Object of taxation of insurance premiums: concept, definition, characteristics, calculation procedure and responsibility for late payments

List of objects subject to assessment

The list of objects subject to insurance premiums includes funds transferred by policyholders in accordance with labor-related relations.

• Employment contracts.
• Civil contracts, for example, receiving remuneration for work performed. With this type of agreement, employees do not have the opportunity to receive sick leave and go on vacation. He usually receives his salary in the form of a commission.
• Agreements on human copyright, alienation of the exclusive right of the author for art, science, and literature, that is, agreements that will be related to human intellectual property.
• Agreements on licensing rights for the use of data from science, art, literature, etc.

You may be interested in: How to live on retirement: ways of survival, advice and revelations from retirees

You may be interested in:How to check your Sberbank account: hotline, Internet, SMS and other ways to check your account and bonuses

Previously, only contracts were subject to insurance premiums, now – relationships. This means that all benefits that are related to the employment relationship must be subject to contribution, except for those that are considered exceptions.

The object of taxation of insurance premiums is payment in favor of employees who are subject to compulsory insurance. Based on federal laws, exceptions include individual entrepreneurs, notaries, and lawyers. If the employee did not enter into an agreement with the employer, then there will be no payments.

Channel PROGRAMMER'S DIARY

The life of a programmer and interesting reviews of everything. Subscribe so you don't miss new videos.

Cash will not be considered subject to insurance contributions to extra-budgetary funds if:

• No contract or agreement was concluded.
• An agreement relates to rights to a specific property, such as a lease agreement.
• Dividends were purchased as a shareholder of the company.
• There was a material benefit from the loan with benefits.

You may be interested in: How a girl can make money: types and list of jobs, ideas for making money on the Internet and approximate payment

If during the period of transfer of wages the employer received information that his employee had died, then such funds will also not be subject to contributions. When a person dies, the employment relationship ends. There will also be no point in compulsory insurance for such an employee.

Insurance premiums from 2021: getting to know the changes

The issue of replacing insurance premiums with a single social tax was raised at the beginning of 2021, and already in April, draft federal laws on transferring to tax authorities the powers to administer insurance contributions for compulsory pension, social and health insurance were submitted to the lower house of parliament. On July 3, a package of relevant laws was signed by the President of the Russian Federation. Their entry into force is January 1, 2021. Therefore, we have time to understand all the innovations.

In this article, we will first of all draw your attention to the fundamentally new provisions and norms that appeared in Chapter. 34 of the Tax Code of the Russian Federation in comparison with the Federal Law of July 24, 2009 No. 212-FZ “On insurance contributions to the Pension Fund of the Russian Federation, the Social Insurance Fund of the Russian Federation, the Federal Compulsory Medical Insurance Fund” (hereinafter referred to as Federal Law No. 212-FZ) .

To understand the procedure for calculating and paying insurance premiums under the new rules, you must first study two federal laws:

– dated 07/03/2016 No. 243-FZ “On amendments to parts one and two of the Tax Code of the Russian Federation in connection with the transfer to tax authorities of the authority to administer insurance contributions for compulsory pension, social and medical insurance” (hereinafter referred to as Federal Law No. 243-FZ);

– dated 07/03/2016 No. 250-FZ “On amendments to certain legislative acts of the Russian Federation and invalidation of certain legislative acts (provisions of legislative acts) of the Russian Federation in connection with the adoption of the Federal Law “On Amendments to Parts One and Two” Tax Code of the Russian Federation in connection with the transfer to tax authorities of powers to administer insurance premiums for compulsory pension, social and medical insurance" (hereinafter referred to as Federal Law No. 250-FZ).

So, vesting the Federal Tax Service with the powers to administer the payment of insurance premiums required the addition of the Tax Code with provisions establishing the legal regulation of the rules for calculating and paying insurance premiums to the Pension Fund of the Russian Federation, the Social Insurance Fund and the Federal Compulsory Compulsory Medical Insurance Fund, as well as the implementation of functions for the administration of these payments by tax authorities.

Now, in accordance with Federal Law No. 243-FZ, the concept of insurance premiums, the rights and obligations of payers, elements of taxation of insurance premiums, benefits and features of payment of insurance premiums by certain categories of payers are defined in Section XI of the Tax Code of the Russian Federation.

As for Federal Law No. 250-FZ, its adoption is due to the need to bring the legislation on compulsory pension, social and medical insurance into line with innovations.

In this regard, amendments were adopted to a number of legislative acts, including the Law of the Russian Federation of March 21, 1991 No. 943-1 “On the tax authorities of the Russian Federation,” as well as to federal laws:

– dated December 15, 2001 No. 167-FZ “On compulsory pension insurance in the Russian Federation”;

– dated July 16, 1999 No. 165-FZ “On the fundamentals of compulsory social insurance”;

– dated November 29, 2010 No. 326-FZ “On compulsory health insurance in the Russian Federation”;

– dated 01.04.1996 No. 27-FZ “On individual (personalized) registration in the compulsory pension insurance system”;

– dated July 24, 1998 No. 125-FZ “On compulsory social insurance against industrial accidents and occupational diseases.”

For your information

The verification of the procedure for calculating and paying insurance premiums for insurance against accidents at work, as well as the correctness of payment of benefits, is, as before, carried out by the Social Insurance Fund.

Payers of insurance premiums

According to paragraphs. 1 clause 1 art. 419 of the Tax Code of the Russian Federation, payers of insurance premiums are persons who are policyholders in accordance with federal laws on specific types of compulsory social insurance and who make payments and other remuneration to individuals:

– organizations;

- individual entrepreneurs;

– individuals who are not individual entrepreneurs.

At the same time, subclause 2 of this clause contains a more detailed list of payers who do not make payments to individuals: individual entrepreneurs, lawyers, notaries engaged in private practice, arbitration managers, appraisers, mediators, patent attorneys and other persons engaged in private practice in accordance with the legislation of the Russian Federation .

As before, in a situation where the premium payer belongs to several categories simultaneously, he calculates and pays insurance premiums separately for each basis.

For your information

The Tax Code does not contain provisions according to which federal laws on specific types of compulsory social insurance may establish other categories of policyholders who are payers of insurance premiums (clause 2 of article 5 of Federal Law No. 212-FZ).

Object of taxation of insurance premiums

Clause 1 of Art. 420 of the Tax Code of the Russian Federation provides that the object of taxation of insurance premiums for organizations and individual entrepreneurs are payments and other remuneration in favor of individuals subject to compulsory social insurance in accordance with federal laws on specific types of compulsory social insurance:

– within the framework of labor relations and under civil law contracts, the subject of which is the performance of work, the provision of services;

– under copyright contracts in favor of the authors of works;

– under agreements on the alienation of the exclusive right to works of science, literature, art, publishing license agreements, license agreements on granting the right to use works of science, literature, art, including remunerations accrued by organizations for managing rights on a collective basis in favor of the authors of works of art agreements concluded with users.

However, the following are not subject to insurance premiums:

– payments under civil law contracts, the subject of which is the transfer of ownership or other proprietary rights to property, and contracts related to the transfer of property (property rights) for use, with the exception of the contracts listed in paragraphs. 2, 3 p. 1 art. 420 of the Tax Code of the Russian Federation (clause 4 of Article 420 of the Tax Code of the Russian Federation);

– payments in favor of individuals who are foreign citizens or stateless persons under employment contracts concluded with a Russian organization to work in its separate division, which is located outside the territory of the Russian Federation (clause 5 of Article 420 of the Tax Code of the Russian Federation);

– payments to volunteers as part of the execution of contracts concluded in accordance with Art. 7.1 of the Federal Law of August 11, 1995 No. 135-FZ “On Charitable Activities and Charitable Organizations” civil contracts for reimbursement of volunteers’ expenses, with the exception of food expenses in an amount exceeding the daily allowance provided for in paragraph 3 of Art. 217 of the Tax Code of the Russian Federation (clause 6 of Article 420 of the Tax Code of the Russian Federation);

– payments to foreign citizens and stateless persons under employment contracts or civil contracts, the subject of which is the performance of work, provision of services, in connection with participation in events for the preparation and holding of the 2021 FIFA World Cup and the 2021 FIFA Confederations Cup in the Russian Federation year (clause 7 of article 420 of the Tax Code of the Russian Federation).

For your information

Payments under civil contracts, the subject of which is the performance of work, the provision of services, concluded with an individual entrepreneur, are not subject to insurance premiums.

The basis for calculating insurance premiums for payers making payments and other benefits to individuals

The base for calculating insurance premiums for payers of insurance premiums - employers is determined at the end of each calendar month as the amount of payments and other remunerations accrued separately in relation to each individual from the beginning of the billing period on an accrual basis. The base for calculating insurance premiums does not include payments exempt from contributions (their list is given in Article 422 of the Tax Code of the Russian Federation).

The maximum value of the base for calculating insurance premiums. According to paragraph 3 of Art. 421 of the Tax Code of the Russian Federation for payers making payments to individuals, the following is established:

– the maximum value of the base for calculating insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity. This limit value is subject to annual indexation from January 1 of the corresponding year based on the growth of average wages in the Russian Federation (clause 4);

– the maximum value of the base for calculating insurance contributions for compulsory pension insurance. For the period 2017-2021, such a limit value is established taking into account the average salary in the Russian Federation determined for the corresponding year, increased by 12 times, and the increasing coefficients applied to it for the corresponding calendar year (clause 5).

Increasing coefficients in accordance with clause 5 of Art. 421 of the Tax Code of the Russian Federation are established in the following sizes.

Table 1.

Increasing coefficients for the maximum value of the base for calculating insurance contributions for compulsory pension insurance

It is stipulated that from 2022, the maximum value of the base for calculating insurance contributions for compulsory pension insurance is subject to annual indexation from January 1 of the corresponding year, taking into account the growth of average wages in the Russian Federation.

Insurance premiums are not collected from amounts of payments and other remuneration in favor of an individual that exceed the maximum value of the base for calculating insurance premiums established for the corresponding billing period, determined on an accrual basis from the beginning of the billing period.

note

Provision of paragraph 5 of Art. 421 of the Tax Code of the Russian Federation does not apply when calculating insurance premiums:

– for compulsory pension insurance at additional rates established by Art. 428 Tax Code of the Russian Federation;

– for additional social security for flight crew members of civil aviation aircraft, as well as certain categories of employees of coal industry organizations in accordance with Art. 429 Tax Code of the Russian Federation.

Determining the basis for calculating insurance premiums when making payments in kind. In this case, the base for calculating insurance premiums is defined as the cost of issued goods (work, services), other property, calculated on the basis of their prices, determined in the manner prescribed by Art. 105.3 of the Tax Code of the Russian Federation (clause 7 of Article 421 of the Tax Code of the Russian Federation). At the same time, the cost of such goods (work, services) includes the corresponding amount of VAT and excise taxes and excludes partial payment by an individual of the cost of goods received by him (work performed for him, services provided to him).

For your information

In paragraphs 8-9 of Art. 421 of the Tax Code of the Russian Federation prescribes the procedure for determining the base for calculating insurance premiums in terms of an author’s order agreement, an agreement on the alienation of the exclusive right to works of science, literature, art, a publishing license agreement, a license agreement on granting the right to use a work of science, literature, art.

Amounts not subject to insurance premiums

In paragraph 1 of Art. 422 of the Tax Code of the Russian Federation provides a list of payments that are not subject to insurance premiums. This list almost completely duplicates the list from Art. 9 of Federal Law No. 212-FZ. However, there are some nuances. First of all, they relate to restrictions on the amount of daily allowance for the purpose of exemption from insurance premiums. So, according to paragraph 2 of Art. 422 of the Tax Code of the Russian Federation, when employers pay expenses for business trips of employees both on the territory of the Russian Federation and abroad, the daily allowance provided for in paragraph 3 of Art. 217 Tax Code of the Russian Federation. In addition, in para. 10 pp. 2 clause 1 of this article also contains a reference to clause 3 of Art. 217 in relation to compensation in foreign currency in lieu of daily allowances paid by Russian shipping companies to crew members of ships sailing abroad.

Billing and reporting periods

Clause 1 of Art. 423 of the Tax Code of the Russian Federation stipulates that the calculation period is a calendar year, and paragraph 2 of this article establishes the following reporting periods:

– I quarter;

– half a year;

– nine months of the calendar year.

Earlier in Art. 10 of Federal Law No. 212-FZ contained clarification as to what constitutes a settlement period for reorganization, liquidation, as well as in a situation where an organization was created after the start of the calendar year. Now the general procedure established by the Tax Code of the Russian Federation applies to insurance premiums.

Determining the date of payment of other remunerations

Provisions of Art. 424 of the Tax Code of the Russian Federation duplicate the norm of Art. 11 of Federal Law No. 212-FZ: for organizations and individual entrepreneurs, the date of payments and other remunerations is defined as the day of accrual of payments and other remunerations in favor of the employee (the individual in whose favor payments and other remunerations are made).

Insurance premium rates

Information on the size of insurance premium rates can be obtained from individual articles of the Tax Code (see Table 2).

table 2

Comparison of the amount of contributions in accordance with Law No. 212-FZ and the Tax Code

So, for organizations and individual entrepreneurs (with the exception of payers for whom reduced insurance premium rates are established), the following insurance premium rates apply in 2017-2018:

1) for compulsory pension insurance:

– within the established limit of the base for calculating insurance contributions for compulsory pension insurance – 22%;

– above the established maximum base for calculating insurance contributions for compulsory pension insurance – 10%;

2) for compulsory social insurance in case of temporary disability and in connection with maternity within the established maximum value of the base for calculating insurance premiums for this type of insurance - 2.9%;

3) for compulsory health insurance – 5.1%.

However, from 2021, it is planned to increase the rate on insurance premiums from 30 to 34% (Article 425 of the Tax Code of the Russian Federation).

For your information

The rate of insurance contributions for compulsory social insurance in case of temporary disability in relation to payments and other remuneration in favor of foreign citizens and stateless persons temporarily staying in the Russian Federation (with the exception of highly qualified specialists in accordance with Federal Law of July 25, 2002 No. 115- Federal Law “On the Legal Status of Foreign Citizens in the Russian Federation”), within the established maximum value of the base for calculating insurance premiums for this type of insurance is 1.8%.

Please note that the amounts of reduced and additional tariffs remain unchanged for now.

The procedure for calculating and paying insurance premiums

According to the rules of paragraph 1 of Art. 431 of the Tax Code of the Russian Federation, based on the results of each calendar month during the billing period, the following are carried out:

– calculation of insurance premiums based on the base for their calculation from the beginning of the billing period to the end of the corresponding calendar month and insurance premium rates. At the same time, payers are required to keep records of the amounts of accrued payments and other remunerations, the amounts of insurance premiums related to them, in relation to each individual in whose favor the payments were made (clause 4 of Article 431 of the Tax Code of the Russian Federation);

– payment of insurance premiums minus the amounts of contributions calculated from the beginning of the billing period to the previous calendar month inclusive.

note

Payers of insurance premiums - employers calculate and pay insurance premiums separately in relation to insurance premiums for compulsory pension insurance, compulsory social insurance in case of temporary disability and in connection with maternity, compulsory health insurance.

When should insurance premiums be paid? The amount of insurance premiums calculated for payment for a calendar month must be paid no later than the 15th day of the next calendar month (Clause 3 of Article 431 of the Tax Code of the Russian Federation).

The amount of insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity is reduced by the payer by the amount of expenses incurred by him to pay insurance coverage for the specified type of compulsory social insurance in accordance with the legislation of the Russian Federation.

If, at the end of the settlement (reporting) period, the amount of expenses incurred by the payer for the payment of insurance coverage for compulsory social insurance in case of temporary disability and in connection with maternity (minus the funds allocated to the policyholder by the territorial body of the Social Insurance Fund for the payment of insurance coverage) exceeds the total amount of calculated insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity, the resulting difference is subject to offset by the tax authority against upcoming payments for this type of compulsory social insurance (in this case, such offset is possible only on the basis of confirmation received from the territorial body of the Social Insurance Fund of the expenses declared by the payer for payment insurance coverage for the corresponding settlement (reporting) period) or compensation by the territorial body of the Social Insurance Fund in accordance with the procedure established by Federal Law No. 255-FZ.

According to paragraph 11 of Art. 431 of the Tax Code of the Russian Federation, the payment of insurance premiums and the submission of calculations for insurance premiums are made by organizations at their location and the location of separate divisions that charge payments and other remuneration in favor of individuals.

Payment of insurance premiums by separate divisions. According to the rules of paragraph 12 of Art. 431 of the Tax Code of the Russian Federation, the amount of insurance premiums payable at the location of a separate division is determined based on the size of the base for calculating insurance premiums related to this separate division.

If an organization has separate divisions located outside the territory of the Russian Federation, the payment of insurance premiums, as well as the submission of calculations for insurance premiums for such separate divisions, are carried out by the organization at its location.

What is the deadline for reporting? Payers-employers must submit a calculation of insurance premiums no later than the 30th day of the month following the billing (reporting) period.

Calculations for insurance premiums are submitted to the tax authority:

– at the location of the organization;

– at the location of separate divisions of the organization;

– at the place of residence of the individual making payments and other remuneration to individuals.

For the first time, a new calculation of insurance premiums for the first quarter of 2021 will have to be submitted to the tax office no later than May 2, 2021, since April 30 coincides with a non-working day (weekend).

note

If in the submitted calculation the information on the total amount of insurance contributions for compulsory pension insurance calculated by the payer for the settlement (reporting) period does not correspond to the amount of calculated insurance contributions for compulsory pension insurance indicated in this calculation for each insured individual, such calculation is considered not submitted, o than the payer, no later than the day following the day of submission of the calculation, is sent a corresponding notification.

In a situation where the calculation is recognized as not submitted, the payer of insurance premiums, within five days from the date of receipt of the relevant notification, is obliged to submit a calculation in which the inconsistencies are eliminated. In this case, the date of submission of the said calculation is considered to be the date of sending the calculation recognized as initially not submitted.

For your information

Payers of insurance premiums will be fined for violating the deadline for submitting calculations according to the norms of the Tax Code. In particular, according to paragraph 1 of Art. 119 of the Tax Code of the Russian Federation, failure to submit a tax declaration to the tax authority at the place of registration within the deadline established by the legislation on taxes and fees entails the collection of a fine in the amount of 5% of the amount of tax not paid within the period established by the legislation on taxes and fees, subject to payment (additional payment) on the basis of this declaration, for each full or partial month from the day provided for its submission, but not more than 30% of the specified amount and not less than 1000 rubles.

What is the procedure for submitting calculations for insurance premiums? Clause 10 of Art. 431 of the Tax Code of the Russian Federation establishes that:

– payers whose average number of individuals, in whose favor payments and other remunerations are made, for the previous settlement (reporting) period exceeds 25 people, as well as newly created (including during reorganization) organizations whose number of these individuals exceeds given limit, submit calculations to the tax authority in electronic form using an enhanced qualified electronic signature via telecommunication channels;

– payers and newly created organizations (including during reorganization), whose average number of individuals in whose favor payments and other remunerations are made for the previous billing (reporting) period is 25 people or less, have the right to send payments in electronic form.

The form, formats and procedure for submitting calculations for insurance premiums are approved by the federal executive body authorized for control and supervision in the field of taxes and fees.

For your information

On July 5, 2021, on the website regulation.gov.ru, the Federal Tax Service announced the start of developing a form for calculating insurance premiums. The new form must be approved by October 1, 2021.

It should be noted that in addition to the calculation of insurance premiums submitted to the tax office, employers will have to submit to the Pension Fund:

– monthly information about insured persons in the SZV-M form. The procedure for submitting information will remain the same, but the deadline for their submission will change - no later than the 15th day of the month following the reporting month (currently no later than the 10th day) (subclause “d”, paragraph 4, article 2 of Federal Law No. 250-FZ);

– a report on the length of service of each employee for whose remuneration insurance premiums are calculated (an annual report that must be submitted no later than March 1 of the year following the reporting year) (clause “c”, clause 4, article 2 of Federal Law No. 250-FZ) .

note

Calculations (updated calculations) for insurance premiums for reporting (calculation) periods for insurance premiums that expired before January 1, 2017 are submitted to the relevant bodies of the Pension Fund of the Russian Federation, the Social Insurance Fund in the manner established by the legislation of the Russian Federation on insurance premiums, which was in force before the date of entry into force of the Federal Law No. 250-FZ (Article 23 of this law).

Interaction between the Social Insurance Fund and tax authorities. According to paragraph 8 of Art. 431 of the Tax Code of the Russian Federation, verification of the correctness of the declared expenses for the payment of sick leave and child benefits is carried out by the territorial bodies of the Social Insurance Fund in accordance with Federal Law No. 255-FZ.

The territorial body of the Social Insurance Fund must, within three days from the date of adoption of the relevant decision, send to the tax authority:

– copies of decisions on the allocation (refusal to allocate) funds for implementation (reimbursement) of the policyholder’s expenses for the payment of insurance coverage, non-acceptance of expenses for the payment of insurance coverage;

– information about the cancellation (change) of decisions by a higher body of the territorial body of the FSS or a court.

The procedure for the submission by territorial bodies of the FSS of decisions that have entered into force on the verification of the correctness of expenses for the payment of benefits, as well as information on the cancellation (change) of these decisions by a higher body of the territorial body of the FSS or the court to the tax authorities is determined by agreement of the interacting parties.

By virtue of clause 16 of Art. 431 of the Tax Code of the Russian Federation, the data of calculations for insurance premiums on calculated insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity and the amounts of payers' expenses for the payment of insurance coverage are sent by the tax authority to the relevant territorial body of the Social Insurance Fund to verify the correctness of the payer's expenses for the payment of insurance coverage. provision:

– no later than five days from the date of receipt of payments in electronic form;

– no later than 10 days from the date of receipt of paper payments.

***

In conclusion, here are the key points:

– Chapter 34 “Insurance Premiums” of the Tax Code of the Russian Federation does not provide for fundamental differences from the provisions of Federal Law No. 212-FZ with regard to the definition of premium payers, the object of taxation of insurance premiums and the base for their calculation;

– the list of payments not subject to insurance premiums is given in Art. 422 of the Tax Code of the Russian Federation. One of the differences from the current rules is the limitation for the purpose of exemption from insurance premiums in the amount of daily allowance in the manner established by clause 3 of Art. 217 of the Tax Code of the Russian Federation for the purpose of personal income tax;

– insurance premium rates for 2017-2018 for payers who do not have the right to apply reduced rates are established in Art. 426 of the Tax Code of the Russian Federation and do not differ from those currently in force;

– categories of insurance premium payers who have the right to pay premiums at reduced rates, the amounts of these tariffs, as well as the conditions for their application are listed in Art. 427 Tax Code of the Russian Federation;

– payment of insurance premiums is made no later than the 15th day of the next calendar month;

– instead of forms RSV-1 and 4-FSS, it will be necessary to submit a single calculation of insurance premiums to the tax office;

– the calculation of insurance premiums is submitted no later than the 30th day of the month following the billing (reporting) period.

E. Dzhabazyan, magazine “Payment: accounting and taxation”

Rules for taxation of funds

Payments that are subject to insurance premiums are calculated for each employee individually from the beginning of the billing periods by accrual. Moreover, an amount that is not subject to contribution, if any, will be deducted from the salary. The objects of taxation of insurance premiums are:

• wage;
• various types of allowances - for additional shifts, combining several positions in the workplace, for length of service, etc.;
• the use of an increasing coefficient, for example, regional regulation, for work in high mountainous areas;
• payment to an employee in the form of certain goods.

Employee benefits

Some organizations provide their employees with various benefits, for example, a New Year's gift for a child, financing of health resort vouchers for an employee and his family, payment of expenses for a kindergarten. Will such benefits become subject to insurance premiums? If an organization transfers funds personally to an employee, for example, returns money for a vacation in a sanatorium, then they will become such an object.

If an enterprise transfers money to institutions (a travel agency, a kindergarten), then the payment does not become subject to taxation, the employee does not receive anything, but at the same time uses the service or assistance of the employer. Not all organizations provide such assistance to employees; in most cases, the employee receives remuneration for his work.

Payments made to a person who is not considered an employee of the organization cannot be subject to contribution.

Powers of the Federal Tax Service, state funds

Tax authorities have the right:

• monitor the actions of entrepreneurs and employers (checking the correctness of the calculation, timely payment of the contribution);
• to accept payments, contributions, return funds, based on the decision of the Social Insurance Fund or the Pension Fund of the Russian Federation;
• decision to provide an installment plan for the employer or a deferment;
• establishment of penalties and fines.

You may be interested in: Is it possible to refuse a mortgage: conditions for concluding an agreement, how to terminate

The Pension Fund of the Russian Federation and the Social Insurance Fund have the right to take similar actions related to insurance premiums, the period of which expired before January 2021, or was clarified or recalculated. The Pension Fund of the Russian Federation is also responsible for maintaining records in the compulsory insurance program, and the Social Insurance Fund is considered the administrator for maintaining insurance amounts for compulsory social insurance. The FSS retained the right to verify the declared amounts for payments for temporary disability of employees and maternity.

Insurance premium rates

Information on the size of insurance premium rates can be obtained from individual articles of the Tax Code (see diagram).

In addition, in addition to the above-mentioned base for calculating insurance premiums, insurance premiums are paid to the Pension Fund based on a 10% tariff.

Accounting for insurance premium payments

The employer pays the employee. At the same time, he must pay insurance premiums. In order for payment to be made correctly, it is necessary to have information from the accounting organization. All necessary information is specified in the order of the Ministry of Health of Social Development of the Russian Federation No. 908n (hereinafter referred to as order). Based on this order, payers are required to keep records of their actions to transfer funds:

• accrued fines and penalties;
• received money for transfer;
• expenses incurred to pay certain amounts of insurance;
• in case of employee maternity or disability.

There should also be information about funds received from the Social Insurance Fund. Accounting for objects subject to insurance premiums is carried out in a special manner, since the employer does not transfer all accrued funds. It is possible to reduce the calculated contribution to the SS through benefits provided by the fund itself. Only the amount of funds should not be higher than the FSS established. The transfer of funds that can be reduced is described in the order.

• Benefits paid due to a worker's disability.
• Payment to women due to pregnancy and childbirth.
• A one-time payment to women who registered with medical institutions in the early stages of pregnancy.
• Payments upon birth of a child.
• Payment to the parent for the child every month for one and a half years.
• Social payment for funerals or financing of necessary funeral services from a specialized organization.
• Payment for four days off per calendar month when caring for disabled children.

The enterprise must keep records for each employee and systematize the information. Once a certain amount of payment has been reached for an individual employee, the accrual of funds is allowed to stop.

Payers of insurance premiums

Was: Art.
5 of Federal Law No. 212-FZ. Became: Art. 419 of the Tax Code of the Russian Federation.

According to paragraphs. 1 clause 1 art. 419 of the Tax Code of the Russian Federation, payers of insurance premiums are persons who are policyholders in accordance with federal laws on specific types of compulsory social insurance and who make payments and other remuneration to individuals:

• organizations;
• individual entrepreneurs;
• individuals who are not individual entrepreneurs.

At the same time, pp. 2 of this paragraph contains a more detailed list of payers who do not make payments to individuals: individual entrepreneurs, lawyers, notaries engaged in private practice, arbitration managers, appraisers, mediators, patent attorneys and other persons engaged in private practice in accordance with the legislation of the Russian Federation.

As before, in a situation where the premium payer belongs to several categories simultaneously, he calculates and pays insurance premiums separately for each basis.

For information, the Tax Code does not contain provisions according to which federal laws on specific types of compulsory social insurance may establish other categories of policyholders who are payers of insurance premiums (clause 2 of article 5 of Federal Law No. 212-FZ).

Was: Art. 8 of Federal Law No. 212-FZ.

Became: Art. 421 Tax Code of the Russian Federation.

The base for calculating insurance premiums for payers of insurance premiums - employers is determined at the end of each calendar month as the amount of payments and other remunerations accrued separately in relation to each individual from the beginning of the billing period on an accrual basis.

The base for calculating insurance premiums does not include payments exempt from contributions (their list is given in Article 422 of the Tax Code of the Russian Federation). .

The maximum value of the base for calculating insurance premiums. According to paragraph 3 of Art. 421 of the Tax Code of the Russian Federation for payers making payments to individuals, the following is established:

• the maximum value of the base for calculating insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity. This limit value is subject to annual indexation from January 1 of the corresponding year based on the growth of average wages in the Russian Federation (clause 4);
• the maximum value of the base for calculating insurance contributions for compulsory pension insurance. For the period 2021–2021, such a limit value is established taking into account the average salary in the Russian Federation determined for the corresponding year, increased by 12 times, and the increasing coefficients applied to it for the corresponding calendar year (clause 5).

Increasing coefficients in accordance with clause 5 of Art. 421 of the Tax Code of the Russian Federation are established in the following sizes.

It is stipulated that from 2022, the maximum value of the base for calculating insurance contributions for compulsory pension insurance is subject to annual indexation from January 1 of the corresponding year, taking into account the growth of average wages in the Russian Federation.

Insurance premiums are not collected from amounts of payments and other remuneration in favor of an individual that exceed the maximum value of the base for calculating insurance premiums established for the corresponding billing period, determined on an accrual basis from the beginning of the billing period.

^Back to top of page

https://www.youtube.com/watch?v=Q3pEq36lQRo

From January 1, 2021, all payers of insurance premiums are taken into account by the tax authorities.

At the same time, due to the specifics of insurance premiums, some features of registration of certain categories of insurance premium payers have appeared.

For example, registration (deregistration) with the tax authority of an international organization recognized as a payer of insurance premiums is carried out by the tax authority on the basis of an application from such an international organization for registration (deregistration) as a payer of insurance premiums.

Registration (deregistration) with the tax authority of an arbitration manager or appraiser is carried out by the tax authority at their place of residence on the basis of information reported by the authorized federal executive body exercising the functions of control (supervision) over the activities of self-regulatory organizations of arbitration managers and appraisers.

Registration (deregistration) of a patent attorney with the tax authority is carried out by the tax authority at his place of residence on the basis of information reported by the Federal Service for Intellectual Property.

Registration (deregistration) of an individual as a payer of insurance premiums, as a mediator is carried out by the tax authority at the place of his residence on the basis of an application from this individual for registration (deregistration) as a payer of insurance premiums (as a mediator ), submitted to any tax authority of his choice.

Clause 3.4

The responsibilities of insurance premium payers are separately highlighted, which include:

1. payment of insurance premiums established by the Tax Code of the Russian Federation;
2. keeping records of objects subject to insurance premiums, the amounts of calculated insurance premiums for each individual in whose favor payments and other remuneration were made;
3. submission to the tax authority at the place where insurance premium payments are recorded;
4. submission to the tax authorities of documents necessary for the calculation and payment of insurance premiums;
5. submission to the tax authorities, in cases and in the manner provided for by the Tax Code of the Russian Federation, information about insured persons in the individual (personalized) accounting system;
6. ensuring for six years the safety of documents necessary for the calculation and payment of insurance premiums;
7. notification to the tax authority at the location of the Russian organization that pays insurance premiums about vesting a separate division with the authority to accrue payments and rewards in favor of individuals within one month from the date of vesting it with the corresponding powers;
8. other duties provided for by the legislation of the Russian Federation on taxes and fees.

Article 419 of the Tax Code of the Russian Federation establishes two categories of insurance premium payers:

1. payers making payments and other remuneration to individuals:

• organizations
• individual entrepreneurs
• individuals who are not individual entrepreneurs

• payers who do not make payments and other remuneration to individuals, namely individual entrepreneurs, lawyers, notaries engaged in private practice, arbitration managers, appraisers, patent attorneys and other persons engaged in private practice in accordance with the legislation of the Russian Federation.

READ MORE: Sogaz VHI programs - cost, types, what is included
Registration of a mediator is carried out by the tax authority at the place of residence of this individual (place of his residence - if this individual does not have a place of residence on the territory of the Russian Federation) based on the application of this individual, submitted to any tax authority of your choice.

Billing period	Insurance contributions for compulsory pension insurance	Insurance premiums for compulsory health insurance
2017	- if the payer’s income does not exceed 300,000 rubles. — 1 minimum wage x 26% x 12 months. - if the payer’s income exceeds 300,000 rubles. — 1 minimum wage x 26% x 12 months. 1% of the amount of income of the payer of insurance premiums exceeding 300,000 rubles, but not more than 8 minimum wage x 26% x 12 months.	1 minimum wage x 5.1% x 12
2018	- if the payer’s income does not exceed 300,000 rubles, - in a fixed amount of 26,545 rubles. - if the braider’s income exceeds 300,000 rubles. — in a fixed amount of RUB 26,545. 1% of the payer’s income exceeding 300,000 rubles, but not more than 8x26,545 rubles. = 212,360 rub.	in a fixed amount of RUB 5,840.
2019	- if the payer’s income does not exceed 300,000 rubles, - in a fixed amount of 29,354 rubles. - if the braider’s income exceeds 300,000 rubles. — in a fixed amount of RUB 29,354. 1% of the payer’s income exceeding 300,000 rubles, but not more than 8x29,354 rubles. = 234,832 rub.	in a fixed amount of 6,884 rubles.
2020	- if the payer’s income does not exceed 300,000 rubles, - in a fixed amount of 32,448 rubles. - if the braider’s income exceeds 300,000 rubles. — in a fixed amount of RUB 32,448. 1% of the payer’s income exceeding 300,000 rubles, but not more than 8x32,448 rubles. = 259,584 rub.	in a fixed amount of RUB 8,426.

Heads of peasant (farm) farms (hereinafter referred to as peasant farms) pay the appropriate insurance contributions for compulsory pension insurance and compulsory health insurance in a fixed amount for themselves and for each member of the peasant farm.

Thus, regardless of the amount of income, the head of the peasant farm pays insurance premiums in a fixed amount without charging 1% of the amount of income exceeding 300,000 rubles.

If the entrepreneurial or other professional activities of self-employed payers have not been carried out since the beginning of the billing period or have ceased before its end, then in this case the amount of insurance premiums is determined in proportion to the months worked.

Individual accounting

Inspectors conduct audits and review the information on each worker's record card against the accounting list and then compare the information. Accounting for an object subject to insurance premiums requires an individual approach, but the guidelines for using the chart of accounts do not provide for this. The accruals are reflected collectively.

In order to facilitate the work and avoid making mistakes, a decision was made by the Pension Fund and the Social Insurance Fund in January 2010. This solution recommends the use of cards; they contain additional pages that will need to be filled out only if tariffs that differ from the basic indicators are used.

Accounting

Accounting is controlled using general rules. For these purposes, you need to use the chart of accounts No. 69. After the reform of compulsory social insurance, the system of accounts has become simpler for enterprises.

The order of the Ministry of Health and Social Development specifies an algorithm for accounting for objects subject to insurance premiums. It is necessary to separate contributions, benefits, and fines. You cannot include travel information in expenses.

The amounts of contributions are indicated in rubles, and charges and expenses are carried out in rubles and kopecks. The FSS decided to return the funds that were overpaid. They must be entered in the accounting records and the information must be entered in the month in which they were received.

Income not considered subject to taxation

Specialists involved in contributions to the Social Insurance Fund and the Pension Fund of the Russian Federation should be aware that not all funds are subject to mandatory taxation and transfer to the funds. Whether a certain payment is subject to insurance premiums or not can be found out using Art. 422 NK. It contains a list of payments that should not be taxed.

Income that is not subject to insurance premiums:

• Government payments, such as unemployment benefits.
• Providing employees with food, fuel for work, housing at the expense of the employer, partial payment of utilities.
• Compensation for dismissal, except for funds for unused vacation to the employee.
• Expenses for the employment of employees, dismissal due to reduction, due to the reorganization of the company or due to its closure.
• One-time cash assistance to subordinates, transferred due to the occurrence of natural disasters, the death of a close relative, at the birth of children in an amount not exceeding 50 thousand rubles.
• Transfers for compulsory health insurance.
• Transfer of money for voluntary health insurance for a period of more than 12 months.
• Pension payments under agreements concluded with non-state funds.
• Transfer of additional contributions to the funded part of workers' pensions, but not more than twelve thousand rubles per employee per year.
• Financial assistance to company employees, but not more than four thousand rubles.
• Providing employees with specialized clothing necessary to perform assigned tasks in the workplace.
• Money spent on additional training for employees.

Income that is not subject to insurance premiums

Insurance premiums do not need to be charged if there is no taxable object. The Tax Code of the Russian Federation in some cases directly indicates that there is no need to charge contributions.

Thus, payment received by an individual under GPC agreements, the subject of which is the transfer of ownership and other property rights, as well as the transfer of property for use, is not subject to contributions. These are contracts of purchase and sale, lease, gift, loan and others (clause 4 of article 420 of the Tax Code of the Russian Federation). In this case, those contracts that are still subject to taxation should be excluded (author's orders, licensing agreements, etc., specified in paragraph 1 of Article 419 of the Tax Code of the Russian Federation).

If you have a question about which salary insurance premiums are not paid, then there is only one answer: from the salary of foreigners and stateless persons with whom employment contracts have been concluded and they work in a separate foreign division of a Russian organization. The same rule applies to these persons if the Russian employer has entered into contracts with them to perform work or provide services outside the Russian Federation (clause 5 of Article 420 of the Tax Code of the Russian Federation).

There is no object for taxation of insurance premiums when compensating expenses for volunteers who have entered into GPC agreements within the framework of the law on charitable activities (Article 7.1 of Law No. 135-FZ of August 11, 1995). At the same time, food expenses are also exempt from insurance premiums, but only in an amount not exceeding the daily allowance (clause 6 of Article 420; clause 3 of Article 217 of the Tax Code of the Russian Federation).

Only until December 31, 2021, there is an exemption from insurance premiums for a number of payments to volunteers related to the 2014 Winter Olympic and Paralympic Games in Sochi. In 2021, it will no longer be applied (Parts 6 and 7 of Article 7 of Law No. 212-FZ).

Russia is preparing to host the 2018 FIFA World Cup and the 2017 FIFA Confederations Cup, in this regard, payments not subject to insurance premiums include (clause 7 of Article 420 of the Tax Code of the Russian Federation):

• payments to citizens of foreign countries and stateless persons who work or provide services under labor and civil service agreements concluded with the organizing committee of the championship in the Russian Federation, the international football association FIFA and their subsidiaries;
• reimbursement to volunteers for expenses they incurred while participating in events under GPC agreements concluded with FIFA and the organizing committee, as well as their subsidiaries.

The list of amounts not subject to insurance premiums is limited and includes the costs of processing and obtaining visas and invitations, travel, food and accommodation, sports equipment, costs of communication services, transport, translation services, as well as the cost of souvenirs with the symbols of events held in Russia football championship and FIFA Cup.

Is sick leave subject to taxation?

You may be interested in: United Traders: reviews. Trading company United Traders

The question often arises among employees of the accounting service: is sick leave subject to this type of taxation? For most cases, sick leave is not subject to taxation.

But there is an exception to the rule. Sometimes the employer independently pays the employee additional money in accordance with the salary he received. In this case, sick leave is subject to insurance premiums, but this is rare.

Objects under Article 420 of the Tax Code of the Russian Federation

Tax legislation provides for sets of objects for each of three groups of contribution payers:

Group 1: employers - companies and individual entrepreneurs

The objects of taxation of insurance premiums in 2021 for employers are:

Group 2: individual employers (not entrepreneurs)

For this group of contribution payers, the legislation provides for the following:

Group 3: Individual entrepreneurs, lawyers, appraisers, mediators, private notaries and other similar categories of persons engaged in private practice who do not make payments to individuals

What are the objects for this group of contribution payers, see in the figure:

At the same time, a number of payments are not recognized as subject to taxation with insurance premiums (clauses 4-8 of Article 420, Article 422 of the Tax Code of the Russian Federation).

Cash not subject to taxation

In 2021, the calculation form for contributions has been updated. Now you need to enter information about payments that are not subject to such contributions. Although they will not affect the total amount of the transfer.

For this purpose, a separate line appeared in the documents. Information about the amount that is not subject to taxation must be indicated not only for each quarter, but also monthly. Initially, all funds should be reflected on one page of the calculation, then on another - information about funds that do not need to be subject to contributions.

Responsibility for non-payment of insurance premiums

Company managers manage accounts payable in order to optimize the cash flow system and expand the business. Previously, employers could “defer” payment of contributions, since previously the liability for such actions was not so great. Thus, reporting on funds for transfers to funds in the organization was carried out, accruals were made, but no funds were received into the country's budget. Funds raising funds did not have the ability to seek payment from all employers. Therefore, the government decided to redirect the rights and obligations of keeping records of contributions to the Federal Tax Service. As a result, changes took place in the Tax Code.

The Federal Tax Service, after receiving all the information on debtors of insurance premiums, suggested that employers apply debt restructuring with subsequent repayment. In case of evasion and unwillingness to pay debts, criminal liability arises.

Updates to the Criminal Code came into force in 2021. They indicate liability for non-payment of funds, for lack of transfers to the fund, as well as for deliberately reducing the amount required for payment.

Previously, there was also criminal liability for non-payment of money, but in 2003 they were transferred to an administrative violation. From 2003 to 2021, employers faced a fine of 20% of the entire unpaid amount for such acts. At the moment, criminal liability arises for the same actions. Imprisonment for up to six years is possible. The objects of taxation with insurance premiums are set out in Articles 198, 199, and 199.2. There have been changes in the Criminal Code, and new articles have also appeared - 199.3, 199.4.

Base for calculating insurance premiums

According to the rules of paragraph 1 of Art. 431 of the Tax Code of the Russian Federation, based on the results of each calendar month during the billing period, the following are carried out:

• calculation of insurance premiums based on the base for their calculation from the beginning of the billing period to the end of the corresponding calendar month and insurance premium rates. At the same time, payers are required to keep records of the amounts of accrued payments and other remunerations, the amounts of insurance premiums related to them, in relation to each individual in whose favor the payments were made (clause 4 of Article 431 of the Tax Code of the Russian Federation);
• payment of insurance premiums minus the amounts of contributions calculated from the beginning of the billing period to the previous calendar month inclusive.

Please note: Payers of insurance premiums - employers calculate and pay insurance premiums separately in relation to insurance premiums for compulsory pension insurance, compulsory social insurance in case of temporary disability and in connection with maternity, compulsory health insurance.

When should insurance premiums be paid? The amount of insurance premiums calculated for payment for a calendar month must be paid no later than the 15th day of the next calendar month (Clause 3 of Article 431 of the Tax Code of the Russian Federation).

The amount of insurance premiums to be transferred is calculated in rubles and kopecks (clause 5 of Article 431 of the Tax Code of the Russian Federation).

The amount of insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity is reduced by the payer by the amount of expenses incurred by him to pay insurance coverage for the specified type of compulsory social insurance in accordance with the legislation of the Russian Federation.

According to paragraph 11 of Art. 431 of the Tax Code of the Russian Federation, the payment of insurance premiums and the submission of calculations for insurance premiums are made by organizations at their location and the location of separate divisions that charge payments and other remuneration in favor of individuals.

Payment of insurance premiums by separate divisions. According to the rules of paragraph 12 of Art. 431 of the Tax Code of the Russian Federation, the amount of insurance premiums payable at the location of a separate division is determined based on the size of the base for calculating insurance premiums related to this separate division.

If an organization has separate divisions located outside the territory of the Russian Federation, the payment of insurance premiums, as well as the submission of calculations for insurance premiums for such separate divisions, are carried out by the organization at its location.

What is the deadline for reporting? Payers-employers must submit a calculation of insurance premiums no later than the 30th day of the month following the billing (reporting) period.

Calculations for insurance premiums are submitted to the tax authority:

• at the location of the organization;
• at the location of separate divisions of the organization;
• at the place of residence of the individual making payments and other remuneration to individuals.

For the first time, a new calculation of insurance premiums for the first quarter of 2021 will have to be submitted to the tax office no later than May 2, 2021, since April 30 coincides with a non-working day (weekend).

In a situation where the calculation is recognized as not submitted, the payer of insurance premiums, within five days from the date of receipt of the relevant notification, is obliged to submit a calculation in which the inconsistencies are eliminated. In this case, the date of submission of the said calculation is considered to be the date of sending the calculation recognized as initially not submitted.

Please note: Payers of insurance premiums will be fined for violating the deadline for submitting calculations according to the norms of the Tax Code. In particular, according to paragraph.

Starting from 2021, instead of forms RSV-1 and 4-FSS, it will be necessary to submit a single calculation for insurance premiums.

The base for calculating insurance premiums is defined as the amount of payments and other remunerations that are subject to taxation, accrued by payers of insurance premiums for the billing period in favor of individuals, with the exception of amounts not subject to insurance premiums (for example, benefits, compensation, financial assistance, etc. ).

In this case, the base for calculating insurance premiums is determined separately for each individual at the end of each calendar month from the beginning of the billing period on an accrual basis.

READ MORE: Source of funding for insurance pensions

The base for calculating insurance contributions for compulsory pension insurance and the base for calculating insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity have a limit value, after which insurance contributions are not charged.

The exception is insurance premiums paid by the main category of payers when applying the tariff of insurance premiums for compulsory pension insurance in the amount of 22%, in this case, insurance premiums are also levied on payments in excess of the established maximum value of the base of insurance contributions for compulsory pension insurance in the amount of 10% in excess of the specified amount.

The maximum value of the base for calculating insurance premiums is subject to annual indexation from January 1 of the corresponding year based on the growth of average wages in the Russian Federation.

in 2021 - 1.9;

in 2021 - 2.0;

in 2021 - 2.1;

in 2021 - 2.2;

in 2021 - 2.3.

The maximum value of the base for calculating insurance premiums in 2017-2018.

The base for calculating insurance premiums in relation to copyright contracts is reduced by the amount of actually incurred and documented expenses associated with the extraction of such income, and if these expenses cannot be documented, they are accepted for deduction in certain amounts (as a percentage of the amount accrued income).

Payers-employers calculate and pay insurance premiums on a monthly basis. The deadline for payment of insurance premiums is no later than the 15th following calendar month in which payments were made in favor of individuals.

The amount of insurance premiums is determined in rubles and kopecks and is calculated separately in relation to insurance premiums for compulsory pension insurance, insurance premiums for compulsory social insurance in case of temporary disability and in connection with maternity, and insurance premiums for compulsory medical insurance.

The billing period is the calendar year, the reporting periods are the first quarter, six months, and nine months of the calendar year.

In addition, from January 1, 2021, the offset principle of spending compulsory social insurance funds in the event of temporary disability and in connection with maternity will remain. In this regard, after January 1, 2021, the payer can reduce the amount of insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity by the amount of expenses incurred by him for the payment of compulsory insurance coverage for the specified type of compulsory social insurance.

It should be noted that verification of the correctness of the declared expenses for the payment of insurance coverage for compulsory social insurance in case of temporary disability and in connection with maternity is assigned to the Social Insurance Fund.

To carry out these checks, data from calculations of insurance premiums on calculated insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity and on the amount of expenses of payers for insurance payments are sent by the tax authority to the Social Insurance Fund.

In connection with the change of the administrator of insurance premiums, the budget classification codes for transferring insurance premiums have changed since 2017.

Calculus rules

For payers and employers, the conditions for paying such contributions have not changed. They must make calculations and payments by the fifteenth day of the calendar month. The general period is a year; quarterly, half-year, and nine months are recognized as reporting periods. The employer can reduce the total amount of money transferred in the event of temporary disability, as well as in the event of maternity of the employee.

If, after calculating contributions for a certain period of time, it turns out that the organization has made payments for temporary disability of a person and maternity more than the total amount of contributions for this type, then the difference in the amount will be counted into future contributions under the same conditions. This will reduce the amount of future payments.

Source

Billing and reporting periods

Was: Art. 10 of Federal Law No. 212-FZ.

Became: Art. 423 Tax Code of the Russian Federation.

Clause 1 of Art. 423 of the Tax Code of the Russian Federation stipulates that the calculation period is a calendar year, and paragraph 2 of this article establishes the following reporting periods:

• I quarter;
• half year;
• nine months of the calendar year.

Earlier in Art. 10 of Federal Law No. 212-FZ contained clarification as to what constitutes a settlement period for reorganization, liquidation, as well as in a situation where an organization was created after the start of the calendar year. Now the general procedure established by the Tax Code of the Russian Federation applies to insurance premiums.

The billing period is a calendar year.

In 2010, reporting periods will be recognized as half a year and a calendar year; accordingly, information will need to be submitted before August 1, 2010 and before February 1, 2011.

Since 2011, the reporting periods have been the first quarter, half a year, nine months and a calendar year.

If an organization was created after the beginning of a calendar year, the first billing period for it is the period from the date of creation to the end of that calendar year.

If an organization is liquidated or reorganized before the end of a calendar year, its last billing period is the period from the beginning of that calendar year until the day the liquidation or reorganization is completed.

The date of payment and other remuneration is defined as the day of accrual of payments and remuneration.

Payers making payments in favor of individuals during the billing (reporting) period at the end of each calendar month, no later than the 15th day of the following month, pay a monthly obligatory payment.