Is the New Year bonus for employees not subject to insurance contributions?

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Many enterprises have bonus payments to create additional incentives for employees. Typically, bonus regulations or other similar regulations are developed to determine the procedure for payments and accrual of funds.

But many are still interested in the question of taxation of this part. It is worth understanding in more detail the applicable schemes for paying insurance premiums from premiums.

Are bonuses taxable?

It is easier to answer the question if you understand the very concept of the award and its essence from the very beginning.

The name of the bonus was given to a payment to an employee of a stimulating, incentive nature. It is assigned to those who most successfully cope with their responsibilities. Often the rules require the payment of bonuses for certain events.

The inclusion of bonuses in salary is not a mandatory requirement. But Articles 191 and 121 of the Labor Code of the Russian Federation give this right to employers. Therefore, in practice, such solutions occur quite often.

Thanks to this approach, two problems are solved at once:

• It influences the interest of employees in doing better work.
• Due to the bonus part, the amount of labor costs is regulated by the costs that are taken into account in accounting documents.

The bonuses themselves can have two sources for payment:

• Costs - if bonuses are awarded due to labor achievements.
• Net profit - when payments are related to certain events, and not to the results of work.

Attention! The source does not affect whether bonuses can be included in wages. Company management always has this right.

But it is still classified as the employee’s income, even if one of the following conditions is met:

• Payment from profits.
• One-time character.
• Inclusion in the incentive part of remuneration.

Based on this statement, the application of the taxation system is determined.

Insurance premiums are calculated on the same day when the premium is transferred according to accounting. The moment of direct payment to employees does not matter. The issuance of an award order is also not taken into account.

Is the premium subject to insurance premiums: the basis for calculating insurance premiums

The laws define the maximum limit of amounts subject to insurance premiums. At the moment these are the following values:

1. To collect contributions to the Pension Fund: 796 thousand rubles;
2. For contributions to the Social Insurance Fund: 718 thousand rubles;
3. There are no limits set for health insurance contributions.

When the amount of cash receipts in favor of an employee of an enterprise (including any types of bonus payments) exceeds these numbers, the excess amounts are deducted from the accounting base for contributions to the Social Insurance Fund and continue to be subject to contributions to the Pension Fund, but at a reduced rate of 10%. When transferring contributions, the documents indicate the full amounts, down to kopecks.

What payments do not need to be deducted from?

Such payments exist, usually in the following situations:

• If there is a connection with holidays. For example, for a holiday, all staff are given the same amounts. Then it is believed that the results of labor will not be taken into account. The taxation application will depend on the name of the remuneration. For example, if we are talking about gifts, then you do not need to pay taxes. But here they rely on the conditions of Article 574 of the Code of Civil Procedure. This helps to properly document payments.
• Financial assistance at any time, as long as it does not exceed 4,000 rubles per year for each individual employee.

Reference! Such schemes are considered legal and do not violate current legislation. But there is no need to get carried away with transferring money only in the form of gifts. In any case, this will raise additional questions for regulatory authorities.

Taxation of one-time premium contributions

If a one-time bonus was awarded to individual employees, or it was issued to all employees, but not equally, it will be subject to insurance premiums. The same applies to one-time payments that are not formalized as a gift by signing a gift agreement.

Regardless of whether the bonus is mentioned in the employment agreement, and which organization chooses the taxation system, the amount of the bonus must be subject to contributions for social, pension and health insurance.

Calculation rules using an example

For example, the second quarter has ended. Management decided to reward employees for their success in trading. 120,000 rubles – the total amount of transfers related to this area.

Contributions are calculated as follows:

• Social payments: the amount is multiplied by 2.9%. Result – 3480 rubles.
• Pension payments require multiplication with 22%. The result is 26,400.
• Medical payments at a rate of 5.1%. They pay 6120.
• Injuries with a coefficient of 0.2% of the amount. It turns out 240 rubles.

Typical entries with postings will look like this:

• After settlements with staff for bonus payments - D 70 K 50 (51).
• D 20 (44, 26, 91, 25) K 69 – confirmation that contributions have been transferred.
• D 70 K 68 - this is necessary to record the fact that income tax has been withheld from wages.
• D 20 (44, 26, 91, 25) L 70 – so that the report makes it clear that the bonus has been awarded.

Accounting for taxation of premiums by insurance contributions: entries

Let's take a closer look at the accounting for the taxation of premiums by insurance contributions:

Accounting entries:

1. Calculation of insurance premiums, deduction of insurance payments from accidents and occupational diseases from the premium

DEBIT 91-2 CREDIT 69-1

1. Calculation of contributions to extra-budgetary funds, deduction of payments to the pension fund, social insurance fund and health insurance fund

DEBIT 08(91-2) CREDIT 69-1(69-2, 69-3)

Important nuances in accounting

There are only some situations where premium contributions are considered legal and justified. For example, employees are paid a one-time remuneration due to the fact that 50 years have passed since the founding of the enterprise. The organization did not pay insurance premiums for the costs incurred. The tax office assessed additional contributions because it considered such a decision to be unfounded. The management did not agree and filed a lawsuit.

After studying the case materials, the following circumstances were established:

1. Payments applied only to current employees. She was not associated with former subordinates and those who were on maternity leave.
2. In the order, the directors determined the size of the bonus separately. The determining factors for the result were the quality and quantity of work performed, and the qualifications of the subordinate.
3. The anniversary bonus was not mentioned in the collective agreements that were formalized earlier.

Therefore, the court came to the conclusion that the insurance premiums were legal, because the payments were directly related to the results of work. One of the Resolutions directly states that the nature of the premium paid must be taken into account when the court makes an appropriate decision.

It is necessary to look at whether the awards fall within the scope of the following articles of the Labor Code of the Russian Federation:

• 15;
• 16;
• 56;
• 57;
• 129;
• 135;
• 191.

Such amounts are taken into account in expenses when taxing profits, the same applies to calculations with average earnings - for example, when determining vacation payments.

For contributors, risks can be reduced if the following conditions are met:

• Holiday bonuses apply to all employees, not just a specific group.
• The length of service, position, and salary of subordinates do not affect the final figures.
• Employment contracts do not include provisions for bonuses that are not employment benefits.

Important! The amount of gifts is determined on an accrual basis from the beginning of the year; this rule is applied for each employee. Sometimes in a household, gifts become part of the salary. Then, refusing to apply insurance premiums can be a risky decision. You need to carefully look at who and for what reason gifts are given, especially if it concerns valuable things.

What the Tax and Labor Codes of the Russian Federation say

The Labor Code provides for the right to monetary incentives for employees (paragraph 4, paragraph 1, article 22 of the Labor Code of the Russian Federation, paragraph 1, article 191 of the Labor Code of the Russian Federation). The consolidation of the bonus regime in local documents is reflected in clause 2 of Art. 191 Labor Code of the Russian Federation, paragraph 2 of Art. 191 Labor Code of the Russian Federation. Finally, the possibility of accounting for these payments as part of remuneration for labor or another form of incentives is given in Art. 135 Labor Code of the Russian Federation.

Tax legislation regulates the payment of bonuses to employees as part of the company's profit expenses. Art. 25 of the Tax Code of the Russian Federation lists the purposes for which these funds can be used, and Art. 225 of the Tax Code of the Russian Federation approves a reduction of the tax base by this amount.

Prerequisites for including bonus expenses in labor costs:

• the bonus should be assigned and paid exclusively for achievements related to the employee’s professional employment;
• the conditions for receiving a bonus and the possibility of depreciation must be clearly regulated in the collective agreement or employment contracts of employees (you can make a reference to the Regulations on Bonuses in these documents), indicating the procedure for accrual and specific amounts.

If the paid bonus does not meet these conditions, then the Tax Code refers it to Art. 270, which speaks of the employer’s right to award staff remuneration for achievements that are not related to the employment contract and are not noted in it. Moreover, funds for their payment are taken not from the wage fund, but from target funds, special purpose funds or net profit at the end of the year (Letter of the Ministry of Finance of the Russian Federation dated October 19, 2007 No. 03-03-06/1/726).

Taxes on bonuses not provided for by local acts of the organization

The second group of payments that can be accrued to employees includes one-time bonuses not provided for in the Regulations on bonuses or the collective agreement (employment contract). This is an essential condition that allows you to include bonuses in labor expenses and reduce the employer’s tax base. If it is not met, then the payment falls under a fundamentally different taxation system.

This type of bonuses is assigned on the basis of a management order (order), which in the usual manner must be familiarized with the signature of the employees named in it.

The accounting reflection of these payments will be different depending on the source of funds for their accrual:

• expenses for ordinary activities;
• other expenses.

What if we regulate these payments?

To reduce the tax base, entrepreneurs can take into account irregular payments in local acts. For example, in the documents you can indicate regular bonus payments to employees on March 8 or the New Year, upon reaching an anniversary date, etc. Such bonuses cannot be called production bonuses, but with a certain “favor” of the tax authorities, they can be justified as stimulating.

Even in such a situation, personal income tax and mandatory insurance contributions are charged on the amounts of these payments.

However, by law, one-time bonuses that are not assigned for labor performance cannot be included in profit expenses, so the risk of a legal dispute with tax authorities with an unknown outcome cannot be excluded.

ADVICE FOR EMPLOYERS. In order to avoid tax risk, the maximum number of payments to employees must be regulated as payment for labor, correctly substantiating this in the employment (collective) agreement and/or Regulations on bonuses. You can include in these documents the convenient wording “The employer reserves the right to reward the employee at its discretion.”