Remuneration of the management board in Estonia


Remuneration payable to a member of the management board with A1/E101

 

With an A1/E101 certificate, a person who works outside the country where he/she has social security insurance can prove that he/she is covered under that country's social insurance legislation for e.g. old age pension, child benefit and unemployment. All European Union countries use A1/E101 certificates. To avoid paying social security tax in Estonia you must present your A1/E101 certificate to Estonian tax authorities.

 

Gross salary

Tax exempt income

Taxable income

Income tax 20%

Social security tax to be paid in Estonia

Employee to receive

Total taxes

Total cost for the employer

1 000 EUR

0 EUR

1 000 EUR

200 EUR

0 EUR

800 EUR (1 000 – 200)

200 EUR

1 000 EUR


Board member's salary to resident or person without A1

Gross salary

Tax exempt income

Taxable income

Income tax 20%

Social security tax 33%

Employee to receive

Total taxes

Total cost for the employer

1 000 EUR

0 EUR

1 000 EUR

200 EUR

330 EUR

800 EUR (1 000 – 200)

530 EUR (200 + 330)

1 330 EUR (1 000 + 330)


From the total cost 1 330 EUR - 60% (800) is received by the employee and 40% (533 EUR) is paid in taxes.