Personal income tax calculation: everything an employer needs to know

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

The main thing is to do everything on time.

What is personal income tax

Personal income tax is a tax that an individual pays on their income. But when it comes to salaries or other payments from the employer, it is he who is obliged to the Tax Code of the Russian Federation, article 24. Tax agents withhold the required percentage of the amount that is given to the employee and transfer it to the state.

What income do you need to withhold personal income tax?

Many cash receipts are exempt from tax, but they are mostly not related to the employer. It is necessary to withhold personal income tax from salaries, bonuses, vacation pay, royalties, and disability accruals if the employee went on sick leave.

The exceptions usually include various benefits and material assistance. If you pay an employee money under some non-standard article, it is better to check the law of the Tax Code of the Russian Federation, article 217.

At what rate to calculate personal income tax

The employer in the overwhelming majority of cases deals with the rate of 13% of the Tax Code of the Russian Federation, article 224. Tax rates. If the employee's income exceeds 5 million rubles per year, then the first 5 million are subject to personal income tax at a rate of 13%, and everything above this amount is subject to 15%.

30% is supposed to be charged from non-residents, that is, from those who spent 183 days or more abroad in a year. But there is also an exception. It concerns foreigners working on a patent, highly qualified specialists who arrived to work under a contract, those who moved to Russia under the compatriot resettlement program, crew members of Russian ships, refugees and persons who received temporary asylum, as well as residents of the countries of the Eurasian Economic Union: Armenia, Belarus, Kazakhstan and Kyrgyzstan. A 13% rate is also applied to the income of such people.

How the tax base is calculated

The base is considered a cumulative total. This is necessary due to the fact that personal income tax is paid in full rubles, without kopecks. If you do the calculations for each month separately, an underpayment may occur - a penny, but for the tax authorities this also matters.

Let's say an employee is charged 43,745 rubles per month. 13% of this amount - 5,686.85 rubles. The tax office goes to 5,687 rubles. The following rules apply here: if a number ends with 0, 1–0, 4, it is rounded down; if it is 0, 6–0, 9 - into a larger one. Where to move from 0, 5, you decide for yourself.

If you did not consider the tax as a cumulative total, then every month you would have an overpayment of 15 kopecks. Instead, in February, you add 43,745 for January, 43,745 for February, and you add 13% of the total. And then you take away what you have already paid.

(43 745 + 43 745) × 13% − 5 687 = 5 686, 7

The number again turns out to be not whole, it will have to be rounded, but the meaning is clear: with each next payment, you will neutralize the overpayment.

What are tax deductions and how to apply them

The tax deduction is a part of the income with which the state permits not to pay personal income tax. One of the options for its registration is through an employer. The employee must prove the right to deduct with documents.

There are quite a few deductions, and each has its own nuances. To figure it out, it's better to read a separate Lifehacker article about them.

The most common standard tax deduction for children is 1,400 rubles per month for the first and second child, 3,000 for the third and each subsequent one. It is valid until the annual income reaches 350 thousand.

Let's say your employee with a salary of 43,745 rubles has one child for whom he wants to receive a deduction. He can do this from January to August - in September his income will exceed 350 thousand. The deduction is deducted from the amount of income, and tax is calculated from the remainder.

(43 745 − 1 400) × 13% = 5 504, 85

If an employee came in the middle of the year, it is necessary to request from him a 2 ‑ personal income tax certificate from the previous place of work in order to understand whether he still has the right to deductions.

When to keep personal income tax

This is done in the last Tax Code of the Russian Federation, article 223. The date of actual receipt of income is the day of each month.

Let's take the same employee with a salary of 43,745 rubles. On June 20, he received an advance payment of 18 thousand rubles. On June 30, the tax base and personal income tax are calculated from it. And on July 5, he receives his salary for June, from which the advance and withholding tax have been deducted.

Although personal income tax is calculated and paid once a month, the employer can choose one of two ways:

• pay the advance in full, and deduct personal income tax from the second part of the salary;
• both parts of the salary should be reduced by personal income tax.

Personal income tax from vacation pay and disability benefits is withheld on the day they are paid. If a person leaves the job, the tax must be calculated on the last working day.

When to transfer personal income tax

The money must be transferred to the tax office no later than the next day after the employee receives income. For example, if the salary was issued on July 5, then the deadline for transferring personal income tax is July 6. Vacation tax and disability benefits must be transferred no later than the last calendar day of the month.

Where to transfer personal income tax

When it comes to an entrepreneur with employees, it depends on the tax regime. Individual entrepreneur on OSNO, USN and ESHN transfers money to the tax office at the place of registration. SP on UTII or PSN - at the place of registration. If an entrepreneur operates under several taxation systems and employees are employed in different areas, then the deductions for them are sent to different inspectorates.

Organizations pay personal income tax to the tax authority, where they are registered. Separate subdivisions transfer money to "their" tax office. An exception is made if the subdivisions are located on the territory of one municipality. Then you can choose one inspectorate, but this intention must be notified to the Federal Tax Service.

How to report on the payment of personal income tax

There are two types of reporting:

• 2 ‑ NDFL - employee income statement. Submitted to the Federal Tax Service once a year until March 1.
• 6 ‑ personal income tax - calculation of the amounts calculated and withheld by the employer. For the first quarter, it is submitted before April 30, six months before July 31, for three quarters - until October 31, and for a year - until March 1.

Employers who have 10 or more employees are obliged to the Tax Code of the Russian Federation, article 230, to submit reports in electronic form.