Both the employer and the employee need to know the differences between an employment agreement and a work contract.
In the first case, an individual or legal entity will be able to save significantly in the process of hiring one or more persons to perform any work. Secondly, this knowledge will help protect against unscrupulous employers who often use similar techniques to save on taxes and social guarantees. Today we’ll talk about the difference between a contract and an employment agreement, examining all the main differences between the documents.
What is the difference
It is important to remember that current legislation allows registration official relations between the employer and the hired worker on the basis of both documents. However, the difference between them is very great. First of all, it is worth focusing on regulating relationships:
- The conclusion of an employment agreement is regulated by the norms of the Labor Code Russian Federation.
- The contract is concluded based on the norms of the Civil Code of the Russian Federation.
Accordingly, the regulation of relations is carried out using various documents, with all further consequences. Let's look at the most significant differences.
An employment agreement, unlike a contract, burdens both parties with a number of responsibilities. Thus, it must indicate that the employee works in the company in some position. He must follow all the rules internal regulations, and he may be subject to disciplinary action for failure to fulfill any obligations. The employment agreement specifies the following information:
- details of the hired worker;
- details of the person or company that is the employer;
- date of commencement of the parties' fulfillment of their obligations;
- position and qualification category employee;
- rights and obligations of the parties;
- harm and danger of working conditions with all appropriate concessions and compensations;
- terms of payment for the employee (salary, bonuses, additional payments, compensation, etc.);
- social insurance;
- rest conditions (if they are different from other employees of the institution).
The most important obligations of the employer are to provide optimal wages (not lower than the minimum required by law) and provide conditions suitable for the performance of work. In accordance with the norms of the Labor Code of the Russian Federation, the company is obliged to maintain all necessary documentation, report to the Federal Tax Service, make the necessary transfers. Also, a hired worker under an employment agreement is able to obtain the right to certain social guarantees. In addition, the employer cannot release an employee from his position without a special procedure.
As for the contract, it is much more loved by employers, since it is a much less troublesome matter. If an agreement of this kind is concluded, the employee is not provided with any compensation at all, which is guaranteed to him by the Labor Code of the Russian Federation. And the principles on which documents of this kind are based. The contract does not force the company to perform whole line obligations, we list some of them below:
- the institution is not obliged to constantly provide the employee with work or compensate him for the time he was inactive;
- the contract does not force the enterprise to provide the employee with annual paid leave and exempts him from a number of payments specified in the Labor Code of the Russian Federation upon termination of the agreement;
- the company does not need to register social guarantees (for example, in the form of sick leave compensation), transfer money to the Compulsory Medical Insurance Fund, the Pension Fund of the Russian Federation, or other departments;
- the contract does not force the company to transfer the money earned by the employee on a set day. The employee cannot demand compliance with these standards in court and compensation for late payment of money.
These are not all the nuances that distinguish a contract from an employment agreement. Main principle Such documents are the result of activity, but not its process. The employer does not care how exactly the employee will achieve the desired result. At the same time, the company cannot control compliance with the work schedule and does not have the right to demand compliance with the staffing schedule. Accordingly, minimal liability and no need to work large quantity payments to a variety of funds make the agreement much more profitable for the company than for the employee.
Comparison table of documents
So, above we have listed some differences between a work contract and an employment agreement. Let us systematize all the information listed and briefly present it in the table below.
| Characteristic | Contract of employment | Work agreement |
| Regulation | Labor Code of the Russian Federation | Civil Code of the Russian Federation |
| The essence of the agreement | The employment agreement directly regulates the process of the employee’s activities. | A contract agreement only implies obtaining a result from an activity. |
| Nature of work | The employee is assigned a certain labor function that he is obliged to perform. | The employee’s task is to perform some type of work, regardless of the function and method chosen. |
| Deadlines | The employment agreement is signed by the parties for an indefinite period. Exceptions to the rule are provided for in Art. 59 of the Labor Code of the Russian Federation, in accordance with it, it is possible to sign short-term contracts with creative workers labor agreements(no more than 5 years). | The contract is concluded for a strictly defined period, which is necessary to solve the task. |
| Work order | Employees are required to adhere to the established work schedule. During this time, the employee must be directly involved in his or her professional activity. The company must provide everything the necessary conditions to perform the direct duties of a hired worker. At the same time, the agreement specifies time for rest and vacation. | The contract does not provide for the need to control the employee. The contractor is responsible for his immediate responsibilities, independently determining work time, rest and vacation. The second party has no right to control the work. |
| Payment procedure | Funds are accrued primarily for the performance of their immediate duties. The company must pay the employee's salary until termination employment contract. Payments are made within a specific period. The amount of remuneration is specified in the contract, but the amount cannot be less than the established amount minimum size(minimum wage). In case of destruction of the results of work, the company is responsible. The amount that the institution is forced to pay is specified in the agreement. | Often, funds are transferred after the completed order is submitted. Sum Money, which can be transferred to an employee, is not limited by law. In case of destruction of work results, responsibility rests directly with the employee. |
| Social insurance | The employer is obliged to comply with the requirements of the Labor Code of the Russian Federation regarding all standards social insurance. If an insured event occurs to an employee, he has the right to receive a certain material support in an amount not less than that provided for by the Labor Code. The company’s responsibility is to regularly transfer payments to the Compulsory Medical Insurance Fund and the Pension Fund. | When concluding a contract, an employee cannot demand that the employer make transfers to the Compulsory Medical Insurance Fund and the Pension Fund of the Russian Federation. Other types of social insurance may be provided if provided for by the terms of the contract. |
When applying for a job, some employers offer to enter into a non-compliance agreement. an employment contract, and a contract. Is such an offer legal? And will the execution of a contract constitute official employment? We answer these and other questions in our article.
What is the difference between an employment contract and a contract?
is an agreement between an employee and an employer, which is concluded on the basis of the Labor Code.
Work agreement- also called an employment contract, a civil contract with an individual. This is a civil contract concluded between two parties, one of which undertakes to provide work and pay for it, and the other party undertakes to perform it. A work contract is an agreement that is drawn up in accordance with the Civil Code.
An employment contract is different from a contract exactly as much as butter different from olive. All oils, but completely different, are called butter - one is spread on bread, the other is used for frying.
It’s the same here: based on the employment contract, it begins work activity employee, and on the basis of a contract, civil legal activity begins. In fact, according to civil contract the employee acts as a separate person (albeit an individual).
Why do they enter into a contract rather than an employment contract?
The conclusion of an employment contract entails certain consequences: the employer is obliged to pay taxes for the employee (that is, act), must provide vacations, sick leave is paid if he is on sick leave, and it is also impossible to fire a person without reason.
When concluding a contract, the customer (the one who pays for the work) is not obliged to provide any additional guarantees to the contractor (the one who undertakes to perform the contract). If, for example, the contractor gets sick, then this does not affect the customer in any way and the work must be completed on time. None are paid either.
Thus, it is not profitable for a person who wants to find a job to enter into work agreement.
It is possible to conclude a contract when a person is already working on the basis of an employment contract. This option is beneficial when you need to do some one-time work, but the employer does not want to arrange part-time work.
It must be remembered that when concluding contract agreements it must be remembered that individual itself is responsible for paying taxes, contributions and other payments. In this case, the contractor (employee) will have to handle all the paperwork himself.
Is it worth concluding a contract?
If a person is looking for permanent job, then him it is unprofitable to conclude work agreement , because the employee does not receive any protection provided for by the Labor Code. If a person is looking for a part-time job or is ready to participate in a one-time project, then it is possible to conclude a contract; this will be official work, for which the employee himself will be responsible to the state (taxes).
For employees, an employment contract that protects the interests of the employee is more reliable. For employers, a contract agreement is beneficial.
What is an employment contract?
Such a term as an employment contract or contract labor contract does not exist in Labor Code RF, nor in the Civil Code. If an employer proposes to conclude such an agreement, then most likely it is proposed to conclude not an employment contract, but work agreement, which is clearly disadvantageous to the employee.
Then we move on to specific questions, such as possible risks and liability of the parties. The text also contains references to the main regulatory articles.
Concept
What is a contract employment contract?
Work agreement- this is an agreement to carry out work that has pronounced material character. It means that the scope of work is known and defined from the very beginning.
The final result can only be a specific material thing.
The provision of a service cannot be included in the contract.
The main provisions are determined .
There are two parties to the agreement - the customer and the contractor.
The contractor is the performer, the customer pays for the work.
In fact, the customer is the employer, although there are some comments here.
Mostly in a row regulated by the Civil Code, but is supplemented by legislation from other areas.
These include: consumer rights, laws on investment activities and others.
Peculiarities
There are indeed many differences from an employment contract.
At its core a contract agreement is much closer to a one-time purchase and sale than to contract work.
The result of the task is always the creation of a material thing or a change in its properties.
Creation example: creating a wooden doll from a piece of wood.
Example of change: painting a doll blue.
The service cannot directly result from the agreement. The creation of physical documentation is the closest equivalent to the provision of services. The result must be material in one way or another, otherwise it goes beyond the boundaries of the contract.
Attention! not only the creation/processing/improvement of a thing can be the customer’s task. Destruction and disposal may also be included in the task.
Distinctive aspects
What is the difference between an employment contract and a contract?
The difference between a contract agreement and an employment contract: it begins with the fact that the contract agreement regulated not by the Labor Code, but by the Civil Code.
Work agreement - by no means a normal working relationship.
Financial liability has a completely different structure. According to Article 723 of the Civil Code, in case of damage and performing work of inadequate quality, the contractor must fully compensate for the losses himself. At regular work employees are not always required to bear financial responsibility.
The next difference between an employment contract and a contract is that the contractor is deprived of the opportunity to take sick leave or vacation. The scope of work must be completed in any case.
Personal organization of the work process comes to the fore. It can be said that the contractor has more freedom, but achieving a result, one way or another, stimulates him to actively work.
Is work under a contract included in seniority for retirement?
Attention! Work performed under a contract included in work experience. Consequently, it has a positive effect on the final pension amount.
Civil contracts: a contract is only one of possible types civil law relations.
These also include a contract of agency and paid provision of services.
Useful video
This video explains the difference between an employment contract and a contract:
https://youtu.be/tSY3_rfQyuo
Pros and cons, risks
For the customer: it is profitable for companies to contact a contractor, if you need to do one-time work.
For example, to renovate a room.
It is not advisable to hire builders to the permanent headquarters of a company or enter into a short-term employment contract with them.
For the performer: main disadvantage for an individual is the fact that a contract is not an employment contract.
It follows that the contractor loses many fundamental guarantees, such as the right to sick leave, vacation, and so on.
He has more personal freedom, which means more responsibility. All these shortcomings are compensated if the contract is concluded by a legal entity in which the employee is listed as an ordinary employee.
Highlight three main types of risk:
- Accidental loss of property- the party that provides the tools and materials assumes the risk of accidental loss of property.
- Inability to complete the task is the performer's risk. If the task is not completed, the contractor does not receive payment.
- Increased expenses- customer's risk. The final cost may sometimes exceed the expected price. For a significant excess in cost, two conditions must be met. The first condition is timely warning to the customer. The second condition is a reasoned justification for such an excess.
Types of contract
Eat 4 types of contract. Household and construction in a row, probably are the most common types. The contract can also be arranged for execution design work . The last type is contract work for government needs.
Decor
Parties to the agreement: the main parties are the customer and the contractor.
The customer gives the task and pays for it.
The contractor is the performer.
The executor of a contract may be an individual entrepreneur, an individual, or a legal entity.
Subcontractors are allowed to participate, that is, performers who help in completing the task.
In this case, the main contractor is called the general contractor. An analogue for the customer side is concept of a single customer.
Decor: standard form not provided for by law. The contract must necessarily contain a material result - the creation or modification of any object.
Contract information are not included in the performer's work book. According to the law the customer has no right record information in this document.
The next important element is timing. Be sure to indicate the start and end date. It is allowed to allocate intermediate deadlines - these are control points for completing the task. They are especially suitable for long-term work.
The final cost may not be indicated directly, but by indicating the method of its calculation. Otherwise payment is made based on the level of payment for similar work.
Rights and obligations of the parties
Employer: the customer is obliged provide assistance as provided for in the agreement. In particular, this applies to the provision of materials and tools, if such a clause is included in the contract.
If not proper quality or failure to meet deadlines, the customer has the right to withdraw from the agreement and don't pay for it. You can also demand correction of defects. Next, the customer pays for the work.
Contractor: the main responsibility is completing the task within the specified time frame. The quality must correspond to what is declared.
If defects are found, or the use of low-quality materials, then the performer will be obliged correct the defect at your own expense.
If this is not possible, the customer can terminate the contract and not make payment.
In addition, the contractor is obliged to promptly inform about any difficulties during the work.
Delivery and acceptance of work
Handing over and accepting a task is extremely important element in the contract.
The employer must will appear for reception at the specified time and carry out an inspection.
If obvious defects are discovered, the contractor should be notified immediately.
Hidden defects that cannot be determined during a routine inspection should be noted and then presented to the contractor. In controversial cases, an examination can be carried out.
Termination of an agreement
Termination of the contract is possible. The basis for the customer may be poor quality works, significant excess of planned cost, unreasonable delay in delivery deadlines.
The contractor can also terminate the contract. For example, if the employer was obliged to provide material and equipment for work, but failed to fulfill his obligations.
Conclusion
Work agreement not regulated by the Labor Code, this is its main difference from ordinary working relationships. The basic regulatory principles are established Chapter 37 of the Civil Code.
Particular attention should be paid to the possible risks of a contract (instead of an employment contract) - increased costs, etc. and the procedure for accepting work.
The legislation provides for the registration of employees not only under an employment contract, but also under a civil contract or paid services
Let's consider how things stand with the employer if a contract is drawn up for employees under a civil contract.
The Labor Code requires an employment contract to be concluded with each person hired.
The conclusion of a written employment contract means that the employee works in an organization in a certain specialty, qualification, or position (specified in the employment contract).
The employee must obey the internal labor regulations (come to work on time, etc.); for violating these rules, the employee can be subject to disciplinary action.
Details and conditions that must be in an employment contract with an employee are established by Article 57 of the Labor Code of the Russian Federation:
- surname,
- employee's middle name,
- name of the employer (or last name, first name, patronymic of the employer - an individual);
essential terms of the agreement:
- place of work (including structural unit);
- work start date;
- name of position, specialty, profession and qualifications in accordance with staffing table or a specific job function;
- rights and obligations of the employee and employer;
- characteristics of working conditions, compensation and benefits to employees for working in difficult, harmful or dangerous conditions;
- work and rest schedule (if for a given employee it differs from general rules installed in the organization);
- terms of remuneration (including the size of the tariff rate or official salary of the employee, additional payments, allowances and incentive payments);
- types and conditions of social insurance directly related to work.
The employer, in turn, is obliged to pay the employee a salary, the amount of which cannot be lower than the minimum wage, to ensure proper working conditions (comply with labor protection requirements, etc.).
The presence of employees in an organization requires maintaining personnel documentation (orders, personal cards of employees, work books, etc.).
By concluding an employment contract, the organization, among other things, receives many responsibilities (providing the employee with leave, as well as all other guarantees and benefits provided for by the Labor Code of the Russian Federation). Failure to comply with these obligations results in liability under the Code of Administrative Offenses of the Russian Federation.
Employees under an employment contract cannot be fired at any time without meeting certain conditions.
As you can see, concluding an employment contract with an employee for an organization is a rather troublesome procedure, so employers enter into civil law contracts.
Under a civil contract, the employee is not at all entitled to benefits and compensation under the Labor Code of the Russian Federation, since a civil contract is based on completely different principles than an employment contract.
A civil contract does not burden the employer with a number of responsibilities:
- provide work or pay for downtime;
- provide paid leave after six months or pay compensation upon dismissal;
- pay sick leave;
- pay on time wages;
- terminate the contract only on the grounds provided for by the Labor Code,
- there is no need to pay from the reward insurance premiums on compulsory insurance from industrial accidents and occupational diseases (unless the obligation to accrue them is expressly stipulated by the terms of the contract),
- For these remunerations it is not necessary to accrue UST in the part that is paid to the Federal Social Insurance Fund of Russia.
According to a civil contract, it is not the process of work that is important, but its result, which the employee is obliged to deliver to the customer. Based on this, the employee himself organizes the process of his work. There is no need to set a fixed working day for him. If the employee works under a contract, there is no responsibility for absenteeism, tardiness, etc. there can't even be any talk.
A similar situation occurs with remuneration; under civil contracts, payment is made exclusively for results. Consequently, it is no longer necessary to pay wages every month and the amount of payment is indicated in the contract and is not necessarily tied to the minimum wage.
Under civil contracts, employees do not need to be provided with vacations, paid sick leave, etc., but acts of acceptance and transfer of work (services), documents confirming payment, etc. are required.
In comparison, it turns out that a civil contract is much more profitable for the employer.
But at the same time, an employer who has chosen a civil contract to register employees faces a danger in the form of the court recognizing the contract concluded with the employee as not a civil contract, but a labor contract.
The court can do this either at the request of the labor inspectorate or at the “will” of the employee himself. If the court finds that the employee has not entered into a civil law contract, but an employment contract, the employer will have to issue a work book and provide all the benefits under the Labor Code of the Russian Federation. Including, it will be necessary to pay the employee all unpaid amounts - vacation pay, sick leave, business trips.
The difference between a civil contract and an employment contract is explained in paragraph 3 of the letter of the Ministry of Taxation of the Russian Federation dated June 19, 2001 No. SA-6-07/463 @ “On the direction of clarifications”
To contracts of a civil law nature, the subject of which is the performance of work (provision of services) and remuneration, for which they are subject to uniform taxation social tax(contribution) (with the exception of the part of the tax subject to credit to the Social Insurance Fund of the Russian Federation) includes contracts for the performance of work (rendering services) concluded in accordance with the Civil Code of the Russian Federation.
In accordance with Article 420 of the Civil Code of the Russian Federation, a contract is an agreement between two or more persons to establish, change or terminate civil rights and obligations.
These are the contracts:
- contract,
- rent,
- paid provision services,
- transportation,
- transport expedition,
- storage,
- instructions,
- commissions,
- trust property management,
- agency contract.
Paragraph 2 of Article 421 of the Civil Code of the Russian Federation provides that the parties may enter into an agreement both provided for and not provided for by law or other legal acts.
According to paragraph 3 of Article 421 of the Code, the parties may enter into an agreement that contains elements of various agreements provided for by law or other legal acts (mixed agreement). The relations of the parties under a mixed contract are applied in the relevant parts to the rules on contracts, the elements of which are contained in the mixed contract, unless otherwise follows from the agreement of the parties or the essence of the mixed contract.
Under a civil contract, a specific task is performed individually. The subject of such an agreement is the final result of the work.
For example, under a contract in accordance with Article 702 of the Civil Code of the Russian Federation, the contractor undertakes to carry out specific work stipulated by the contract on the instructions of the customer and deliver its results.
Those working under civil contracts independently determine the methods and methods of fulfilling the order. For them, the final result of the work is important - fulfillment of the terms of the contract in proper quality and on time.
Under civil law contracts, one party performs certain types of work or services stipulated by the contract (regardless of qualifications or specialty, as well as position) for the other party.
Civil contracts are concluded in accordance with the requirements of civil law. Such agreements include:
- work agreement,
- contract for paid services,
- contract of agency,
- agency contract,
- copyright agreement.
The procedure for concluding the above agreements, the rights and obligations of the parties are determined by the Civil Code of the Russian Federation.
An organization has the right to conclude a civil contract:
- with an employee of the organization,
- with a person who is not in an employment relationship with the organization.
- An organization has the right to determine under what contract it will employ a person:
- according to labor
- civil law.
Civil contracts with third parties are concluded, first of all, due to the lack of necessary specialists in the organization.
If an organization has entered into a civil contract with an employee who is on the staff of this organization, then the employee must perform the list of work under the concluded contract during non-working hours, otherwise this work is considered a part-time job.
Under civil contracts, payment is made for the final result of work performed or services provided; the fact of completion of work (rendering of services) is confirmed by an acceptance certificate.
A special form of the act of delivery - acceptance has not been established, but it can be drawn up either in any form or using the form that is provided for the acceptance and delivery of work under an employment contract (form No. T-73). The delivery and acceptance form was approved by Decree of the State Statistics Committee of Russia dated April 6, 2001 No. 26. “On approval of unified forms of primary accounting documentation for accounting of labor and its payment” (Form No. T-73 is given in Appendix No. 1).
A civil law agreement must provide for the following points:
- start and end dates of work,
- payment procedure for work;
- list of works (services) that the employee must perform (provide);
- procedure for delivery and acceptance of work;
- requirements for the quality of work;
- liability of the parties for violation of the terms of the contract.
If an employee, under a contract, incurs expenses related to the performance of work, the organization is obliged to reimburse them to the employee; the procedure for paying such expenses and the corresponding amount of remuneration are established in the contract.
Taxation of remuneration under a contract
The procedure for taxation of remuneration under a contract depends on whether the person who works under such a contract is individual entrepreneur or not.
If your employee is an individual entrepreneur, then he must calculate and pay all taxes for himself. Therefore, the organization should not do this.
If the employee is not an entrepreneur, then his remuneration under a civil contract is subject to:
- personal income tax;
- UST (including contributions to compulsory pension insurance), with the exception of that part of it that is transferred to the Social Insurance Fund;
- contributions for insurance against industrial accidents and occupational diseases, if such insurance is provided for in the contract.
Remuneration accounting
Rewards under civil law contracts can include:
- included in expenses for common types activities;
- as part of investments in non-current assets;
- in the cost of acquired inventories;
- as part of non-operating or operating expenses;
- included in deferred expenses;
- included in emergency expenses.
Rewards can be paid from the reserve for future expenses.
The corresponding accounts (20, 44, 08, 10, 91, 97, 99, etc.) should be selected based on the type of work or services performed under the contract.
You should also consider the employee’s attitude towards your organization. So, if the work is performed by an employee of the organization, then the amount of remuneration is reflected in the credit of account 70, and if a person who is not on staff, then in the credit of account 76.
If work under the contract is carried out for the needs of the main (auxiliary, servicing) production, then the following posting should be made:
DEBIT 20 (23, 29) CREDIT 70 (76)
– remuneration was accrued under a civil contract for work for the needs of the main (auxiliary, servicing) production.
If the work is related to the management of an organization (for example, restoration or maintenance accounting), then the accounting entry is made:
DEBIT 26 CREDIT 70 (76)
– remuneration has been accrued under a civil law contract for work related to the management of the organization.
Remuneration for work related to the sale finished products or goods are reflected by the entry:
DEBIT 44 CREDIT 70 (76)
– remuneration has been accrued under a civil law contract for work related to the sale of finished products or goods.
Remuneration under civil contracts can be reflected as part of investments in non-current assets. This should be done if the work involves the creation, purchase, modernization or reconstruction of fixed assets, as well as bringing them to a state suitable for use.
In addition, remuneration for work related to the creation or purchase intangible assets, should also be reflected on account 08:
DEBIT 08 CREDIT 70 (76)
– remuneration was accrued under a civil law agreement for work related to the creation of non-current assets.
If the work is related to the acquisition of inventory items, then the remuneration for them should be reflected as follows:
DEBIT 10 (41) CREDIT 70 (76)
– remuneration was accrued under a civil contract for work related to the acquisition of inventory items.
Remuneration under civil law contracts is included in non-operating expenses if the work performed is not related to the production and sale of the organization’s products. For example, organizing recreation for employees, holding sporting events.
If the work is related to the receipt of operating income (for example, repairs of a fixed asset leased), then the amount of remuneration is taken into account as part of operating expenses.
In any case, this is reflected in accounting by writing:
DEBIT 91-2 CREDIT 70 (76)
– remuneration has been accrued under a civil law agreement, which is included in non-operating or operating expenses.
Extraordinary expenses include remuneration for work to eliminate the consequences of emergency events (for example, natural disaster, fire, etc.):
DEBIT 99 CREDIT 70 (76)
– remuneration was accrued under a civil law contract for work related to the elimination of the consequences of emergency circumstances.
If work is performed under a civil law contract, the costs of which are taken into account as deferred expenses, then the amount of remuneration under such a contract should be reflected by posting:
DEBIT 97 CREDIT 70 (76)
– remuneration has been accrued under a civil contract for work, the costs of which are taken into account as deferred expenses.
In addition, the organization can create a reserve in advance to pay for certain works (for example, for warranty repairs). Then the amount of remuneration under the contract for the performance of these works can be reflected by writing:
DEBIT 96 CREDIT 70 (76)
– remuneration under a civil law contract has been accrued at the expense of the previously created reserve.
Operation: The organization entered into a contract agreement with the employee
IGREC LLC entered into a contract agreement with citizen Petrov, who is not an employee of this organization and is not an individual entrepreneur.
According to the contract, Petrov must carry out routine repairs of small equipment at IGREC.
This work was completed efficiently and within the time period specified in the contract. The reward amount is 20,000 rubles. Employee expenses are confirmed primary documents and amounted to 10,000 rubles.
The contract does not provide for insurance of employee Petrov against industrial accidents and occupational diseases.
"IGREK" pays UST at a rate of 35.6%.
Reflection of transactions in accounting:
DEBIT 26 CREDIT 76
– 20,000 rubles – remuneration accrued under the contract;
DEBIT 26 CREDIT 68 subaccount “Settlements under Unified Social Tax”
– 5,600 rubles (20,000 rubles x 28%) – UST accrued in the part that is payable in federal budget;
DEBIT 68 subaccount “Settlements under Unified Social Tax” CREDIT 69-2
– 2,800 rubles (20,000 rubles x 14%) – accrued contributions for compulsory pension insurance are offset against the payment of unified social tax to the federal budget;
DEBIT 26 CREDIT 69-3
– 720 rubles (20,000 rubles x 3.6%) – unified social tax accrued in the part that is subject to payment to the Compulsory Medical Insurance Fund;
DEBIT 76 CREDIT 68 subaccount “Personal Tax Payments”
– 1,300 rubles ((20,000 rubles – 10,000 rubles) x 13%) – personal income tax withheld from the amount of remuneration to Petrov under the contract minus his expenses;
DEBIT 76 CREDIT 50
– 18,700 rubles (20,000 rubles – 1,300 rubles) – remuneration was given to Petrov under the contract.
Personal income tax
Each organization is required to keep records of remuneration under civil contracts in a special tax card in Form No. 1-NDFL.
For each person (except entrepreneurs) to whom the organization paid remuneration under civil contracts during the year, a certificate is drawn up in Form No. 2-NDFL.
Organizations are required to submit these certificates to the tax office no later than April 1 of the year following the year of payment of remuneration.
An enterprise must withhold personal income tax at a rate of 13 percent from remuneration under civil contracts.
Please note: that the amount of remuneration is not reduced by standard tax deductions. The employee can receive these deductions in his tax office when filing your income tax return for the year.
However, the amount of remuneration can be reduced by professional tax deductions; this is the sum of all documented expenses that the employee made under a civil contract.
In order to receive such a deduction, the employee must write an application.
Unified social tax
If the remuneration that an organization paid under a civil contract does not reduce its profit, then the unified social tax does not need to be accrued (clause 3 of Article 236 of the Tax Code of the Russian Federation). And vice versa, if the costs of paying remuneration are taken into account when calculating income tax, then it is necessary to accrue the Unified Tax.
In accordance with paragraph 5 of Article 237 of the Tax Code of the Russian Federation, the amount of remuneration under copyright contracts, subject to unified social tax, can be reduced by all documented expenses for their execution. If these expenses cannot be supported by documents, then the amount of remuneration can only be reduced by a certain percentage.
Based on paragraph 3 of Article 238 of the Tax Code of the Russian Federation, remuneration under civil contracts is not subject to UST in the part transferred to the Social Insurance Fund.
Accident insurance premiums
Accident insurance premiums should be charged if provided for in the civil contract itself at the rates that the organization applies for its full-time employees.
If the contract does not provide for such insurance, then there is no need to charge premiums.
You can find out more about accounting and taxation in the field of conducting activities under contract agreements in the development of Intercom-Audit CJSC “Contracting”.
Subject as an essential condition of the contract - Consequences of the actual performance of work for the recognition of the subject of the contract as agreed - Legal significance of the agreement of the parties to recognize the contract as not concluded - The basis for the emergence of contract relations in cases where there is no contract or the court recognized it as not concluded, or in other cases cases - Application rules on construction contracts to legal relations arising in the field of construction - The relationship between the construction agreement and the employment contract - The relationship between the construction agreement and supply (purchase and sale) - The relationship between the construction agreement and the contract for paid services - The relationship between the construction agreement and the barter agreement - The relationship between the construction agreement and commission agreements - Types of activities that can be recognized as contract relationships
Relations between a citizen and an organization can be formalized in various agreements. Labor legislation, however, insists that an employment contract must be concluded with the employee.
At the same time, the law does not contain clear criteria that would allow one to accurately distinguish such an agreement from a similar work contract. And yet there is a difference, and a very significant one.
Contracts and employment contracts are no exception. The definition of a contract is given in Art. 702 of the Civil Code, and the employment contract - in Art. 56 Labor Code of the Russian Federation.
Under a contract agreement, one of the parties performs work on behalf of the other and delivers its results, receiving a reward for this.
That is, the responsibility of one party is to create a certain thing according to instructions, and the second is to accept and pay for it.
Under an employment contract, one party undertakes to provide the other with certain work, create conditions for its implementation and regularly pay for it. The second party must personally perform the assigned work and obey the employer’s rules.
Depending on the specifics of the subject of the contract, it is customary to distinguish such varieties as:
- household (things for personal use);
- construction (residential buildings, other buildings and structures);
- to carry out design work (the result will be the creation of documents).
The relationship between an employee and the organization where he works is regulated by the Labor Code.
This document establishes mandatory rules for all aspects of this relationship:
- conclusion of an agreement;
- time of work and rest;
- wages for labor;
- guarantees, compensation;
- material and disciplinary liability, etc.
You can download the texts of the codes here:
Labor Code of the Russian Federation
Civil Code of the Russian Federation (part 2)
The difference between a work contract and an employment contract
The law does not establish clear criteria to accurately distinguish one contract from another. But the ILO Recommendations and the accumulated arbitrage practice still allow them to be highlighted.
The first, perhaps the most important difference lies in the attitude towards the final result.
Without its indication, the contract is not considered concluded - this is an essential condition. The employment contract specifies only the type of work assigned (function, position).
The second difference will be the relationship of power and subordination of the parties.
The contractor, despite the fact that he performs work according to the order, is not a subordinate in relation to the customer. The employee is obliged to obey the employer’s orders and internal rules.
The third feature will concern who exactly will do the work.
In labor relations, this is always the employee himself personally, and for the contractor it is permissible to assign it to someone else. In addition, the employee is always an individual, but the performer can also be an organization.
Peculiarities
| Comparison criteria | Employment contract | Work agreement |
| In what cases does it consist? | When constant or long-term performance of a function is necessary | When it is necessary to create a certain item, perform a certain amount of work |
| Parties |
|
The parties can be any person |
| Sections |
|
|
| Nuances of drafting | Cannot contain conditions that worsen the employee’s position in comparison with labor legislation | The conditions are determined by the will of the parties and may differ from those proposed by law. |
| Deadlines | The start date of work is always indicated. May include either a specific time period or be concluded without specifying a period | The start and end dates of the work are always indicated. Interim deadlines may be specified. |
| How to terminate or change? | Only on the grounds specified in Art. 77 TK | The customer may cancel the contract at any time (Article 717 of the Civil Code). The remaining termination conditions are determined by the contract. |
| Does working time count towards seniority, incl. to the north? | Yes, always. | No. Only if the contract is recognized as an employment contract will the length of service be counted. |
How is it processed?
The contract can be carried out on the basis of an oral or written agreement. Labor Relations are always documented in a written agreement.
Documents required for the conclusion
To conclude a contract, individuals will only need passports, and legal entities indicate all the details and certify the manager’s signature with a seal.
The employer will definitely require the employee to provide:
- passport;
- SNILS;
- work book;
- educational documents.
Entries in the work book
Hiring, the basis for which is an employment contract, must be recorded in the work book.
Contractual relations are not reflected in it.
Payroll and taxation
An employee's salary is paid regularly, regardless of the actual performance of work.
Work under a contract is paid for the final result. Or for each stage of its achievement, if this is noted in the contract.
Both wages and remuneration for performing contract work are subject to personal income tax. The rate is the same – 13%.
This tax is calculated and paid by the employer for the employee. But the contractor fulfills his tax obligations independently.
Examples of contracts can be downloaded here:
Example of a contract
Indefinite employment contract without probationary period
Indefinite employment contract with probationary period
Standard form of a fixed-term employment contract
FAQ
Is it possible to retrain into an employment contract?
Yes, such a possibility exists.
Moreover, the Labor Code (Article 19.1) allows you to do this in several ways:
- at the request of the citizen-executor;
- as prescribed by the Labor Inspectorate;
- By the tribunal's decision.
You can reclassify not only current relationships, but also those that have already ended. But for this you will have to go exclusively to court.
All doubts that arise in the court will be interpreted in favor of the employee, that is, labor relations.
For example, such a sample as a contract employment contract with an individual will still be recognized as an employment contract and not a contract contract.
What is better for an employee - a fixed-term employment contract or a contract?
It is difficult to find a definite answer to this question.
On the one hand, an employment contract, even a fixed-term one, gives the employee certain advantages:
- regular payment regardless of results;
- compulsory insurance in case of pregnancy, disability, accidents, etc.;
- the right to receive guarantees and compensation;
- dismissal only for legal reasons etc.
On the other hand, a contract gives more freedom.
The contractor can:
- choose convenient time, method and pace of work;
- attract other performers;
- refuse the order (without forgetting to compensate such refusal to the other party);
- do not follow the rules adopted by this customer, etc.
When choosing one form of relationship or another, an employee must be fully aware of the consequences of his decision.
To do this, you need knowledge about the differences between an employment contract and others.
Does the labor inspectorate deal with such documents in the event of disputes?
Until recently, resolution of disputes regarding recharacterization of contracts was carried out exclusively in court. However, if the relationship has already been terminated, but there is a need to recognize it as an employment relationship, then a visit to court cannot be avoided.
However, after changes were made to the Labor Code at the end of 2103, other opportunities appeared.
In particular, now the state labor inspector has the right to issue an order to requalify the contract. And the customer (employer) is obliged to do this or appeal the order in court.
The contractor can also go to court if the order has not been fulfilled.
Is it possible to conclude such contracts simultaneously?
The conclusion of an employment contract does not negate the possibility of subsequently concluding civil law contracts with the same organization (for example, to perform work beyond the scope of job description and those of a one-time, temporary nature).
Payment under such agreements is carried out separately.
Is it possible to conclude without a work book?
You can conclude an employment contract without a work book.
For example, if this is the first place of work for a citizen, this is also suitable for part-time workers.
In the first case, the book is issued by the employer after the conclusion of the contract. In the second, the employee may wish to make a record of part-time work and submit the book.
For essential workers employment history- a mandatory document.
When applying for a job, some employers offer to enter into a non-compliance agreement. an employment contract, and a contract. Is such an offer legal? And will the execution of a contract constitute official employment? We answer these and other questions in our article.
What is the difference between an employment contract and a contract?
Employment contract
This is an agreement between an employee and an employer, which is concluded on the basis of the Labor Code.
Work agreement- also called an employment contract, a civil contract with an individual. This is a civil contract concluded between two parties, one of which undertakes to provide work and pay for it, and the other party undertakes to perform it. A work contract is an agreement that is drawn up in accordance with the Civil Code.
An employment contract is different from a contract exactly as much as butter differs from olive oil. All oils, but completely different, are called butter - one is spread on bread, the other is used for frying.
It’s the same here: on the basis of an employment contract, the employee’s labor activity begins, and on the basis of a work contract, civil legal activity begins. In fact, under a civil contract, the employee acts as a separate person (albeit an individual).
Why do they enter into a contract rather than an employment contract?
The conclusion of an employment contract entails certain consequences: the employer is obliged to pay taxes for the employee (that is, act
tax agent
), must provide vacations, sick leave is paid if he is on sick leave, and you cannot fire a person without reason.
When concluding a contract, the customer (the one who pays for the work) is not obliged to provide any additional guarantees to the contractor (the one who undertakes to perform the contract). If, for example, the contractor gets sick, then this does not affect the customer in any way and the work must be completed on time. None
vacation pay
are also not paid.
Thus, it is not profitable for a person who wants to find a job to enter into work agreement.
It is possible to conclude a contract when a person is already working on the basis of an employment contract. This option is beneficial when you need to do some one-time work, but the employer does not want to arrange part-time work.
It must be remembered that when concluding contract agreements It must be remembered that the individual himself is responsible for paying taxes, contributions and other payments. In this case, the contractor (employee) will have to handle all the paperwork himself.
Is it worth concluding a contract?
If a person is looking for a permanent job, then he it is unprofitable to conclude work agreement , because the employee does not receive any protection provided for by the Labor Code. If a person is looking for a part-time job or is ready to participate in a one-time project, then it is possible to conclude a contract; this will be official work, for which the employee himself will be responsible to the state (taxes).
For employees, an employment contract that protects the interests of the employee is more reliable. For employers, a contract agreement is beneficial.
What is an employment contract?
Such a term as a contract labor contract or labor contract does not exist either in the Labor Code of the Russian Federation or in the Civil Code. If an employer proposes to conclude such an agreement, then most likely it is proposed to conclude not an employment contract, but work agreement, which is clearly disadvantageous to the employee.
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