Russia’s Shadow Employment Hits 30.5 Million, Reaching 41% of Workforce
Updated
Updated · Букви · Aug 16
Russia’s Shadow Employment Hits 30.5 Million, Reaching 41% of Workforce
1 articles · Updated · Букви · Aug 16
Summary
30.5 million Russians worked outside official staff payrolls in January-May 2026, leaving only 44.1 million of 74.6 million employed people formally listed, according to data cited by Ukraine’s Foreign Intelligence Service.
A 43% extra cost above gross salary for formal hires is pushing employers toward self-employed and contractor models, where workers pay a 6% professional income tax and companies avoid insurance contributions.
Retail, construction, manufacturing, agriculture and transportation show the widest gap between total and staff employment, with many workers missing paid sick leave, vacations and full pension contributions.
The shift follows labor shortages in 2023-2025 but has accelerated in 2026 as growth slows, loans stay expensive and demand weakens, prompting companies to cut personnel costs instead of expanding payrolls.
That trend narrows Russia’s tax and insurance base as war spending rises, adding pressure to state finances while weakening social protections for millions of workers.