ORGANIZATION OF PAYMENT FOR TRAINING COMPANY EMPLOYEES AND ITS TAX CONSEQUENCES

Abstract

A skilled workforce is a company’s greatest asset and one of the most important components of success in any business area. Increasing the staff’s efficiency and performance depends on each employee’s qualification level. Today, it is both indispensable and normal for employees to regularly take on-the-job training with higher educational institutions or advanced courses, as well as take part in different seminars and training sessions on occasions. This article deals with problems involving the organization of payment for training company employees. The main modes of organizing employee training programs in terms of professional training, re-training and advanced qualification courses are outlined. This article further covers the list of guarantees and indemnities for employees, who combine work with education in compliance with law, and explores the specific features of agreements entered into with educational institutions with respect to education, training, re-training, and advanced qualification or the provision of additional educational services. The article also describes the guidelines for the recognition of employee education payments in view of their absence in the list of tax differences that are taken into account in income tax calculations. We demonstrate that institutions, with which training contracts have been entered into, are required to have a relevant license for the provision of educational services. This article also describes the terms and conditions for calculating personal income tax and military tax. In particular, tax agents calculate personal income tax on the basis of whether training costs exceed the statutory threshold for the current reporting period, within which personal income tax is not charged for employee training and re-training programs. The excess amount is included as an additional benefit and is taxed on a general basis. Employee re-training or advanced qualification courses for workers employed in blue-collar jobs or other employees does not constitute grounds for imposing personal income tax if such types of training programs are mandatory in compliance with law. Based on the study of employee training costs for companies, a conclusion has been made that such costs are not included in calculations for the integrated social contribution.