Shadow employment in Russia reaches 41% — intel report
The labor market in Russia is increasingly moving “into the shadows”; 41% of employed Russians are already working off the books.
According to a report from Ukraine's Foreign Intelligence Service (FISU), the shadow employment rate in Russia has reached 41%, with 30.5 million people working in unofficial capacities. This discrepancy between total employment and official figures arises from the rising cost of hiring full-time employees in Russia. Employers pay nearly 43% more than the gross salary, including personal income tax and social security contributions, while self-employed workers avoid these costs.
The rise of platform economies, such as taxi services, delivery services, marketplaces, and outsourcing companies, has further accelerated the shift towards self-employment. Sectors like retail, construction, manufacturing, agriculture, and transportation, which experience seasonal fluctuations, high turnover, and require quick workforce adjustments, have seen the widest gap between total employment and formally employed workers.
Although Russia faced a severe labor shortage from 2023 to 2025, prompting businesses to retain permanent employees, raise wages, and compete for talent, the economic slowdown in 2026 is prompting a shift towards optimizing costs through flexible employment arrangements. This change has direct financial implications for the Russian government, as it reduces the tax and social security revenue base, particularly during a time of war that demands more resources.
The FISU warns that attempts to tighten control over the informal labor market will only increase the cost of formal hiring and further slow down business activity. Additionally, data shows that more companies are closing than opening in Russia.
Written by urgent.news from Ukrinform - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
