However, locally it’s common knowledge that the majority of the population (except for those who live in major cities or work in severe conditions in remote regions) have never enjoyed such an income. Yes, earning $534 per month would be a dream come true for a lot of regular Russians working 8-hour shifts 5 days a week.
How come? Today we are going to solve this puzzle with insights from Newizv.ru.
Why official numbers for monthly wages in Russia are nearly double of what locals really earn
A great number of people in Russia consider 15,000 ruble ($265) to be quite a good monthly salary.
It’s rather bewildering taking into account that officially typical wages exceed 30,000 ₽ ($534).
Let’s see what’s wrong with it.
- According to the report by Rosstat for the year of 2016, average salaries in the Russian Federation reached 36,476 ₽ ($650).
- However, if we considered those who are not involved in the corporate sector, a 12% decrease can be noticed: From 36,746 ₽ ($653) to 32 667 ₽ ($578).
- Rosstat asserts that the income of wage earners is 10% less than the average one for the country. Thus, if managers’ wages were deducted from the total amount, workers’ earnings would show another 10% decrease.
Let’s count: 32,667 ($578) – 10% = 29,400 rub ($520)
Don’t forget about the personal income tax, which is 13%.
29,400 – 13% = 25,580 rub ($450)
$450 is the real average amount workers take home after taxes.
But this data is true for the whole country in general.
To understand how much people earn in most regional cities and towns, we need to exclude Moscow, St. Petersburg and 2 autonomous districts that are Russia’s main sources of oil and gas production (KhMAD and YNAO), which offer employees higher pay for working in extremely harsh conditions. For instance, Moscow’s employees get on average over USD 1000 monthly.
72,200,000 people in the Russian Federation are reported to be employed.
To get closer to actual numbers, we are going to exclude those who work as managers (6,253 million people), businessmen (4 million), and 12 million employees from Moscow, St. Petersburg, KhMAD and YNAO, who enjoy advanced remuneration.
If we do it, the average numbers show another decrease. Now earnings only reach 21,233 ₽ ($376). Such are average monthly paychecks of 50 million employees in Russia.
Let’s deduct the income tax. With this, the median take home income turns out to be around 17,000 ₽ ($300).
It actually means that half of the people who are employed (which is 25 million people, by the way) have to live on less than 17,000 ruble ($300).
Now everything is clear.