Payroll and the TSD declaration

What exists today

The engine carries the Estonian payroll tables: income tax withholding at 22%, social tax at 33%, the unemployment insurance contributions of the employee and the employer, and the funded pension contribution at the rate the employee has chosen.

Employees and pay runs are recorded in the application. Posting a pay run writes the wage costs and the withheld amounts to the ledger.

What an employee really costs

The rates above are abstract until you see one month. Here is a worked example for the year 2026 with a gross wage of 2,000 euros per month.

Gross wage	2 000,00 €
Employer: social tax, 33 percent	+660,00 €
Employer: unemployment insurance, 0.8 percent	+16,00 €
Total cost to the employer	2 676,00 €
Employee: funded pension, 2 percent	−40,00 €
Employee: unemployment insurance, 1.6 percent	−32,00 €
Income tax: 22 percent after the tax free 700 euros	−270,16 €
Net paid to the employee	1 657,84 €

The employer pays 2,676 euros so that the employee receives 1,657.84 euros. The difference is just over 1,018 euros, about 38 percent of the total cost, and most of it never appears on the payslip because the social tax is charged on top of the gross wage, on the employer side.

Two details are easy to miss. The tax free amount of 700 euros per month is universal from the year 2026, the same for every income level. And the social tax has a minimum monthly base of 886 euros, so even a small part time position costs the employer at least 292.38 euros of social tax each month.

The other side of the bargain: profit that stays in the company is not taxed at all. Estonia taxes company profit only when it is paid out, at 22/78 of the net distribution.

TSD, the monthly declaration

TSD is the monthly declaration of income tax, social tax and contributions. It is due at e-MTA by the 10th day of the following month.

Tasur will generate the TSD declaration file from the posted pay runs, for upload under your own e-MTA login.

TSD declaration file generation for e-MTA upload arriving with the Estonian release

Deeper payroll

The taxation of special benefits and the 22/78 gross-up arithmetic of Estonian payroll belong to the Pro tier plan. Until a feature is in the product, this guide will not pretend that it is.

Projects and time

Hours are recorded as time entries, one by one or in a weekly grid. Entries are submitted and approved, and approved billable hours can be converted into a draft invoice for the customer. Projects collect the entries, so the hours of a job and its invoicing stay connected.