# Tax-free payments to a board member of an Estonian OÜ in 2026

What an Estonian OÜ can pay its owner as a board member with no income tax and no social tax in 2026: car compensation, per diem and trip costs, health and sport, home office, equipment and training, and what is not tax-free.

Law as of 30 Sept 2026. General information, not advice for your situation.

If you have an Estonian OÜ and are a board member, you can receive a few payments from it, with no income tax and no social tax at all. They aren't loopholes. The law lists them, and each one has its own limit and its own paperwork. Used correctly, they are the cheapest money your company can give you, cheaper than a dividend.

This guide will walk you through the ones that work for a board member in 2026, and the common ones that don't.

**In short**

- A tax-free payment costs the company 100 euros for 100 euros of value. A dividend costs about 128 euros, and a board fee about 174 euros.
- Your own car used for work: 0.50 euros a km, at most 550 euros a month for each company that pays, with a trip log. [More](https://oscaraccountant.com/en/guides/tax-free-payments-board-member#car-compensation)
- Trips abroad: 75 euros a day for the first 15 days of each trip, at most 15 such days a calendar month, then 40 euros a day, plus the documented trip costs. No tax-free per diem inside Estonia. [More](https://oscaraccountant.com/en/guides/tax-free-payments-board-member#per-diem-and-trip-costs)
- Health and sport: 400 euros a year, also in a one-person OÜ. [More](https://oscaraccountant.com/en/guides/tax-free-payments-board-member#health-and-sport)
- Home office: the work share of the running costs, on documents. No flat allowance. [More](https://oscaraccountant.com/en/guides/tax-free-payments-board-member#home-office)
- Equipment for work and training linked to your duties are tax-free. Private use is not. [More](https://oscaraccountant.com/en/guides/tax-free-payments-board-member#equipment-and-training)
- Meals, staff parties, gifts, most insurance and private use of a company car are taxed as fringe benefits. [More](https://oscaraccountant.com/en/guides/tax-free-payments-board-member#not-tax-free)

## Why does a tax-free payment beat a dividend?

Most owners compare a tax-free payment with a salary, and then it looks like a huge saving. The fairer comparison is with a dividend, because that's how most owners take their money anyway. Even against a dividend, a tax-free payment still wins clearly.

What it costs the company to give you 100 euros of value in 2026, when your basic exemption is already used. The pension contribution is counted as a cost here, though it stays in your own pension account.

| Route                        | Cost to the company | What it adds for you                                     |
| ---------------------------- | ------------------- | -------------------------------------------------------- |
| Tax-free payment             | 100.00              | nothing beyond the payment                               |
| Dividend                     | 128.21              | nothing beyond the payment                               |
| Fringe benefit               | 170.51              | nothing beyond the benefit                               |
| Board member fee             | 173.99              | health insurance from the monthly base, funded pension   |
| Salary (employment contract) | 177.94              | health insurance, funded pension, unemployment insurance |

The salary row holds for a salary that is already at least the monthly base of 886 euros. On a smaller salary, the company still pays social tax on at least 886 euros ([Social Tax Act § 2(2)](https://www.riigiteataja.ee/en/akt/525052026001#para2)), so the cost per 100 euros is higher.

A tax-free payment saves 28.21 euros per 100 euros against a dividend. A fringe benefit costs income tax of 22/78 of its value plus 33 percent social tax on the value and that income tax ([Income Tax Act § 4(1¹)](https://www.riigiteataja.ee/en/akt/508052026001#para4) and [§ 48](https://www.riigiteataja.ee/en/akt/508052026001#para48); [Social Tax Act § 2(1)](https://www.riigiteataja.ee/en/akt/525052026001#para2), clause 7), so it is always worse than a dividend. The numbers behind the dividend and the board fee are in [salary or dividend in 2026](https://oscaraccountant.com/en/guides/salary-or-dividend-2026).

The payments below are free of income tax because the Income Tax Act names a board member next to the employee ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clauses 1 and 2), or because it counts a board member as a worker for fringe benefits ([§ 48(3)](https://www.riigiteataja.ee/en/akt/508052026001#para48)). Trip costs, per diems, car compensation and parking are also free of social tax ([Social Tax Act § 3](https://www.riigiteataja.ee/en/akt/525052026001#para3), clause 1). A shareholder who is not on the board cannot use these rules.

## How much can the company pay for the use of your own car?

If you drive your own car for the company, the company can pay you a fixed rate per kilometre with no tax. The rate is meant to cover everything: fuel, insurance, tyres and wear. In return, the paperwork is strict, and the trip log is the first thing an auditor asks for.

- **The limit.** 0.50 euros a km, at most 550 euros a calendar month for each company that pays the compensation ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clause 2). At the full rate, 550 euros means 1,100 km of work trips in the month.
- **The car.** A passenger car in your use that the company neither owns nor possesses. It may belong to your spouse or be leased by you, but your right to use it must be documented (same clause).
- **The decision.** A written decision of the company names you, the amount, and the date or period of the trips, with a copy of the document that shows your right to use the car ([car compensation regulation § 3](https://www.riigiteataja.ee/akt/102072025018)).
- **The trip log.** For each work trip: your name, the registration number, the odometer reading at the start and the end, the date and the purpose ([car compensation regulation § 4](https://www.riigiteataja.ee/akt/102072025018)). There is no longer a flat amount without a log ([§ 6](https://www.riigiteataja.ee/akt/102072025018) is repealed).
- **Not commuting.** The compensation covers trips made for your duties, not the drive between home and your usual place of work ([car compensation regulation § 1](https://www.riigiteataja.ee/akt/102072025018)).
- **Parking.** Parking fees on work trips can be paid on top of the km rate ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clause 2³).
- **Over the limit.** A rate above 0.50 euros a km, or the part above 550 euros a month, is a fringe benefit ([Income Tax Act § 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48), clause 5).

**Two companies.** The 550 euro limit applies for each company that pays. An owner on the board of a holding company and of an operating company can receive up to 550 euros from each. Each company needs its own decision, its own trip log and real trips made for that company. The same kilometres can never be claimed twice. A holding company with no real activity of its own is a risk: the Tax and Customs Board can tax the arrangement by its real content ([Taxation Act § 84](https://www.riigiteataja.ee/en/akt/511082026003#para84)), or treat the payment as a cost unrelated to the business ([Income Tax Act § 51](https://www.riigiteataja.ee/en/akt/508052026001#para51)).

More on company cars and private cars in [cars and private use](https://oscaraccountant.com/en/guides/cars-private-use#how-does-the-tax-free-compensation-for-a-private-car-work).

## What per diem and trip costs are tax-free on a trip abroad?

A real business trip abroad is one of the most valuable tax-free items for a founder, because the per diem is on top of the actual costs. The catch is the word "real": the trip needs a business purpose, a written decision and a document for every cost.

- **The per diem.** 75 euros a day for the first 15 days of each trip, but at most 15 such days in a calendar month, and 40 euros for each further day ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clause 1). The count is per trip, not per month.
- **An example.** A trip from 28.03 to 14.04 lasts 18 days. With no other trip in March, the first 15 days get 75 euros, the last 3 days get 40 euros: 15 x 75 + 3 x 40 = 1,245 euros, all tax-free.
- **When a day counts.** The destination is at least 50 km from the border of the settlement where you normally work. The day you leave counts if your transport leaves at 21:00 or earlier, and the day you return counts if it arrives after 03:00 ([business trip regulation § 4](https://www.riigiteataja.ee/akt/102072025020)). A one-day trip can qualify under the same rule.
- **Trip costs.** Travel, accommodation, a visa, travel insurance, baggage and similar reasonable costs are paid back against documents, with no cap ([business trip regulation § 2(1) and (2)](https://www.riigiteataja.ee/akt/102072025020)).
- **The decision.** The company makes a written decision that names the destination, the length, the task and the rates ([business trip regulation § 2(3)](https://www.riigiteataja.ee/akt/102072025020)). Make it before the trip, and keep the agenda or the meeting confirmations with it.
- **Above the limit.** The part of a per diem above the limit is taxed as pay ([business trip regulation § 9](https://www.riigiteataja.ee/akt/102072025020)).
- **No doubling.** When two companies send you on the same trip, the limit applies to the sum of both per diems ([business trip regulation § 8(2)](https://www.riigiteataja.ee/akt/102072025020)).
- **Inside Estonia.** There is no tax-free per diem for a domestic trip. The company can still pay the documented travel and hotel costs ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clause 1, names the per diem of a trip abroad only).

Holiday days you add to the trip, and the costs of a partner or children who come along, are not trip costs. If the company pays them, they are fringe benefits.

The rule on family members is [Income Tax Act § 48(6)](https://www.riigiteataja.ee/en/akt/508052026001#para48). More on meals, remote work abroad and the records in [fringe benefits and business travel](https://oscaraccountant.com/en/guides/fringe-benefits-travel#per-diem-limits-for-trips-abroad), and the [per diem calculator](https://oscaraccountant.com/en/tools/per-diem-calculator) computes the tax-free amount of a trip.

## Can a one-person OÜ use the 400 euro health and sport limit?

Yes. This is one of the most common doubts, and the law answers it. For fringe benefits a board member counts as a worker, so in a company whose only worker is you, an offer made to you is an offer made to all workers.

- **The limit.** 400 euros per worker per year from the employer, if the employer offers it to all its workers ([Income Tax Act § 48(5⁵)](https://www.riigiteataja.ee/en/akt/508052026001#para48)). The Tax and Customs Board counts the amount with VAT ([EMTA: health and sports expenses](https://emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/fringe-benefits/health-and-sports-expenses)).
- **A board member is a worker.** [Income Tax Act § 48(3)](https://www.riigiteataja.ee/en/akt/508052026001#para48) counts a member of the management board as a worker for fringe benefits.
- **What it covers.** Entry fees of public sports events; the regular use of a sports venue, or massage; the upkeep of the company's own sports facilities; dental care, rehabilitation, psychological therapy, physiotherapy or speech therapy by a licensed provider, and nutrition advice by a certified counsellor; health insurance premiums ([§ 48(5⁵)](https://www.riigiteataja.ee/en/akt/508052026001#para48), clauses 1 to 5).
- **What it does not cover.** Sports gear and clothing are ordinary fringe benefits ([EMTA](https://emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/fringe-benefits/health-and-sports-expenses)).
- **With staff.** A higher limit for the board than for the staff is acceptable only if the staff keep a real chance to use theirs. A cap of 400 euros for the board and 10 euros for the others fails ([EMTA](https://emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/fringe-benefits/health-and-sports-expenses)).
- **Two companies.** The limit is per employer, so an owner on the board of two companies can receive it from each. The holding company risk of the car section applies here too.

More on the reporting in [fringe benefits and business travel](https://oscaraccountant.com/en/guides/fringe-benefits-travel#the-400-euro-health-and-sports-allowance).

## What home office costs can the company pay?

If you work from home, the company can pay you the share of your home's running costs that belongs to the work. What it cannot do is pay you a round monthly sum and call it a home office allowance. Without documents, that's just a board fee, with all its taxes.

- **What it can pay.** The work share of electricity, heating, water, waste, internet and similar running costs, against the bills ([EMTA: company office in the home](https://emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/ariuhingu-kontor-juhatuse-liikmetootaja-kodus)).
- **How to set the share.** In this order: by actual use, by floor area, by time. The Tax and Customs Board accepts 50 percent only as the last fallback, when the share is hard to set (same page). Agree the share in writing before the first payment.
- **What it cannot pay.** The costs of owning the home, such as a loan payment, land tax or home insurance, are always a fringe benefit (same page).
- **A flat allowance.** A fixed monthly sum without documents is a board fee, taxed as pay ([Income Tax Act § 13(2)](https://www.riigiteataja.ee/en/akt/508052026001#para13)).

Another route is to let a room to the company at market rent. That rent carries income tax at the full 22 percent but no social tax. The details, and what it means when you later sell your home, are in [salary or dividend in 2026](https://oscaraccountant.com/en/guides/salary-or-dividend-2026#insured-another-way).

## Are a laptop, a phone and training tax-free?

Equipment that the company owns and gives you for the work is a business cost, not a benefit for you. The tax question starts only when the equipment is used privately, or when you keep it after you leave.

Training works the same way: it's tax-free when it's linked to the job, and taxed when it's a hobby.

- **Equipment.** A laptop, a phone or a desk owned by the company and used for work is not a fringe benefit. Private use of company property is ([Income Tax Act § 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48), clause 2). Keep a written policy that limits the equipment to work.
- **When you leave.** If you keep the equipment, pay the company its market value. A transfer below market price is a fringe benefit ([§ 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48), clause 7).
- **Training.** Courses and studies directly linked to your work or to your duties as a board member are not a fringe benefit. Other courses are ([§ 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48), clause 10).
- **Public transport to work.** The company can pay your public transport tickets between home and work. When the trip cannot be made by public transport at a reasonable cost of time or money, it can also pay your other transport costs tax-free ([§ 48(5¹)](https://www.riigiteataja.ee/en/akt/508052026001#para48)).
- **Workwear and drinking water.** Protective clothing, and workwear that the job requires, are not fringe benefits. Clothes you can also wear outside work are. Plain drinking water at the workplace is not a fringe benefit, but coffee and other drinks are ([EMTA: workplace amenities and drinking water](https://emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/tooolme-joogivesi)).

## Which payments need an employment contract, and which are still unclear?

A few tax-free payments are written for employees under an employment contract only. A board member who has no such contract cannot use them. For three others, the law is not clear about a board member without a contract, and we don't treat them as settled.

Employment contract only:

- **Housing near work**, up to 500 euros a month in Tallinn or Tartu and 250 euros elsewhere, when the home is at least 50 km away and the person owns no closer home ([Income Tax Act § 48(5⁶)](https://www.riigiteataja.ee/en/akt/508052026001#para48)).
- **The company's own costs of transporting you between home and work**, when the home is at least 50 km from the workplace or the company uses a vehicle with at least eight seats or a bus ([§ 48(5¹)](https://www.riigiteataja.ee/en/akt/508052026001#para48), third sentence).

Unclear for a board member with no employment contract:

- **Glasses for screen work** and other occupational health costs. The rules of occupational health and safety are written for employees.
- **A voluntary top-up of sick pay.** The rules of occupational health and safety are written for employees.
- **The birth allowance** of up to 3,500 euros per child, free of income tax only ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clause 7). Social tax still applies to it.

Ask the Tax and Customs Board before you rely on any of these three.

## What is not tax-free?

These are the things owners most often get wrong. Each one is a fringe benefit, which costs the company about 70.5 percent on top of the value, or it's a cost that buys you nothing a dividend wouldn't.

- **Meals and coffee** for you or your staff, including a daily lunch paid by the company ([Income Tax Act § 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48)).
- **A staff-only party.** The tax-free limit for receptions covers guests and business partners only ([Income Tax Act § 49(4)](https://www.riigiteataja.ee/en/akt/508052026001#para49)).
- **Gifts to staff.** There is no small gift limit for your own people ([§ 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48)).
- **Life, pension or accident insurance** that the law does not require ([§ 48(4)](https://www.riigiteataja.ee/en/akt/508052026001#para48), clause 3). Health insurance premiums fit only inside the 400 euro limit.
- **Private use of a company car.** It costs a fixed amount per kW of engine power each month, electric cars included ([§ 48(8)](https://www.riigiteataja.ee/en/akt/508052026001#para48)). See [cars and private use](https://oscaraccountant.com/en/guides/cars-private-use).
- **Third pillar payments by the company.** They are free of income tax up to 15 percent of your taxed pay and 6,000 euros a year ([Income Tax Act § 13(3)](https://www.riigiteataja.ee/en/akt/508052026001#para13), clause 15), but social tax is still due, because [Social Tax Act § 3](https://www.riigiteataja.ee/en/akt/525052026001#para3) does not exempt them. For an owner, this costs more than a dividend.

## What Oscar does

Oscar books the car compensation, per diems and trip costs your company pays, matches each payment with its receipt, and lists the ones that still have no document. It runs the payroll and files the salary tax declaration (TSD). An accountant checks the books. The written decisions, the trip log and the agreement on your home office share stay your job, so keep them with the books.

General information, not advice for your situation. The law as in force on 30.09.2026.

## Let Oscar do the work

Oscar runs your payroll and files the salary tax declaration (TSD) for you.

[Get started](https://oscaraccountant.com/signup)

## Sources

- [Income Tax Act § 4](https://www.riigiteataja.ee/en/akt/508052026001#para4)
- [Income Tax Act § 13](https://www.riigiteataja.ee/en/akt/508052026001#para13)
- [Income Tax Act § 48](https://www.riigiteataja.ee/en/akt/508052026001#para48)
- [Income Tax Act § 49](https://www.riigiteataja.ee/en/akt/508052026001#para49)
- [Income Tax Act § 51](https://www.riigiteataja.ee/en/akt/508052026001#para51)
- [Social Tax Act § 2](https://www.riigiteataja.ee/en/akt/525052026001#para2)
- [Social Tax Act § 3](https://www.riigiteataja.ee/en/akt/525052026001#para3)
- [Taxation Act § 84](https://www.riigiteataja.ee/en/akt/511082026003#para84)
- [Regulation on compensation for using a private car for work, §§ 1 to 5](https://www.riigiteataja.ee/akt/102072025018)
- [Regulation on business trip costs and foreign per diems, §§ 1 to 9](https://www.riigiteataja.ee/akt/102072025020)
- [EMTA: compensation for using a private car](https://emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/isikliku-soiduauto-kasutamise-huvitis)
- [EMTA: foreign per diem (välislähetuse päevaraha)](https://www.emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/valislahetuse-paevaraha)
- [EMTA: business trip questions and answers](https://emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/toolahetuse-kusimused-ja-vastused)
- [EMTA: Health and sports expenses](https://emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/fringe-benefits/health-and-sports-expenses)
- [EMTA: company office in the home of a board member or employee](https://emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/ariuhingu-kontor-juhatuse-liikmetootaja-kodus)
- [EMTA: workplace amenities and drinking water](https://emta.ee/ariklient/maksud-ja-tasumine/tulumaks-ja-sotsiaalmaks/erisoodustused/tooolme-joogivesi)

## Related pages

- [Fringe benefits, staff perks and business travel in Estonia](https://oscaraccountant.com/en/guides/fringe-benefits-travel): How an Estonian company taxes staff benefits, the 400 euro sports and health allowance, home office costs, and tax-free per diems on business trips.
- [Company cars and private cars: fringe benefit and car compensation in Estonia](https://oscaraccountant.com/en/guides/cars-private-use): How Estonia taxes private use of a company car (per kW a month), and how to pay tax-free compensation for a private car with a trip log.
- [Salary or dividend in 2026: what an Estonian OÜ owner keeps, with the numbers](https://oscaraccountant.com/en/guides/salary-or-dividend-2026): What 1,000 euros of company money gives an Estonian OÜ owner in 2026 as a salary, a board member fee or a dividend, why many owners take an 886 euro board fee plus dividends, and when the Tax and Customs Board may see a dividend as pay.
- [Paying yourself as the founder of an Estonian OÜ: board fee, salary and social tax](https://oscaraccountant.com/en/guides/founder-remuneration): How the owner-manager of an Estonian OÜ is paid: the board member fee, a salary, the minimum social tax, health insurance, the basic exemption and the TSD.
- [Estonian per diem calculator](https://oscaraccountant.com/en/tools/per-diem-calculator): Work out the tax-free per diem (päevaraha) of a business trip abroad from Estonia: 75 euros a day for the first 15 days, 40 euros after, and the taxable excess.

Reviewed on 10 Nov 2026. Law as of 30 Sept 2026. General information, not advice for your situation.

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