r/eResidency • u/IncidentNo3866 • Aug 02 '26

Paying myself a salary?

I've been talking to my accountant about this, she said the following:

- The 'concept' I write when I'm about to transfer the money should be 'employment salary'.

- I must write a report detailing the tasks I carried out and the cost breakdown matching the total amount of the salary I'm paying myself.

I'm an EU citizen living outside the EU space. I understand my salary should not be taxed in Estonia but in my country of residence.

Is there anything else I should know before doing this? I've seen people saying they also pay themselves a little bit of money as 'board member fee' to avoid making it look like they are avoiding paying taxes. I'm doing all of the work on my own, my OÜ is just me.

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u/ivr2132 Aug 02 '26

Investigate how to work on contractual basis in the country you are living (your fiscal residence). Usually this means creating some kind of unipersonal company. Then, charge for your services to the estonian company using this unipersonal company, and pay yourself via that same company as any other contractor in your country does, and obviously pay taxes that way.

The estonian company won't get taxed as this is just cross invoicing for real services provided to the Estonian company. In my experiencia this is the best way to stay compliant everywhere

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u/canyoufixmyspacebar Aug 04 '26 edited Aug 04 '26

salary or board member fee is what a company pays if they need to hire other people to work these roles. if an owner of the company gets the job done without needing to hire anyone, there is no hiring involved and no taxes involved, there cannot be no avoiding of taxes because there never was any intent by the lawmaker to tax an owner working for their own company. hiring other people is taxed, doing your own work is never taxed and it does not even matter if you're a company or a private individual. a private individual can also hire people in which case they would pay all the same taxes a company would on employment (this is practically never done though). in theory, a private individual could also hire themselves, do their dishes as a job for themselves and be taxed accordingly. a company hiring their owner is basically the same absurd situation, there is no reason a company should ever hire their own owner to do their own work

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u/ile4ka88 Sep 07 '26

Your accountant is basically right, and the "no taxes involved" comment above is unfortunately wrong — Estonia does tax an owner working for his own company. Here's the simple picture:

In a one-person OÜ you wear two hats:

  1. The director (board member) who manages the company. Pay for this is called a board member fee and it's taxed in Estonia no matter where you live — 22% income tax plus 33% social tax. Only an A1 certificate (EU/EEA/Switzerland) removes the social tax, so living outside the EU you'll normally pay the full amount.
  2. The worker who does the actual job. Pay for this is a salary, and salary is taxed where you physically do the work. If you're outside Estonia, the Estonian tax office doesn't tax it and doesn't even want it declared — you declare it at home. That's the part your accountant means.

This is why people pay themselves a small board member fee on top: it shows the "director" hat isn't working for free while 100% of the money leaves Estonia untaxed. It's not about hiding anything, it just makes the setup look like what it actually is.

Before you start:

  • Put it on paper: a shareholder decision for the board member fee, an employment contract for the work, and a short monthly note of what you did (your accountant's "report").
  • The board member fee needs a registration in the Estonian employment register before the first payment — your accountant will do it.
  • Check with a local accountant that your home country is OK with an Estonian company being run from there. Some countries will say "the company is actually resident here."
  • Alternative that's often simpler: register as a freelancer at home and invoice your own OÜ for the work, keeping only a small board member fee on the Estonian side.

If you want a plain-English overview of fee vs salary vs dividends for e-residents living abroad, there's one here, for example: https://eestifirma.ee/en/salary-vs-dividends-estonian-ou/