Over the past six years, the number of self-employed people in Russia has increased nearly twenty-two-fold, approaching 17 mln. Researchers argue that this transformation is not merely a short-term response to economic crises, although self-employment has indeed served as an anti-crisis strategy for some. Rather, it reflects a lasting shift by part of the population toward more flexible ways of earning a living. The reasons extend well beyond simply legalising undeclared income. Dissatisfaction with traditional employment, a desire for greater freedom in decision-making and financial independence now rank among the main drivers. As a result, self-employment has become more than just a tax regime that can be altered or abolished without consequence. For millions of Russians, it has become a means of achieving personal autonomy, shifting the issue beyond economics into the realm of politics.
As part of a pilot programme, self-employed workers have gained access to a new form of social protection. The Social Fund of Russia (SFR) announced that the first sickness benefit payments will be made to self-employed participants in August this year.
The payments will go to participants in a voluntary temporary disability insurance scheme who enrolled in January 2026 and began making contributions in February
‘The amount of the benefit depends on the insured sum chosen, either RUB 35,000 or 50,000, as well as the length of the insurance record and the period of participation in the programme,’ the SFR explains on its website. ‘A self-employed person becomes eligible for sickness benefits after six months of paying either the annual contribution or uninterrupted monthly contributions.
The pilot scheme covers only temporary disability payments and does not include maternity benefits, such as those paid during maternity leave or childcare leave for children under 18 months old.
According to the Federal Tax Service (FNS), the number of self-employed people in Russia has increased approximately twenty-two-fold over the past six years, from June 2020 to the end of May 2026, reaching 16.6 mln.
The status allows individuals to work legally for themselves while paying professional income tax. The tax rate is 4% on income received from private individuals and 6% on income from legal entities. Annual income is capped at RUB 2.4 mln. Tax is payable only on actual earnings, meaning that if there are no clients or income, no tax is due. The special tax regime was introduced in 2019 and is scheduled to expire at the end of 2028.
However, interpreting these statistics requires caution. ‘The growth in the number of people registered with the Federal Tax Service reflects citizens’ willingness to formalise their status, but it is not equivalent to an increase in actual employment, since a significant proportion of those registered may not engage in any real economic activity and may report zero income,’ explains Elena Kolesnik, Associate Professor at the Institute of Service and Sectoral Management at Tyumen Industrial University, in her study Diversification of Employment Strategies Through Self-Employment in Russia, which appeared in the latest issue of the journal Economic Policy (published by the Presidential Academy and the Gaidar Institute).
Yet these methodological limitations do not diminish the significance of the changes taking place. On the contrary, they underscore the scale of the transformation in Russia’s labour market. According to Kolesnik, Russia is witnessing the emergence of an entirely new employment landscape, in which the boundaries between conventional wage employment, full-fledged entrepreneurship and various forms of self-employment, including arrangements combined with regular employment contracts, are becoming increasingly blurred.
Her conclusions are based on an analysis of data from the Federal Tax Service and Rosstat, as well as digital traces relating to self-employment, including internet search queries and discussions within an online community for self-employed workers on a social media platform.
The study found particularly high levels of self-employment in remote regions despite their relatively small populations and significant infrastructure constraints.
At the same time, self-employment continues to display a distinctly urban character.
According to the study, the proportion of urban residents among the self-employed rose from 60% in 2022 to nearly 63% by the third quarter of 2025. This trend is ‘entirely natural for large cities, with their concentration of solvent demand, developed digital infrastructure and broader range of activities available to self-employed workers.’
The demographic profile of the self-employed has also changed. Whereas men consistently outnumbered women in 2020–2021, the gender gap began narrowing in 2022–2023, and by the third quarter of 2025 men and women accounted for almost equal shares.
‘This suggests that self-employment is becoming increasingly attractive and accessible for women, offering flexible forms of work that allow them to build individual employment strategies while balancing economic necessity, family responsibilities and professional fulfilment, something especially valuable under conditions of heightened uncertainty,’ Kolesnik writes.
One limitation of the published study, however, is the lack of detailed information about the age and sectoral composition of the self-employed.
Understanding changing employment strategies requires knowing what proportion of self-employed workers are of working age, how they participate in the labour market, which industries they choose, and how many are pensioners who have simply legalised rental income, for example.
‘Among the most common areas of self-employment are construction and renovation, IT services, automotive services and the beauty industry. These are probably dominated by people for whom self-employment is their main occupation,’ Lyudmila Ivanova-Shvets, Associate Professor at Plekhanov Russian University of Economics, told Nezavisimaya Gazeta. ‘Among pensioners, self-employment more often takes the form of renting out property or providing educational services.’
Meanwhile, Yulia Podoksenova, Managing Director at Ancor Consulting, argues that viewing self-employment primarily through the lens of passive income would be misleading. ‘In most cases, these are people who have consciously chosen more flexible and autonomous forms of work,’ she said.
‘Today, self-employment is genuinely creating new patterns of labour behaviour, since the overwhelming majority of professional income taxpayers earn their income through their own economic activity rather than passive ownership of assets.’, Podoksenova adds.
Kolesnik’s study also identified the main reasons why Russians choose self-employment
Somewhat unexpectedly, ‘legalising previously undeclared income and informal employment’ ranked only sixth among all responses, accounting for around 8% of more than 2,200 references to various motivations. It is possible, however, that many respondents were simply reluctant to acknowledge this reason
The leading motivation, cited in more than 19% of responses, was dissatisfaction with traditional employment, including hierarchical workplaces and office routines. Second came the desire for freedom and flexible working hours (more than 15%). Third was the desire for financial independence and control over one’s income (around 13%). These were followed by the need to combine work with family responsibilities or studies (10.5%) and the wish to monetise a hobby or vocation (almost 9%).
Summing up her findings, Kolesnik argues that ‘value-based and psychological motives dominate’ among Russians choosing self-employment. This points to a profound shift in attitudes toward work. Self-employment has become both a means of escaping unsatisfactory employment conditions and a path to personal autonomy.
‘Recent trends show that self-employment has ceased to be either a niche phenomenon or a forced survival strategy. It has become one of the normal channels of participation in the labour market, reflecting changing worker values, growing demand for independence and a willingness to take responsibility for organising one’s own professional life,’ Podoksenova agrees.
Kolesnik also recalls the debate that emerged in autumn 2025 after Economic Development Minister Maxim Reshetnikov addressed the Federation Council. Following his remarks, senators recommended that the government evaluate the results of the self-employment regime and consider ending the experiment early, in 2026 instead of 2028.
Reshetnikov subsequently clarified that the government had no intention of terminating the regime ahead of schedule. However, he argued that discussions should already begin on what would replace it after 2028, including future tax conditions and rates, since any changes would require a period of adjustment. He also stressed the need to prevent employers from disguising standard employment relationships as self-employment arrangements.
Around the same time, internet searches for the phrase ‘self-employment will be abolished’ surged. According to Kolesnik, this spike reflected the public’s sensitivity to institutional uncertainty.
‘Even a proactive and well-considered decision to pursue self-employment as a career strategy does not eliminate workers’ vulnerability to possible regulatory changes. The search query “self-employment will be abolished” reflects not doubts about the chosen path, but fear of external intervention that could undermine an employment strategy people have already built,’ she writes
This highlights a defining feature of today’s increasingly diversified labour market: while the move toward flexible forms of work is voluntary and driven by personal values, it remains heavily dependent on the stability of the institutional environment
‘For a significant proportion of self-employed workers, their strategy remains fragile not because of any internal shortcomings but because of risks associated with possible changes to the rules of the game introduced by the state. The analysis confirms that self-employment is simultaneously a space for proactive self-realisation and an area highly sensitive to regulatory decisions,’ Kolesnik concludes.
This is in addition to the structural risks built into the self-employment model itself. Compared with salaried employees, self-employed workers are more likely to face unstable incomes, a lack of paid annual leave, limited access to social insurance mechanisms and greater exposure to fluctuations in demand, Podoksenova notes. Until recently, they also had no entitlement to paid sick leave.
Several Russian research centres have previously warned that the self-employed are becoming one of the country’s more vulnerable social groups. Researchers have also noted that many are increasingly exhibiting characteristics of precarious employment, meaning insecure and unstable social and economic circumstances (see Nezavisimaya Gazeta, May 5, 2026).
Taken together, the issues surrounding self-employment, from social vulnerability to the pursuit of greater autonomy amid growing economic and regulatory uncertainty, are increasingly moving beyond economics into the sphere of politics.
At the same time, as more Russians grow disillusioned with traditional salaried employment, debate over labour shortages has intensified. Economic Development Minister Maxim Reshetnikov recently said in an interview that Russia’s unemployment rate of 2.2% was ‘exceptionally low’. As he put it, labour shortages remain ‘the main constraint on the economy’.
