Compensation for late salary

Compensation under Art. 236 of the Labour Code

If salary, holiday pay, final settlement on dismissal or other payments are late, the employer must pay interest of at least 1/150 of the Bank of Russia key rate on the unpaid amount for each day of delay, from the day after the due date up to and including the day of actual payment.

• Compensation is charged on the amount payable — after personal income tax is withheld.
• The obligation arises regardless of the employer's fault; a collective or employment agreement may set a higher amount.
• According to the Ministry of Finance and the Federal Tax Service, compensation within the Labour Code amount is exempt from personal income tax (clause 3, Art. 217 of the Tax Code) and insurance contributions (subclause 2, clause 1, Art. 422 of the Tax Code).