The number of self-employed people in Russia has already topped 16 million. They include employees who combine their main job with officially registered side work, as well as those who have left paid employment altogether to run their own business. The latter face the main risks of this status: uncertain income and a lack of full social protections. Sociologists warn that this second group is becoming one of the vulnerable sections of Russian society. For many, ‘features of precarity are becoming more pronounced’, meaning the insecurity and instability of their social position.
Russia’s self-employed workforce continues to expand. By the end of April, about 16.4 million Russians had registered for self-employed status. That was almost a quarter, or 24 %, higher than on the same date last year
Self-employed status allows people to work legally for themselves while paying tax on professional income. The rate depends on where the income comes from: 4 % on payments from individuals and 6 % on payments from companies. Annual income is capped at RUB 2.4 million. Self-employed workers are taxed only on income they actually receive. If they have no orders and no earnings, no tax is due.
Self-employed status can be combined with regular employment. Someone with a main job, for example, can rent out a flat and declare the income legally. Individual entrepreneurs may also register as self-employed, provided they have no employees and their income remains within the prescribed limit. The status is also available to some foreign nationals, including citizens of Ukraine, Belarus, Armenia, Kazakhstan and Kyrgyzstan.
The special tax regime for self-employed workers is experimental and time-limited. It was launched in 2019 and is due to expire at the end of 2028. What comes next remains open to debate.
Sociologists are already noting that the risks linked to self-employment are becoming more acute. They were discussed at the recent Grushin Sociological Conference in Moscow, whose website published transcripts of the speeches earlier this week.
Damdin Badaraev, director of the Institute for Mongolian, Buddhist and Tibetan Studies at the Siberian Branch of the Russian Academy of Sciences, outlined the position of self-employed workers in the Republic of Buryatia. In the region, they work across beauty, tourism, entertainment, the arts, transport, social and household services, agriculture and IT.
A regional focus-group study identified the main problems facing self-employed workers. Although the research was regional in scope, its findings are relevant to the Russian economy as a whole. The key issues are unstable incomes, a lack of basic social protections and the burden of being responsible for everything: accounting, management, sales and marketing. Respondents also pointed to the risks of unfair pay and exploitation.
Doubts are growing over the merits of this special form of employment. Self-employment may have succeeded in boosting tax revenues by bringing some household income out of the shadows. But it has also given rise to new social and legal tensions
‘Unless substantial changes are made to close gaps in social, medical and legal regulation, self-employment will remain an intermediate and unstable status, and self-employed workers will remain one of the vulnerable groups in Russian society,’ Badaraev said.
Experts interviewed by NG offered several comments on these concerns. Farida Mirzabalayeva, an associate professor at the Plekhanov Russian University of Economics, said that, on the one hand, self-employed workers are indeed highly vulnerable if one considers that they must insure themselves against the risks of losing work, falling ill or becoming unable to work
On the other hand, many self-employed workers are well-paid professionals, including programmers, lawyers and doctors, whose income could in theory allow them to insure themselves against such risks.
Broadly speaking, a self-employed worker who does not pay pension contributions to the Social Fund will be entitled only to a social pension, which is much lower than an earnings-related pension.
The self-employed are not a homogeneous group. ‘Self-employed workers may have several forms of employment. For example, they may also be in regular paid work, in which case their employer pays mandatory insurance contributions on their behalf. Others may already be retired and use self-employed status for side work or to rent out a flat. So the outlook for their future financial position may not be quite as bleak as it seems,’ said Olga Belenkaya, a department head at Finam.
She also noted that measures have been introduced this year to broaden social protections for self-employed workers. From January 1, 2026, an experiment began allowing them to receive temporary disability benefits, including sick pay. But here too there is a condition: they must make voluntary contributions to the Social Fund for at least six months.
The problem, however, is that the focus-group findings cited by Badaraev suggest many self-employed workers view voluntary contributions as a financial burden, rather than an investment in their future or a form of insurance.
Experts have been debating the vulnerability and contradictions of self-employment for several years
‘On the one hand, workers are free to choose their clients and their working hours… On the other, their employment is not guaranteed and they have little protection against either macroeconomic or microeconomic risks,’ Miroslava Tsapko, an associate professor in the sociology faculty at the Russian State University for the Humanities, wrote in a study published as part of the collective monograph The Precariat: The Formation of a New Class.
Remote working, project-based activity and start-ups appear to fit naturally into this form of labour relations, seemingly offering convenience for workers, employers and the state. ‘At the same time, for a significant share of self-employed workers, this form of registration only makes the features of precarity more pronounced,’ Tsapko wrote. Precarity, from the Latin precarium, meaning ‘unstable’ or ‘not guaranteed’, refers to the temporary and insecure nature of a person’s social and economic position.
Zhan Toshchenko, a corresponding member of the Russian Academy of Sciences and an honorary doctor at the Institute of Sociology of the Russian Academy of Sciences, has described the emergence in Russia of a new class: the precariat. He includes in this group people in informal work without employment contracts, temporary workers, part-time workers, those doing seasonal or occasional side jobs, and agency workers, hired by intermediaries and assigned to other companies to carry out orders. Toshchenko also identified freelancers as potential members of the precariat.
It is reasonable to assume that many self-employed workers, regardless of sector or income level, could also be candidates for the precariat because of the uncertainty surrounding their future. The problem is even sharper when employers encourage workers to adopt self-employed status in order to reduce payroll contributions.
‘One of the main features of the precariat is the instability of relationships,’ Mirzabalayeva said
The self-employed status now held by millions of Russians remains experimental. In her view, policymakers should handle this form of employment with great care to avoid pushing self-employed workers back into the shadow economy.
Mirzabalayeva noted, however, that self-employment itself has existed for a long time, albeit under different names and in different forms. It has included informal jobbing workers, craftsmen and people working on private household plots.
ORIGINAL: NG/Self-Employment Emerges as a Source of Instability
