Tax disputes - is compensation for delayed wages subject to insurance premiums?

Compensation for delayed payment of wages under the Labor Code of the Russian Federation

In times of crisis, many Russian companies, often small businesses, are increasingly delaying wages (hereinafter referred to as wages) to their employees.
In most cases, this is not the fault of the company: each of them is a link in a dependent chain of counterparties. Consequently, as soon as payment interruptions (payment under contracts from customers/purchasers are not received on time) occur in one link, this automatically affects all subsequent ones. As a result, this may lead to the fact that employees of one, or perhaps several levels, will not receive salaries on time. If this happens and the employees do not receive the wages due to them on time, then the employing company will subsequently be obliged to pay the employees not only their wages, but also compensation (which in its content represents interest on late payments). This is stated in Art. 236 Labor Code of the Russian Federation.

IMPORTANT! Failure to pay wages on time, among other things, gives the employee the right to temporarily suspend the performance of his labor functions, as well as apply for compensation for moral damage (Articles 142, 237 of the Labor Code of the Russian Federation).

Compensation for late payment of wages is accrued from the day following the established payment deadline until the day the employer repays the debt to employees, inclusive.

Example 1

If the salary, for example, was supposed to be paid on the 5th, but was actually paid on the 12th, then the compensation will be calculated for 7 days (from the 6th to the 12th inclusive).

If a delay did occur, the employing company will have to pay the employee appropriate compensation, regardless of whether it is directly to blame for the delay in the salary or not.

NOTE! Today, the situation is especially relevant when, due to the revocation of the license, the bank did not transfer the salary to the employees of the organization - the payroll client. This circumstance does not relieve the employer of the risk of falling under Art. 236 of the Labor Code of the Russian Federation, since the fact of guilt does not matter. Therefore, in order to minimize this risk, the company should more carefully select a bank for its salary project.

Moreover, if, for example, the bank is to blame for the delay (in particular, it did not fulfill the payment order of the client organization on time to transfer the salary to employees), then the company should remember that it has the right to make a recourse claim to the bank for the fact that it did not timely transferred the salary to the employees, which means he violated the terms of the salary project with the company. However, you will still need to pay workers' compensation first.

Calculation of monetary compensation for delayed wages

The Labor Code of the Russian Federation does not establish in what specific amount the company must pay compensation to employees for delays in wages. The legislator gave organizations the right to independently determine this in a collective agreement.

At the same time, the lower limit of compensation has been determined - not less than 1/150 of the key rate for the period of delay in the salary, calculated for each day of delay:

MRK = ZPnach × Kl.St. / 150 × Dpr,

where: MRK is the minimum that the employer is obliged to pay to the employee for a delay in salary;

ZPnach - the amount of wages that should have been paid to the employee on a strictly established day (minus personal income tax);

Class.St. — refinancing rate (key rate) of the Central Bank of the Russian Federation for the period of delay;

DPR - the number of days for which the employer was late in paying employees wages.

In the collective agreement, the company can only increase the amount of compensation for delay; the organization does not have the right to set it in a smaller amount than according to the above formula.

IMPORTANT! For information on the size of the key rate (refinancing rate), see here.

Example 2

Salary in the company is paid, according to the collective agreement, on the 5th (for the second half of the previous month) and the 20th (for the first half of the current month) of the month. The collective agreement does not contain special provisions regarding compensation for late wages.

For the first half of February, the employee was accrued salary in the amount of 30,000 rubles. However, it was actually paid only on March 6.

The refinancing rate in force during the period under review (conditionally) was 7.5%.

Under these conditions, the organization should pay the employee on March 6, in addition to the salary, also compensation for delay for 15 calendar days in the minimum amount:

MRC = 30,000 × (100% – 13%) × 7.5% / 150 × 15 = 195.75 (rub.)

However, it is not enough to simply correctly calculate the amount of compensation for late salary payments. It is also important for an organization to clearly know whether personal income tax should be withheld from such compensation, whether insurance premiums should be charged and paid for such an amount, and what to do with expenses for profit tax purposes.

Compensation calculation

Calculate compensation for delayed wages using the formula:

An example of calculating compensation for delayed wages. The amount of compensation is established in the collective agreement

The collective agreement adopted by the organization establishes the following terms for payment of wages:

• On the 20th – an advance of 40 percent of the salary;
• 5th – final payment.

According to the collective agreement, compensation for delayed wages is 0.06 percent for each day of delay.

The organization paid the final payment for December 2015, as well as the entire salary amount for January 2021, on February 16, 2016.

The amounts owed and the delay period were:

• 300,000 rub. (final payment for December 2015) – 47 days (from January 1 to February 16, 2021 (January 1–8, 2021 are holidays, so salaries for December must be paid on December 31, 2015));
• 250,000 rub. (advance payment for January 2021) – 27 days (from January 21 to February 16, 2021);
• 300,000 rub. (final calculation for January 2021) – 11 days (from February 6 to February 16, 2021).

Along with the arrears of wages, the organization paid compensation for the delay. The amount of compensation was: 300,000 rubles. × 47 days × 0.06% + 250,000 rub. × 27 days × 0.06% + 300,000 rub. × 11 days × 0.06% = 14,490 rub.

Situation: how to calculate the amount of debt owed to an employee, with which compensation must be paid for delayed payment of wages - taking into account personal income tax or without taking into account?

Determine the amount of wage arrears from which compensation is calculated without taking into account personal income tax.

When paying wages, the organization is obliged to withhold personal income tax from it, which means it should not pay it to the employee (clause 4 of article 226 of the Tax Code of the Russian Federation). Personal income tax is not part of unpaid wages. And compensation for the delay must be calculated based on the actual amount of the debt (Article 236 of the Labor Code of the Russian Federation).

Situation: how to calculate compensation for delayed wages if the refinancing rate changed several times during the period of delay? According to the collective (labor) agreement, compensation is calculated based on the refinancing rate.

Calculate the amount of compensation, taking into account all changes in the refinancing rate. Divide the period of late payment of wages into periods in which different refinancing rates were in effect and calculate compensation for each of these periods. This conclusion follows from the literal interpretation of Article 236 of the Labor Code of the Russian Federation. It says that the amount of compensation for delayed wages is not less than one three hundredth of the refinancing rate in force at that time (i.e., during the period of delay).

An example of calculating compensation for delayed wages. The amount of compensation is not established by the collective (employment) agreement

The collective agreement adopted by the organization establishes the following terms for payment of wages:

• On the 20th – an advance of 40 percent of the salary;
• 5th – final payment.

The organization paid the final payment for December 2015, as well as the entire salary amount for January 2021, on February 26, 2016.

The amounts owed and the delay period were:

• 300,000 rub. (final payment for December 2015) – 57 days (from January 1 to February 26, 2021 (January 1–8, 2021 are holidays, so salaries for December must be paid on December 31, 2015));
• 250,000 rub. (advance payment for January 2021) – 37 days – from January 21 to February 26, 2021;
• 300,000 rub. (final calculation for January 2021) – 21 days – from February 6 to February 26, 2021.

Along with the arrears of wages, the organization paid compensation for the delay. Its size is not established in the collective agreement, so the calculation is made based on 1/300 of the refinancing rate, which is 11 percent.

Therefore, the amount of compensation was:

– for late wages for December 2015: 6270 rubles. (RUB 300,000 × 57 days × 1/300 × 11%);

– for late advance payment for January 2021: RUB 3,391.67. (RUB 250,000 × 37 days × 1/300 × 11%);

– for late wages for January 2021: 2310 rubles. (RUB 300,000 × 21 days × 1/300 × 11%).

The total amount of compensation was 11,971.67 rubles. (6270 rubles + 3391.67 rubles + 2310 rubles).

Personal income tax on compensation for late payment of wages

On the one hand, the Tax Code of the Russian Federation establishes that it is not necessary to pay personal income tax to the budget on compensation if it must be paid to an employee due, in particular, to the performance of labor functions in the company (clause 3 of Article 217 of the Tax Code of the Russian Federation).

On the other hand, the Labor Code of the Russian Federation limits the scope for establishing a specific amount of compensation to a minimum limit. The upper limit is not standardized. Consequently, the employer can set arbitrarily high compensation by fixing it in the collective agreement.

The question arises: will the amount of compensation be subject to personal income tax (both in terms of the minimum and in terms of exceeding the minimum under the Labor Code of the Russian Federation)?

Regarding the minimum amount of compensation, the answer is transparent: it will not be subject to personal income tax. This has been confirmed more than once by the regulatory authorities in their explanations (letters of the Federal Tax Service of the Russian Federation dated 06/04/2013 No. ED-4-3 / [email protected] , Ministry of Finance of the Russian Federation dated 02/28/2017 No. 03-04-05/11096, 01/23/2013 No. 03- 04-05/4-54, etc.).

In the case of exceeding the minimum allowable amount, controllers take a similar position: the amount of excess is not subject to personal income tax, but only if such excess is consistent with an employment or collective agreement (letter of the Ministry of Finance of the Russian Federation dated November 28, 2008 No. 03-04-05-01/450, dated 06.08 .2007 No. 03-04-05-01/261).

NOTE! If a company abuses this exemption and, under the guise of compensation, pays, for example, the salary itself to employees, then this is fraught with disputes with inspectors and additional personal income tax amounts being assessed during the inspection. In this case, the court will most likely side with the inspectors, since content has priority over form: regular payments of compensation in an amount significantly exceeding the amount of wages accrued to employees prove that wages were actually paid. This means that it is necessary to pay personal income tax (resolution of the Federal Antimonopoly Service of the Ural District dated November 30, 2012 No. F09-11655/12 in case No. A60-7589/2012).

Whether it is necessary to accrue personal income tax when paying other compensation payments, read the materials in the section “Compensation and personal income tax” .

Personal income tax

All types of compensation payments established by the current legislation of the Russian Federation (within the limits established in accordance with the legislation of the Russian Federation) related to the performance of labor duties by the taxpayer are not subject to personal income tax (clause 3 of Article 217 of the Tax Code of the Russian Federation).

Such compensation payments also include payment of compensation if the employer violates the established deadline for payment of wages. The application of this norm to the amounts paid does not cause any complaints from inspectors (see letter of the Ministry of Finance dated February 28, 2017 No. 03-04-05/11096). Moreover, even compensation for delayed wages, paid in an increased amount (see letter of the Ministry of Finance dated November 28, 2008 No. 03-04-05-01/450).

Insurance premiums for payment of compensation for late wages

If a company pays personal income tax as a tax agent, that is, at the expense of an employee, then the burden of insurance premiums falls directly on the organization.

So, is interest on late payments subject to insurance premiums? There are two points of view on this issue.

One is that amounts of monetary compensation for violation by the employer of the established payment deadline are not subject to inclusion in the base for calculating insurance premiums. This conclusion was reached, for example, by the judges of the Arbitration Court of the Far Eastern District dated December 21, 2017 No. F03-4860/2017 in case No. A73-2697/2017 (the decision of the Supreme Court of the Russian Federation dated May 7, 2018 No. 303-KG18-4287 refused to transfer the case to the court Collegium for Economic Disputes).

The arbitrators motivated their decision by the fact that compensation for late payment of wages is not remuneration, but a type of financial liability of the employer to the employee, which is paid by force of law to an individual in connection with the performance of his labor duties, providing additional protection of the employee’s labor rights. For this reason, compensation for late payment of wages is not subject to insurance contributions on the basis of subclause. “and” clause 2, part 1, art. 9 of Law No. 212-FZ (since January 1, 2017, similar provisions are given in paragraph 2 of Article 422 of the Tax Code of the Russian Federation).

See also “Compensation for non-payment of wages on time: contributions”.

Another point of view is that the types of payments not subject to insurance premiums are listed in Art. 422 of the Tax Code of the Russian Federation. Compensation for late payment of wages in Art. 422 of the Tax Code of the Russian Federation is not given, therefore, contributions must be calculated from this payment. This position is adhered to by the Ministry of Finance of the Russian Federation in letter dated March 21, 2017 No. 03-15-06/16239.

As you can see, this issue is controversial. And it's up to you to decide.

Insurance contributions from wages

The procedure for calculating insurance premiums is established by Chapter 34 of the Tax Code of the Russian Federation. The administration of these payments was transferred to the tax authorities starting from 01/01/2017. Previously, social insurance fees were controlled by off-budget funds: the Pension Fund, the Social Insurance Fund and the Compulsory Medical Insurance Fund, and the rules were established by Federal Law No. 212-FZ.

Insurance premiums are levied on employees within the framework of employment relationships, as well as under civil law and copyright contracts.

Social contribution rates for 2021 are established in Article 426 of the Tax Code of the Russian Federation.

Insurance premiums are calculated monthly and paid by the 15th day of the month following the billing month. If the day of transfer falls on a weekend, then the deadline for payment is postponed to the next first working day (Clause 7, Article 6.1 of the Tax Code of the Russian Federation).

In addition to the insurance premiums established by the Tax Code, all companies pay tax on insurance against industrial accidents and occupational diseases. They go to the Social Insurance Fund, in accordance with Federal Law No. 125-FZ dated July 24, 1998. The tariff rate can vary from 0.2 to 8.5% depending on the profit class of the company’s type of activity.

Accounting for compensation for late wages in income tax expenses

Regarding income tax, the situation is somewhat more complicated. The Tax Code of the Russian Federation does not contain any provisions regarding whether such compensation can be taken into account as expenses or not.

The code only says that a company can include in its expenses compensation, the payment of which to employees is related to any working conditions (Article 255 of the Tax Code of the Russian Federation).

In addition, paragraph 13 of Art. 265 of the Tax Code of the Russian Federation allows sanctions for violation of contracts to be taken into account in expenses. However, no restrictions or sanctions have been established. There are also no special conditions regarding whether this rule applies only to civil contracts or to employment contracts as well.

Therefore, on the one hand, it is possible to consider compensation for the delay of the PO as a sanction and take it into account as part of the expenses. Previously, the courts agreed with this logic (resolutions of the Federal Antimonopoly Service of the Volga District dated August 30, 2010 in case No. A55-35672/2009).

At the same time, later the regulatory authorities took the position that such compensation cannot be included in expenses, since it is not related to working conditions (Article 255 of the Tax Code of the Russian Federation does not apply), and the norms of Art. 265 of the Tax Code of the Russian Federation does not apply to this compensation (letter of the Ministry of Finance of the Russian Federation dated October 31, 2011 No. 03-03-06/2/164).

Therefore, today it is quite risky to take into account compensation for delays in salary payments in expenses.

Procedure for paying compensation for delayed wages

The mechanism for documenting payment for delays in the Labor Code of the Russian Federation has not been established.

Therefore, a company can, for example, provide in a local regulatory legal act that when paying compensation, an order is issued from the manager (for personnel). It is compiled in any form. However, such an order should indicate that compensation is paid specifically for the delay in payment of the salary, and also indicate the period of delay.

NOTE! Such an order must be brought to the attention of the employee under his personal signature.

Taxation of penalties for non-payment of wages

Almost all income received by an employee from an employer is subject to personal income tax and insurance contributions. Is it necessary to charge and withhold these taxes from accrued compensation in the event of non-payment of wages?

To understand the taxation of compensation for delayed payment of wages, you need to carefully study some articles of the Tax Code.

Calculate the amount of compensation using an online calculator.

Results

Calculating compensation for delayed wages is not a difficult task for an accountant, since the calculation formula is directly provided for in the Labor Code of the Russian Federation and does not require any complex data and calculations.
It is enough to know the size of the overdue salary, as well as the current refinancing rate. Employees should understand that they can count on such compensation in any case, even if the employer is not to blame for the delay. It is important for the company not to forget that personal income tax may not be charged on the amount of compensation, but insurance premiums will have to be paid. In relation to income tax, it will most likely not be possible to include compensation as expenses. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Responsibility for delayed wages

Administrative liability is provided for late wages:

• for an organization – a fine in the amount of 30,000 to 50,000 rubles;
• for officials (for example, a manager) - a warning or a fine from 1000 to 5000 rubles;
• for entrepreneurs – a fine of 1,000 to 5,000 rubles.

Repeated violation entails:

• for an organization – a fine from 50,000 to 70,000 rubles;
• for officials (for example, a manager) – a fine of 10,000 to 20,000 rubles. or disqualification for a period of one to three years;
• for entrepreneurs – a fine from 10,000 to 20,000 rubles.

These are the requirements of parts 1 and 4 of Article 5.27 of the Code of the Russian Federation on Administrative Offenses.

In addition, criminal liability is provided for officials (Article 145.1 of the Criminal Code of the Russian Federation) and disciplinary liability (Article 192 of the Labor Code of the Russian Federation).