Who Needs Our Payroll Services?
Our payroll services are ideal for foreign entrepreneurs, e-residents, and international companies operating in Estonia. Whether you manage a remote team, employ local staff, or simply need compliant payroll without hiring an in-house specialist, LKS Consult ensures accurate salary processing, tax declarations, and reporting — all handled efficiently and in full compliance with Estonian law.
- E-residents hiring their first employees in Estonia
- Small businesses without in-house HR/payroll staff
- Growing companies scaling their workforce
- International companies with Estonian subsidiaries
- Startups focused on growth, not administration
- Remote-first companies with distributed teams
- Companies looking to reduce payroll costs and risks
LKS Consult
Our Bookkeeping Services Include
Monthly Salary Calculations
We handle all aspects of salary processing for your Estonian employees:
- Gross salary calculations based on employment contracts
- Net salary determination after all deductions
- Overtime and bonus calculations
- Holiday pay and sick leave compensation
- Pro-rated salaries for partial months (new hires, terminations)
- Fringe benefits and benefits-in-kind calculations
- Expense reimbursement processing
- Salary payment preparation with detailed payslips
Our calculations comply with Estonian labor law, collective agreements, and individual employment contract terms.
Tax and Social Security Declarations (TSD)
Timely and accurate tax reporting is critical in Estonia. We ensure full compliance:
- Monthly TSD preparation and submission to Estonian Tax and Customs Board
- Income tax (22%) calculations and reporting
- Social tax (33%) declarations
- Unemployment insurance contributions (employer 0.8%, employee 1.6%)
- Funded pension contributions (II pillar) – 2% employee contribution
- Quarterly unemployment insurance reports
- Annual income tax statements (Form TSD) for employees
- Handling tax queries and communications with authorities
All declarations are submitted electronically before the 10th of each month, ensuring you never miss a deadline
Employment Contract Preparation in Estonia
We help you establish proper employment relationships from the start:
- Drafting employment contracts compliant with Estonian Employment Contracts Act
- Fixed-term and indefinite contracts
- Part-time and full-time employment agreements
- Remote work contracts for employees working abroad
- Contract amendments and annexes
- Probation period clauses
- Non-compete and confidentiality agreements
- Termination agreement preparation
- Review of existing contracts for compliance
All contracts are prepared in Estonian (legally required) with translations available in English or Russian.
Unemployment Insurance and Pension Contributions
We manage all mandatory social contributions:
- Unemployment insurance registration for employees
- Monthly contribution calculations (2.4% total: 0.8% employer, 1.6% employee)
- Funded pension (II pillar) enrollment and management
- Voluntary pension (III pillar) coordination if offered
- Contribution payment processing
- Annual reconciliation of all social contributions
- Employee queries about pension and insurance
We ensure all contributions are calculated correctly and paid on time, protecting both you and your employees.
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Creating Success
Why Choose LKS Consult for Payroll?
Whether you’re a small business owner seeking guidance on tax optimization, a startup in need of comprehensive financial planning, or a large corporation looking for strategic financial insight, our team of accountants is here to support you every step of the way.
Estonian Labor Law Expertise
Estonian employment legislation changes frequently. Our team stays current with: Minimum wage updates (€820 gross in 2025), Tax-free income thresholds, Social contribution rate changes, New labor law requirements, Holiday and leave entitlements
Zero Errors, Zero Penalties
Payroll errors can be costly: Late TSD submissions: penalty of €64-320. Incorrect tax calculations: back taxes plus interest. Unhappy employees: late or incorrect payments. With our systematic quality control and experienced team, we eliminate these risks.
Multilingual Payroll Support
We provide payroll services in Estonian, Russian, and English: Communicate with your international team in their language. Provide payslips in preferred language. Explain Estonian payroll concepts clearly. Handle employee questions professionally
Dedicated Payroll Specialist
Each client works with a dedicated payroll specialist who: Knows your company structure and policies. Understands your specific employment arrangements. Provides consistent, reliable service. Is available for questions and urgent matters
E-Residency and Remote Team Expertise
Special experience with: E-resident company owners hiring Estonian employees. Managing payroll remotely from abroad. International employees working in Estonia. Estonian employees working remotely from other countries. Digital nomad employment arrangements.
Confidentiality and Data Security
Payroll data is sensitive. We ensure: Secure data handling and storage. GDPR compliance. Confidential processing of salary information. Access controls and encryption. Regular data backups.
Tax
Estonian Payroll:
Key Facts You Should Know
Salary Payment Requirements
1) Salaries must be paid at least once per month
2) Payment deadline: latest on the 7th day of following month
3) Must be paid to employee's bank account
4) Payslips must include detailed breakdown of deductions
Tax-Free Income
1) Up to €700 per month can be tax-free (depending on annual income)
2) Higher earners receive reduced or no tax-free allowance
Minimum Wage
€886 gross per month (2025) €5.31 gross per hour for hourly workers
22%
Income tax
33%
Social tax
€886
Gross per month (2025)
FAQ
FAQs about payroll services in Estonia
Contact us today for a consultation, and discover the difference that our team of expert accountants can make for your business or personal finances. Your success is our success, and we look forward to being a part of it.
For each pay period, we need:
- Work hours or confirmation of regular hours
- Overtime hours (if any)
- Bonuses, commissions, or one-time payments
- Sick leave or vacation days
- Any changes to employment status
We establish a simple process for providing this information each month.
Estonian law requires salary payment by the 7th day of the following month. Most companies pay between the 1st-5th. We work with your preferred payment schedule and ensure timely processing.
No problem. We calculate pro-rated salaries based on actual working days. We just need the employment contract and start date at least 3 days before the salary payment date.
Yes. We can manage payroll for:
- Permanent employees
- Fixed-term contract employees
- Part-time workers
- Temporary workers Note: Independent contractors (self-employed) are not on payroll but we can help with proper classification.
This creates complex tax situations. Estonian employees working temporarily abroad may still be on Estonian payroll. Permanent relocation may trigger tax obligations in the other country. We analyze each situation and provide guidance on the proper approach.
Yes. We handle payroll for:
- Estonian tax residents working in Estonia
- Foreign nationals working in Estonia
- Cross-border workers
- Expatriates with special tax arrangements
Each situation requires careful analysis of tax treaties and residence rules.
This creates complex tax situations. Estonian employees working temporarily abroad may still be on Estonian payroll. Permanent relocation may trigger tax obligations in the other country. We analyze each situation and provide guidance on the proper approach.
Yes. We handle payroll for:
- Estonian tax residents working in Estonia
- Foreign nationals working in Estonia
- Cross-border workers
- Expatriates with special tax arrangements
Each situation requires careful analysis of tax treaties and residence rules.
Yes. We handle payroll for:
- Estonian tax residents working in Estonia
- Foreign nationals working in Estonia
- Cross-border workers
- Expatriates with special tax arrangements
Each situation requires careful analysis of tax treaties and residence rules.
We have quality control processes to minimize errors. If an error occurs:
- We correct it immediately
- We handle communications with the employee
- We submit corrected TSD declarations
- We calculate any additional payments or deductions needed
Yes. We can send payslips directly to employees via email or through a secure portal. Alternatively, we can provide them to you for distribution.
We provide:
- Monthly TSD declaration confirmations
- Payment instructions with exact amounts due
- Access to view submissions in Tax Board system
- Annual summary of all taxes paid
You can verify all submissions independently through the Tax Board’s e-service.
Yes. We handle:
- Final salary calculations including unused vacation pay
- Termination payment calculations (if applicable)
- Final TSD reporting
- Preparation of termination documents
- Unemployment benefits information for departing employees
- Keep in mind that accounting regulations and requirements may change over time, so staying informed and seeking professional advice when necessary is crucial to ensure compliance and financial success in Estonia.
Additional Payroll-Related Services
Employee Benefits Administration
- Fringe benefits taxation and reporting
- Company car benefits calculations
- Meal and transportation benefits
- Training and education benefits
- Health insurance coordination
Expatriate and International Payroll
- Tax equalization calculations
- Split payroll arrangements
- Foreign tax credit optimization
- Compliance with international tax treaties
HR Administration Support
- Vacation day tracking and reporting
- Sick leave documentation
- Performance bonus calculations
- Commission structure setup
Payroll Audits
- Review of existing payroll processes
- Identification of compliance issues
- Historical payroll corrections
- Process improvement recommendations
