People

Everyone your company pays — board members, employees and shareholders — lives under Payroll & Dividends → People. Arvello uses each person's details to calculate their payroll taxes correctly and to fill in the TSD, the monthly income and social tax declaration filed with EMTA (the Estonian Tax and Customs Board).

One person can hold several roles at once: a typical solo founder is board member and shareholder, and sometimes employee too.

Adding a person

Click Add Person and fill in:

• Name — first and last name, or the legal name and registry code if the shareholder is a company (legal entities can only be shareholders)
• Personal ID code (isikukood) — the 11-digit Estonian identification code, required for Estonian residents and for TSD filing
• Bank IBAN and bank name — where their net pay goes
• Email — used for emailing payslips
• Role(s) — board member (with a start date, and a monthly gross fee if they are paid one — the fee is optional), employee (with a monthly gross salary, start date and position), shareholder (with an ownership percentage)

Under Tax Settings you record what drives the calculation: whether they are an Estonian tax resident, whether they apply the basic exemption with your company (€700 per month in 2026 — a person can apply it with only one employer), their II pillar funded pension rate (2%, 4% or 6%; Arvello offers an automatic check, and if that's unavailable you pick the rate manually), and their payslip language — Estonian or English.

For a non-resident, also choose the country they live in: their payments record it and are declared under it, so Arvello won't calculate payroll for a non-resident without one. Each payroll payment keeps the residency it was calculated with. Changing it here affects draft payroll runs and future payments only: once a run is approved, its payments stay on the TSD annex they were paid under, even if the person later moves to or from Estonia. Correcting a wrong personal ID code, or removing one entered by mistake, is different. If the old code is on approved payments, Arvello asks you to confirm before saving, then corrects it on those payments too. Prepare the TSD return for those months again; a return you've already filed needs a correction. Only change the code to fix a mistake: if it belongs to a different person, add them as a new person. A foreign tax ID stays as it was on past payments, since it changes when someone moves country.

Two further settings cover special cases. If the person is reaching old-age pension age, switch that on and enter the date they reach it (shown in their pension information at sotsiaalkindlustusamet.ee): their basic exemption becomes the fixed pension-age amount (up to €776 per month in 2026, declared on the TSD with code 650 instead of 610) for the whole calendar year of that date, and employee unemployment insurance stops being withheld from the date itself. The Social Insurance Board applies the pension-age exemption to their pension first, so enter only the unused portion as the amount. For employees there is also a minimum social tax setting: by default the employer owes social tax on at least the monthly base (€886 in 2026) even when the salary is lower, but if an exemption from the Social Tax Act applies — the person receives a state pension, raises a child under 3 or three or more children under 19, is a pupil or student, has reduced work ability, or the minimum is covered by another employer — mark them exempt and record the basis.

Employee or board member — the tax difference

Social tax of 33% applies to both, and both carry the II pillar contribution if the person has joined — it follows social tax, not the employment relationship. The difference is unemployment insurance: salaries carry 1.6% withheld from the employee and 0.8% paid by the employer, board member fees carry neither side.

The same €1,000 gross, paid each way in 2026 (resident, €700 basic exemption applied, not in the II pillar). The unemployment premium comes off before income tax is worked out, which is why the salary's tax is the lower of the two:

A 2% II pillar contribution would withhold a further €20.00 from each gross. It also comes off the income-tax base, so each net falls by €15.60 rather than €20.00 — to €918.40 and €905.92.

The board fee costs the company slightly less and pays out slightly more — but the person accrues no unemployment insurance entitlement from it.

What the TSD needs per person

Each payment appears as a row on TSD Annex 1 with the person's ID code, name, a payment type code (salary, board fee, bonus and so on), the gross amount, basic exemption applied, and the income tax, social tax, unemployment insurance and pension figures. Dividend recipients appear on Annex 7 with their ID code (or registry code for companies), net amount and ownership percentage. If the ID code is missing, the return can't be completed — hence the form nagging you for it.

When someone leaves

When a board member steps down, edit the person and set the Board Member Until date. That records the date, but doesn't take them out of payroll by itself: a new run still pre-fills everyone with a board fee or salary set. To stop paying a board member, set their monthly fee to 0 (a fee is optional), or remove their row on the run's payments step before you create the run. For an employee who leaves, remove their row the same way — the person form has no employment end date yet. Their payment history, payslips and past TSD entries stay exactly where they are.

You can also remove a person entirely, but this is permanent and only sensible for someone added by mistake — a person with payment, dividend or home office records is part of your accounting records, which must be kept for 7 years, so they stay on file.