Business trips & daily allowances
Tax-free daily allowances for Estonian business trips abroad: €75 then €40 per day, calculated automatically with the trip order document generated as a PDF.
When someone travels abroad for your company — a client meeting in Helsinki, a conference in Berlin — the company can pay them a tax-free daily allowance (päevaraha) for the trip. No income tax, no social tax, no receipts needed for the allowance itself; what's needed is the paperwork around it.
Arvello records the trip, calculates the allowance at the correct rates, generates the trip order document, and tracks how much of the monthly tax-free quota each person has used. You'll find it under Expenses → Business Trips.
Logging a trip
Enter the destination country — the list is foreign-only, since domestic trips don't qualify — an optional city, the purpose, the start and end dates with the departure time and arrival time back, and the traveller, picked from your people list (see People). Confirm the destination is at least 50 km from where the person works.
Arvello calculates the tax-free allowance automatically from the dates and times: how many days fall at the €75 rate, how many at €40, and the total. It lists any day that earns nothing and why. If the traveller has already used high-rate days on other trips this month, the calculation accounts for that.
Add the trip's other costs — transport, accommodation and anything else — with receipts attached. Unlike the daily allowance, these do need documentation.
Review everything and generate the trip order (lähetuskäsk) — the formal document Estonian rules expect for a business trip, listing the company, traveller, destination, purpose, dates and allowance, with a signature line for the director. Download it as a PDF for your records.
The daily allowance rules
The tax-free rates for foreign trips, as of 2026:
| Days of a trip | Tax-free rate |
|---|---|
| The trip's first 15 days, up to 15 days per calendar month | €75 per day |
| Every other day | €40 per day |
These rates took effect on 1 January 2025. If you're catching up on earlier bookkeeping, a trip dated in 2024 is calculated at the rates that applied then — €50 per day for the first 15 days and €32 after — so backdated trips aren't priced at today's figures. A trip that runs across New Year is calculated day by day, each at the rate in force on that day. Trips starting before 2024 are outside the range Arvello has rates for; it will tell you rather than guess.
The €75 rate has two limits, and Arvello applies both:
- The trip's first 15 days. From the 16th day of a trip, every day is €40, even after a new month starts. A trip from 20 January to 8 February is 20 days: 15 × €75 + 5 × €40 = €1,325.
- At most 15 days at €75 per calendar month, across all of a person's trips. A second trip in the same month starts from wherever the first one left off. Only days that were actually paid at €75 count. Days of a trip past its 15th day don't use up the next month's €75 days.
If a month's €75 days are used up, a new trip starts at €40 but still counts its days from 1. When the next month begins, it gets €75 again until its 15th day. For example, if 4–18 March used up March, a trip from 28 March to 14 April is €40 for 28–31 March, €75 for 1–11 April and €40 for 12–14 April.
A few more facts about how the allowance works:
- It applies to foreign trips only — there is no tax-free daily allowance for domestic travel in Estonia.
- The destination must be at least 50 km from the border of the settlement where the person normally works; the trip form asks you to confirm it. No overnight stay is needed: a one-day trip abroad qualifies.
- The departure day counts if the vehicle leaves for abroad by 21:00, and the return day counts if it arrives back after 03:00. Arvello applies this from the times you enter: leaving on 20 January at 22:00 and back on 22 January at 02:00 earns one day, 21 January. These days still count towards the trip's first 15.
- A day one trip ends and another starts earns one allowance, not two. Arvello gives it to the trip recorded first and leaves it out of the later one.
- The tax-free limit is per day across all employers (per-diem regulation § 6 and § 8 lg 2). Arvello assumes no other employer pays the person a per diem for the same days. If one does, don't record the trip here.
- A written trip order is required; Arvello generates it in step 4.
- No receipts are needed for the allowance itself — it's a flat daily rate. Receipts are needed for everything else.
- Where the host covers meals, the allowance may be reduced by up to 70%.
- Anything paid above the tax-free rates is taxed as the traveller's own pay, not as a fringe benefit. For an employee it's salary (income tax, social tax, unemployment insurance and any II pillar contribution); for someone who is only a board member it's a board-member fee (no unemployment insurance, as a board member isn't insured for it). Arvello records only the tax-free amount on a trip. For an employee, pay any excess through a payroll run, added to their salary. Arvello's payroll can't add it for someone who isn't an employee there, such as a board member only, so declare it on the TSD in e-MTA yourself, as a board-member fee.
Allowance vs salary — the numbers
Because the allowance is free of employment taxes, the same money in the traveller's pocket costs the company very different amounts depending on how it's paid. Take a 10-day foreign trip in a single month: 10 × €75 = €750. As salary, the example assumes an employee whose regular pay already uses their basic exemption and meets the social tax minimum, and who pays 2% into the II pillar.
| Paid as daily allowance | Paid as net salary | |
|---|---|---|
| The traveller receives | €750.00 | €750.00 |
| Gross salary required | — | €997.45 |
| Unemployment insurance (1.6%) | €0.00 | €15.96 |
| II pillar (2%) | €0.00 | €19.95 |
| Income tax (22%) | €0.00 | €211.54 |
| Social tax (33% on gross) | €0.00 | €329.16 |
| Employer unemployment insurance (0.8%) | €0.00 | €7.98 |
| Total cost to the company | €750.00 | €1,334.59 |
The lowest total tax cost is the allowance — €584.59 less for the same €750 received. The trade-off runs the other way too: the allowance only exists for qualifying foreign trips and is capped at the daily rates, while salary has no such constraints. Arvello shows the same comparison, with the same assumptions, on each trip and in the annual summary. For someone with basic exemption left that month the income tax on the salary is different: from 2026 it is lower, so the saving is smaller; in 2024 and 2025, when the exemption shrank as monthly pay rose, extra salary could also cost exemption, so the saving could be larger.
Approving and paying out
A logged trip starts as a Draft, which you can still edit or delete. When you approve it (Approve Trip), the trip and its daily allowance are confirmed and can no longer be edited or deleted. Approving posts nothing to the books yet: the journal entry is created when you match the allowance payment in Banking (type Payment to a Person).
Trips submitted by employees
Employees with an employee login can submit their own trips: the destination, purpose, dates and times, and the 50 km confirmation. Arvello calculates the allowance as it does for a trip you log, counting the person's other trips, and saves the trip as a draft. In the trips list it carries a Submitted by the employee badge until it's approved, and the trip's page says the employee submitted it. Check the dates, times and destination, edit anything that's wrong, then approve it as usual with Approve. Approving works out the daily allowance again from the trip's dates and times, so you don't need to check the amount by hand. Until then the employee can withdraw it. Approving needs a role that manages Expenses; anyone else sees the trip but can't approve it.
Then pay the traveller from the business account as normal. When the payment shows up in your bank feed, reconcile it as a Payment to a Person, pick the traveller and tick the trip — Arvello marks it Paid. One transfer can pay several trips together with the person's net pay and other claims. See Reconciling transactions.