The procedure for paying bonuses under the Labor Code of the Russian Federation in 2020

On October 3, 2020, a law regarding the timing of salary payments came into force. He made important changes to the issue of bonus payments.

From that moment on, the new version of Art. 136 of the Labor Code of the Russian Federation, according to which wages must be paid no later than the 15th day of the next month. It turns out that wages, for example, for December 2020 must be paid no later than January 15, 2020.

If the bonus payment day falls on a weekend or holiday, then wages must be paid no later than the last working day before this weekend or holiday.

Details about the new salary payment deadlines in 2020 can be found on this page. In this publication, we will find out what the deadlines for paying bonuses are in 2020 under the new Wage Law.

Introduction to bonuses

In accordance with current legislation, bonuses are incentive payments that can be made to employees for the proper performance of job duties.

The issue of awarding bonuses is a voluntary decision of the head of the organization or individual entrepreneur. In some cases, bonuses are used to increase the interest of a qualified and/or conscientious employee, regardless of his current work success.

In Art. 135 of the Labor Code of the Russian Federation discloses a general principle for calculating bonuses, providing for the employer’s right to create a bonus system, which is fixed in local acts of individual entrepreneurs or organizations.

In accordance with Art. 129 of the Labor Code of the Russian Federation, bonuses can be included in the salary. In this case, this issue should be reflected in the employment contract or local regulations of the organization.

Thus, the bonus is a full-fledged element of the remuneration system. It follows from this that, simultaneously with changes in the timing of salary payments, the timing of bonus payments is also changing from 2020. Now bonuses must also be paid no later than 15 calendar days from the end of the period for accruing the corresponding bonus.

Deadline for delivery of RSV-1 for 2020 (for the 4th quarter and for the year)

The form is not submitted separately for the last quarter of 2020, although the final report is sometimes mistakenly called DAM 1 for the 4th quarter

. Its correct name is RSV-1 for 2020, since it includes cumulative indicators not only for the last quarter, but also for all reporting quarters of the year. It should be borne in mind that the legislation of the Russian Federation provides: if the end day of the deadline for submitting a report falls on a weekend or holiday, then the day of completion of the deadline is postponed to the next working day that follows it.

A paper copy of the report must be submitted no later than 02/15/2017. For reporting in electronic form, the deadline for submission is slightly extended; it can be submitted no later than 02/20/2017. You must fill out and submit the RSV-1 for free on our website.

Types of awards

This is a fairly extensive question: there are several bases for dividing premiums into types.

Depending on the frequency, it is customary to distinguish the following types of bonuses:

1. One-time. Paid in a lump sum upon the occurrence of an event. For example, after achieving certain work results.

2. Periodic. Paid monthly and quarterly.

3. Annual. Paid once a year.

Depending on the grounds for payment, bonuses are usually divided into two types:

1. Production. Payments are made for the employee’s conscientious performance of his or her job duties or for achieving certain labor results.

2. Non-productive. Not related to performance results. For example, an organization may pay non-production bonuses to parents with many children. They are not included in wages. Therefore, the provisions of the amended Art. 136 of the Labor Code of the Russian Federation do not apply to them. Non-production bonuses can be paid within any period fixed by the employment contract or local regulations.

Now we propose to understand the changes in the timing of payment of bonuses of various types.

Monthly bonuses

In most cases, monthly bonuses are paid based on the results of the month worked. The issuance of a bonus order is usually preceded by an analysis of the employees’ labor efficiency over the past month. Based on the results of this analysis, management makes a decision on paying a bonus to a particular employee.

In accordance with the updated legislation, the time for employers to analyze and think about who to pay a bonus to will be limited. The new deadlines for payment of bonuses from October 2020 are no later than the 15th day of the month following the month worked.

It is already clear that this will create certain difficulties. Especially for those employers who, in the process of analyzing an employee’s work activity, process a large amount of information. Some organizations and individual entrepreneurs pay bonuses to employees after 1–2 months. This is often due to the need to collect various indicators that reflect labor efficiency. In accordance with the new legislation, this is prohibited.

Quarterly bonuses

This type of bonus is fully subject to the provisions of the updated Art. 136 Labor Code of the Russian Federation. This means that from October 3, 2016, quarterly bonuses must be paid no later than the 15th day of the month following the expired quarter.

Annual bonuses

The annual bonus may also be included in the salary. And often its size even exceeds monthly income. Therefore, this is perhaps the most anticipated bonus for employees.

In accordance with the amended Art. 136 of the Labor Code of the Russian Federation, the annual bonus for 2019 must be paid before January 15, 2020.

Perhaps the issue of paying the annual bonus is the most difficult. After all, in just a few days, employers will need to evaluate the performance of their employees for the entire year, calculate and pay them bonuses.

Penalty for late delivery

Penalties are provided for late submission of the RSV-1 form. The minimum fine is 1000 rubles, and the maximum is 30% of the amount of insurance payments accrued over the last 3 months. For each month of delay, the amount of the fine is 5% of the amount of insurance amounts payable. In this case, an incomplete month is rounded up to one whole month.

How to pay bonuses under the new wage law from October 3, 2016? Officials from the Russian Ministry of Labor tried to answer this question. Let's take a closer look at their explanations and find out within what timeframes we now have to pay monthly, quarterly and annual bonuses to employees.

Responsibility for violation of deadlines

The new legislation significantly increases the degree of responsibility of employers for failure to pay wages on time. In particular, administrative fines for individual entrepreneurs, organizations and heads of organizations have increased. The amount of compensation for delayed wages has also doubled.

Due to the fact that bonuses are part of the salary, increased responsibility also applies to them. Moreover, administrative fines can be applied for each employee who receives a bonus late.

Accounting for bonuses under OSNO and simplified tax system in tax expenses

When including bonuses in tax expenses under the simplified tax system and the special tax system, one should be guided by the Tax Code of the Russian Federation, Art. 255 (about labor costs) and 346.6 (about the procedure for determining costs). Taking into account the requirements of the law, the tax base for profit and the single tax is reduced by the costs of bonuses paid to employees.

This option is possible when the employee is assigned bonuses of a production nature, and the fact of bonus payment itself is provided for by the collective and labor agreement. The bonus payment must be formalized by order in accordance with the established form. However, if profit in the event of an actual loss is indicated as the source of bonus payments, then such remunerations are not taken into account in tax expenses.

Reservation for long service gratuity

For the purpose of measured tax accounting, a taxpayer company has the right to create a reserve stock of future expenses for vacations, remuneration for long service and based on the results of work for the year ( Tax Code of the Russian Federation, Article 324.1

).
To this end, the company is initially obliged to:

• record the selected reservation method in the accounting policy;
• set the maximum amount and monthly percentage of contributions for the reserve.

Expenses for the formation of reservations are included in the accounts of accounting expenses for wages. Deductions to an already created reserve are made in the same way in all cases. Estimated information about contributions (their amount) for each month to the formed reserve is reflected by the taxpayer in a special estimate.

At the end of the tax period, an inventory of the reserve is made. If the results show that part of the reserve amount has not been used, then this unused reserve portion is included in non-operating income for income tax. But if the credited funds from the reserve are not enough, then the unaccrued part of the reserve amount is related to income tax expenses for remuneration for the year (on the last day of the year). Accounting in both versions shows all transactions with account assignments:

• DT 20 (23, etc.), CT 96 - contributions to the formed reserve;
• DT 96, CT 70 - transfers for long service to employees;
• DT 20 (23, etc.), CT 96 - restoration of the unused reserve amount / inclusion of an insufficient (missing) reserve amount in expenses.

The company may subsequently refuse to form such a reservation. Then the residual amount as of December 31 in the year of its accrual is included in non-operating income of the current period.

Changes in local acts

In accordance with Art. 136 of the Labor Code of the Russian Federation, the specific date for payment of wages can be established by one of the following documents:

• employment contract;
• collective agreement;
• internal labor regulations;
• bonus regulations.

It follows from this that from the moment the new law comes into force (October 3, 2016), any of these documents must reflect the date on which wages and bonuses are paid (which is part of the salary).

The Ministry of Labor, in its letter b/n dated September 21, 2016, assured that if the local act on bonuses indicates a specific date for payment of bonuses based on the results for a certain period (for example, based on the results of work for the year, the payment of bonuses is carried out on March 12 of the year following the reporting year) , then this will not constitute a violation of the Labor Code of the Russian Federation.

Thus, the best option would be to specify in the Regulations on bonuses specific terms for each type of bonus: monthly, quarterly, annual.

Where to submit RSV-1 for 2020

The electronic form of the RSV-1 report is required to be submitted by payers whose average number of employees for 2020 is 25 people or more. All other payers can provide reporting in one of the ways, at their own discretion: either in paper form or electronically.

The report for 2020, as before, should be submitted to the relevant territorial divisions of the Pension Fund at the location of the enterprise or at the place of residence of the entrepreneur. It should be borne in mind that this is the last time funds will accept reports of this type. From January 1, 2020, the functions of administering insurance pension payments are transferred to the tax authorities, which will subsequently accept reports. At the same time, primary and updated reporting for reporting periods up to 2017 will continue to be provided to the Pension Fund.

Terms for accrual of bonuses

In the Regulations on Bonuses, it is necessary to include a section entitled “Terms for Accrual of Bonuses” and, similar to the deadlines for payment of bonuses, indicate specific dates when bonuses should be accrued. For example:

• the monthly bonus is accrued no later than the 5th day of the month following the last month worked;
• the quarterly bonus is accrued no later than the 10th day of the month following the last worked quarter;
• the annual bonus must be accrued no later than 10 days after the approval of the annual financial statements;
• Non-production bonuses can be accrued and paid at any time. The new bonus payment procedure does not apply to non-production bonuses. Let's clarify this point. The fact is, according to Article 129 of the Labor Code of the Russian Federation, wages are remuneration for work. As mentioned above, bonuses are included in wages. But non-production bonuses (for example, monthly bonuses for employees with children) are not related to the work achievements of these employees. Therefore, non-production bonuses are not part of the salary. That is why the provisions of new Article 136 of the Labor Code of the Russian Federation do not apply to the payment of non-production bonuses. The main thing is to determine in the local act the period for payment of non-production bonuses.

Taxation and accounting of employee bonuses

The specifics of taxation of bonus incentives are largely determined by their type. Remunerations for special production results are included in salaries (expenses for ordinary activities) and can be either one-time or regular (monthly, quarterly, annually). They are included in cost. The employer has an obligation to pay such bonuses, since they are provided for by the payment system.

Non-production incentives are assigned as one-time payments, are not part of the salary, and are taken into account in other expenses for the reporting period. Such incentives are paid only according to the distribution of the head of the organization. When paying bonuses from a stock source based on the owner’s decision, they are attributed to the undistributed (or accumulated, accumulated) profit of previous years.

Thus, production bonuses are paid under agreements (collective, labor) and are associated with production and sales costs. They are economically justified and involve generating income. Conversely, incentives of a non-production nature are not related to the performance of employees’ job duties and tax expenses are not taken into account. According to the Tax Code of Russia, Art. 270, paragraph 21, they are not taken into account when calculating profit in expenses.

Regardless of the taxation regime, the following are calculated for all types of bonuses paid from net profit:

• Personal income tax (13% for tax residents of Russia);
• insurance payments (FSS - 2.0%, PFR - 22%, FFOMS - 5.1%, from accidents - 0.2%).

Taxpayers here are individuals (individual entrepreneurs and citizens, residents of the Russian Federation). These are working people who have income. The bonuses received are part of this income at the place of employment.

Exceptions are presented in the list of the Tax Code of the Russian Federation, Article 217 (clauses 6, 7). This includes awards for outstanding achievements in the field of culture, science, technology, art, etc., as well as for senior officials. These types of income are not subject to taxes.

Sources of payment of bonuses

There are several sources from which it is possible to allocate funds for bonuses to employees:

• accrual of bonuses from profits;
• attributing bonuses to other expenses;
• inclusion of bonuses in the standard costs of the organization's activities.

Bonuses can be included in labor costs if two conditions are met:

• the presence of a local act that clearly outlines the terms of remuneration in the form of bonuses;
• accrual of bonuses based on professional performance results.

The article was edited in accordance with current legislation 09/29/2019

Premiums: what an accountant needs to pay attention to

The prescribed rules and regulations on the procedure for bonuses in local acts and employment contracts of the company are also taken into account. Mostly, this fact brings clarity and transparency to the grounds for applying bonuses and allows one to avoid labor disputes. Any changes (missing information or conditions) are made to the employment contract by separate agreement of the parties. At the same time, legal regulation regarding bonuses is carried out in accordance with the Tax and Labor Codes of the Russian Federation.

Information about incentives can be entered into the employees’ work book. Payments of cash bonuses are processed and made through and by bank transfer.

This might also be useful:

• Application for voluntary resignation
• Sick leave for pregnancy and childbirth
• Compensation for staff reduction

• Calculation of compensation for delayed wages
• Calculation of the average number of employees
• Effective pre-employment tests

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What is the RSV-1 form, explanation

Form RSV 1 (stands for calculation of insurance premiums) was approved by Resolution of the Board of the Pension Fund of the Russian Federation on January 16, 2014 No. 2p. The resolution also regulates the procedure and principles for its preparation. The report is essentially a calculation of accrued and paid contributions for compulsory pension insurance and health insurance. All insurance premium payers are required to prepare this report, regardless of whether they carried out business activities in the reporting period or not. The report consists of a title page and 6 sections. However, not everyone needs to fill out all sections, but only if the relevant indicators are available. Only the title page and sections 1, 2.1 and 6 are required.

RSV-1 is essentially a form that combines 2 types of reporting. It displays personalized accounting information for each insured person. This report is a single document that reflects information on the calculation base, calculation and payment of contributions for compulsory insurance.

The report is required to be submitted by all enterprises, organizations and their branches, separate divisions (having a separate balance sheet and current account) from the moment of creation. Individuals who are individual entrepreneurs, lawyers, private notaries and detectives must report when hiring employees. If an entrepreneur does not have employees and is not registered with the Pension Fund as an insurer, he does not need to submit a RSV 1 report.

Answers to frequently asked questions from readers

Question #1:

Is income tax levied on bonuses paid when terminating an employee?

Question #2:

Are insurance fees for occupational diseases, etc., calculated from premiums (from net profit), taken into account when calculating income tax?

Yes, they can be taken into account by including them in other expenses associated with sales and production ( Tax Code of the Russian Federation, Article 264, paragraph 1, paragraph 45

).

Question #3:

Do I need to pay tax on one-time bonuses in 2020?

Any bonuses are part of the employee’s income. Accordingly, income tax and insurance fees (PFR, Social Insurance Fund, Compulsory Medical Insurance Fund) should be deducted from them. This rule invariably applies to all types of bonuses in 2020. Taxes are not calculated on certain types of income listed in Art. 217 Tax Code of the Russian Federation.

Question #4:

Which entry shows the transfer of bonuses paid from the net profit of previous years?

DT 91-2, CT 70 - crediting incentive payments from net profit. Account assignment is valid for any profit (previous years, current quarter, month, year, etc.). These are other expenses that affect the financial outcome of the company, so they are shown according to DT 91-2.

Question #5:

Do bonuses for professional holidays and anniversaries reduce the tax base?

These are non-production bonuses that have no connection with the fulfillment of employees’ labor obligations. The Unified Agricultural Tax and contributions to the Pension Fund are not withheld from such bonuses ( Article 236 of the Tax Code of the Russian Federation

).
They do not reduce the tax base for profits ( Tax Code of the Russian Federation, Article 270, paragraph 21
).

Many organizations pay bonuses to their employees. As a rule, the amount of such payment depends on the employee’s salary, the duration of his work during the year, and the size of the organization’s revenue.

The Labor Code of the Russian Federation does not limit the employer in the choice of possible types of incentives for employees. Therefore, organizations have the right to independently establish the grounds, conditions, procedure for making and calculating the specified payment.

For example, an annual bonus is an incentive payment because it is aimed at increasing employee motivation and rewarding them. Consequently, it can be taken into account in labor costs on the basis of clause 2 of Article 255 of the Tax Code of the Russian Federation.

However, the following conditions must be met:

1. Payment of bonuses based on the results of the year must be provided for in the labor and (or) collective agreement (paragraph 1 of Article 255 of the Tax Code of the Russian Federation). It is also possible to consolidate the corresponding provisions in another local regulatory act (for example, in the regulation on bonus payments to employees), a link to which should be contained in the specified agreements.

2. The employer’s expenses for paying the annual bonus must be economically justified and documented (clause 1 of Article 252 of the Tax Code of the Russian Federation).

This means that the size of the bonus must be adequate to the salary of each employee being awarded and the real financial situation of the organization. There should also be a calculation of bonuses assigned to employees. In addition, the payment of the bonus must be documented in primary accounting documents. For this purpose, an order (instruction) of the head of the organization is used to reward the employee (unified forms N T-11 and N T-11a, approved by Resolution of the State Statistics Committee of Russia dated January 5, 2004 N 1 “On approval of unified forms of primary accounting documentation for recording labor and its payment” ). The presence of these documents is mandatory to document premium expenses.

3. The bonus should not be paid from the organization’s net profit, special-purpose funds or earmarked proceeds. Payments from these sources are not taken into account for tax purposes (clauses 1, 22, Article 270 of the Tax Code of the Russian Federation).

If the specified conditions are met, the organization has the right to take into account the costs of paying annual bonuses as part of labor costs on the basis of clause 2 of Article 255 of the Tax Code of the Russian Federation.

With cash method

labor costs are taken into account as expenses at the time of debt repayment by writing off funds from the taxpayer’s current account, payments from the cash register (

One-time (one-time) bonuses are paid not for a certain period, but upon the occurrence of a specific event (successful completion of a project, anniversary, etc.).

An organization may provide for the payment of one-time bonuses in its internal documents:

• employment contract (paragraph 5, part 2, article 57 of the Labor Code of the Russian Federation);
• collective agreement (part 2 of article 135 of the Labor Code of the Russian Federation);
• a separate local document of the organization (Regulations on remuneration, Regulations on bonuses, etc.) (Part 2 of Article 135, Article 8 of the Labor Code of the Russian Federation).

In this case, a one-time bonus may be an integral part of the remuneration system. Accordingly, one-time bonuses for production results can be taken into account with average earnings.

However, one-time bonuses may not be part of the organization’s remuneration system and are assigned only by order (order)

The basis for accrual of any one-time bonus is the manager’s order to reward the employee. The order is signed by the head of the organization. The employee(s) must be familiarized with the order against signature.

The procedure for reflecting one-time bonuses in accounting depends on the sources from which they are paid:

• due to expenses for ordinary activities;
• at the expense of other expenses.

Who is entitled to

Some positions that are eligible for a bonus.

Not all organizations reward their employees with a thirteenth salary. Which employees are entitled to a bonus?

To find out who should receive money and who should not, it is recommended to refer to the relevant documentation, which regulates data on bonuses.

If the bonus is confirmed by the management of the enterprise and the employee’s details are indicated, then you can find out why it was awarded.

It is rare to find such incentive payments in private firms. Most of the institutions that charge them belong to the public sector.

Professions of a budgetary nature are poorly paid, and therefore, the thirteenth salary significantly compensates for this shortcoming. The bonus is paid to the following employees:

• military personnel;
• medical workers of public clinics;
• Teaching staff of educational organizations in the public sector;
• Employees of municipal transport companies.

In private companies, payouts are focused on the individuals who directly control the year's profitability. It is inappropriate to award bonuses to service personnel.

In the manufacturing sector, employees who produce goods are rewarded; in the sales sector, employees, sales managers and operators who expand the customer base are rewarded.