Salary Taxes In Belarus: What's The Cost?

Belarus has a multi-faceted tax system that includes various types of taxes, such as corporate income tax, personal income tax, value-added tax, excise taxes, property taxes, and social security contributions. The country's taxation policies are designed to support its social and economic objectives, with tax laws being regularly updated to create a favourable climate for businesses, particularly small and medium-sized enterprises.

Personal income tax in Belarus is levied on residents' worldwide income and non-residents' income sourced within the country. As of 2022, the personal income tax rate was 13%, with a maximum rate of 30% and a minimum of 12%. This rate is applied to salaries, bonuses, and remuneration under civil law contracts.

In addition to income tax, employees in Belarus also contribute to pension insurance and compulsory insurance against industrial accidents and occupational diseases. These contributions are paid to relevant funds, such as the Social Protection Fund and the Belarusian Republican Unitary Insurance Company Belgosstrakh.

Income tax for individuals

In Belarus, individuals are taxed on their income through a Personal Income Tax (PIT) system. This tax applies to residents and non-residents differently. Residents of Belarus are taxed on their worldwide income, while non-residents are taxed only on their income sourced within the country.

An individual is considered a resident of Belarus if they are physically present in the country for more than 183 days in a calendar year. The tax rate for individuals is a flat rate of 13%, with a lower rate of 9% applying to employment income received by qualifying employees of companies in high-technology parks. This means that most individuals will pay 13% of their income in tax, while a smaller group of people will pay 9%.

In addition to the standard tax deductions, there are also social, property, and professional tax deductions that taxpayers can claim. However, these additional deductions are only granted if the taxpayer submits their tax returns at the end of the tax period. Taxable income includes all income, regardless of its source, such as income from employment, property, services, or other benefits in kind. Capital gains are also taxed, but they are treated as ordinary income.

It is important to note that joint tax returns are not permitted in Belarus. Each taxpayer must file a separate return. Compliance with tax laws is crucial, and penalties may be imposed for late filing or failure to pay taxes on time.

Salary after tax

Personal income tax in Belarus is levied on residents' worldwide income and non-residents' income sourced within the country. The tax rate for individuals, also known as the personal income tax rate, was 13% in 2022, with a maximum rate of 30% and a minimum of 12%. Income tax is calculated based on salary, bonuses, and remuneration under civil law contracts. There are special tax regimes, such as the simplified tax system, which offers a reduced tax rate of 5-3% for small businesses and individual entrepreneurs.

In addition to income tax, Belarusian employees and employers are required to make social security contributions. These contributions fund social security benefits such as pensions, health insurance, and unemployment benefits. The contribution rate for employees is 1% of their wages, while employers contribute 34% of the employee's gross salary, including 28% for pension insurance and 6% for social insurance. Self-employed individuals and individual entrepreneurs must make higher contributions, with a 29% rate for pension insurance and a 6% rate for social insurance.

The cost of living in Belarus is relatively low compared to other European countries. For example, the cost of living for a family of four in Minsk, excluding rent, is around BYN 4,403.08 (USD 1,744). Food prices are also reasonable, with essential items such as milk and bread being affordable. Additionally, Belarus has a very affordable public transportation system, with low fares for local transport and taxis.

The average salary in Belarus provides insight into the economic situation of the region. As of 2024, the average monthly salary across all sectors is about BYN 2,271. However, salaries vary widely between industries, with IT, finance, and logistics typically offering higher remuneration. Public sector employees generally earn lower wages compared to those in the private sector.

When considering salary after tax in Belarus, it is important to note that taxes are not the only deductions from an individual's gross income. Other mandatory contributions, such as social security, and living expenses should be taken into account to understand the disposable income of Belarusian workers.

Social security contributions

Employees

Employees in Belarus are covered by a two-tier health insurance system. The primary system is the mandatory state-funded healthcare provided to all Belarusian citizens and legal residents. This basic medical coverage is funded by social security contributions made by employers. Employees are not required to have private health insurance, and all employees are entitled to basic healthcare coverage through the state-funded system.

Additionally, employees in Belarus contribute to a national pension plan, which provides retirement income upon reaching retirement age. The retirement age is currently 63 years for men and 58 years for women. The amount of the state pension received depends on factors such as age, work experience, average salary during working years, and disability status.

Employers

Employers in Belarus are required to contribute to social security, which includes funding for pensions, social insurance, and medical care. These contributions are mandatory and represent a significant portion of the total compensation costs for employers.

Employers also have the option to provide additional perks and benefits beyond the mandatory requirements. These optional benefits can include private health insurance, accident insurance, wellness programs, and life insurance.

Self-employed

Self-employed individuals in Belarus are responsible for making social insurance contributions based on their declared income. The minimum monthly earnings used to calculate these contributions are the legal monthly minimum wage. Self-employed contributions fund various benefits, including sickness, maternity, funeral grants, unemployment benefits, and family allowances.

Tax on salary increments

In Belarus, employers are responsible for withholding income taxes on locally paid salaries and filing them the following month. The payroll tax rate is fixed at 13% of employees' income, and employers must also withhold 1% of employee salaries for statutory social security contributions, such as pension funds.

When it comes to salary increments, employers in Belarus are allowed to provide yearly bonuses and increments in base income upon employee appraisal. These increments are subject to the same flat tax rate of 13% on personal income. This means that if an employee's base income increases, their taxable income will also increase, resulting in a higher tax liability on the additional income.

For example, let's consider an employee with a monthly base salary of 1,000 BYN. The employer decides to provide a yearly increment of 10%, increasing the base salary to 1,100 BYN. The additional 100 BYN will be subject to the 13% tax rate, resulting in a tax of 13 BYN on the increment. Therefore, the employee's total tax liability for the year will increase by 156 BYN (13 BYN per month).

It is important to note that the tax rates and regulations in Belarus may change over time, and employers should stay updated with the latest information from the Tax Administration in Belarus to ensure compliance with tax laws. Additionally, there may be other factors that impact the taxation of salary increments, such as deductions, allowances, and other benefits included in the employee's compensation package.

To ensure accurate payroll calculations and compliance with tax regulations, employers in Belarus should consult with tax specialists or utilise payroll software solutions that can help them stay up-to-date with the latest tax rates and calculations.

Salary deductions

Personal Income Tax

Also known as PIT, this is imposed on the income of individuals. The tax applies to wages, salaries, and other forms of personal income. The standard rate for this is 13%, although it was previously as low as 12% and as high as 30%.

Value-Added Tax (VAT)

VAT is a consumption tax applied to the value added at each stage of production and distribution of goods and services. The standard rate is 20%, although there are some goods and services that are exempt, including financial services, insurance services, and medical services. A reduced rate of 10% applies to sales of crops, sales of store cattle, and sales of fish and hive products produced in Belarus.

Excise Tax

This is levied on specific goods deemed harmful or luxurious, such as alcohol, tobacco, and fuel. Duties are collected per taxable item at fixed amounts varying between BYN 0 to BYN 481.08.

Social Security Contributions

Both employers and employees in Belarus are required to make social security contributions. These fund various benefits, including pensions, health insurance, and unemployment benefits. Social security contributions payable by the employer amount to 34% of the gross salary (28% pension insurance and 6% social insurance). Self-employed individuals and individual entrepreneurs must make contributions for pension insurance at a rate of 29% and for social insurance at a rate of 6%.

Property Tax

This is levied at a rate of 1% on all types of buildings and installations (including car parks). The property tax is also levied on agricultural land, with rates ranging between 0.05 BYN and 15.31 BYN per hectare.

Other Taxes

Other taxes in Belarus include stamp duties, notary and consular fees, and environmental taxes. There is also a tax on the extraction of natural resources, as well as a collection or acquisition tax on wild plants, mushrooms, or raw materials of floral origin (at a rate of 5% maximum).

Frequently asked questions