth studying the list carefully. You might be able to find your company there.
When and where are insurance premiums paid?
Clear deadlines have been set.
For employees
The single insurance premium must be transferred to the tax office by the 28th day of the month following the one in which the person received the payments. Contributions for injuries – directly to the accounts of the SFR until the 15th of the next month.
To myself
Fixed amounts must be transferred to the tax office before December 31 of the current year. But since December 31 is a day off in 2024, the permissible period is extended until January 9, 2025. Contributions to pension insurance from income exceeding 300 thousand rubles must be made before July 1 of the next year.
How and when to report payment of insurance premiums
You do not need to report deductions for yourself. Those who have employees will have to deal with three documents.
1. EFS-1
The entire name of the form sounds like “EFS-1. Information for maintaining individual (personalized) records and information on accrued insurance contributions for compulsory social insurance against industrial accidents and occupational diseases.” This document must be submitted to the Social Fund of Russia no later than the 25th day of the month following the reporting period. This includes data on length of service, salary, and calculated contributions.
2. Calculation of insurance premiums (DAM)
This document must be submitted to the tax office quarterly no later than the 25th day of the month following the reporting period. Summary data on insurance premiums is provided here. If there are less than 10 employees, the DAM can be submitted on paper or electronically; with a larger staff, only the second option is suitable.
3. Personalized information about individuals
The document must be submitted to the tax office no later than the 25th day of the next month for all insured persons. But only for the first and second months of the quarter. In the third one, the RSV is rented out; all the necessary information is there.
This article was published on October 24, 2019. In March 2024, we updated the text.
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