Russia’s labor market is increasingly shifting toward informal employment as companies reduce their reliance on permanent staff and turn to self-employed workers because of the lower costs involved.
According to official Russian statistics, 74.6 million people were employed in Russia between January and May 2026, but only 44.1 million were classified as employees of organizations. The data was cited by Ukraine’s Foreign Intelligence Service.
The agency says that a permanent employee costs a Russian employer at least 43% more than the employee’s salary. Additional expenses include income taxes, social insurance contributions and workplace injury payments.
By contrast, working with self-employed contractors is considerably cheaper. Companies do not have to pay social insurance contributions for them, while self-employed workers pay just 6% in professional income tax.
According to the intelligence service, the severe labor shortage in 2023–2025 forced Russian businesses to retain permanent employees. However, the high cost of formal employment is now increasingly pushing companies toward alternative forms of employment.
Meanwhile, Russia’s financial problems are also deepening. During the first seven months of 2026, the country’s federal budget deficit reached 6.46 trillion rubles, with the gap between revenues and spending widening by another 724 billion rubles in July alone.
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