Business-trip accounting is not just a pile of tickets. Before payroll closes, the employer must decide whether the journey is a genuine business trip, which calendar days qualify for daily allowance, and which costs require receipts. The distinction matters most when an employee travels more than once in the same month: the higher tax-exempt ceiling follows the employee's first 15 qualifying days in that calendar month, not each new booking.
Based on my work with Estonian payroll files, I use the EMTA business-trip framework in three stages: classify the trip, calculate the daily allowance, then reconcile the written decision with the travel documents. The worked example below shows how a 19-day month produces a maximum tax-exempt allowance of EUR 1,285 without turning the process into another checklist.
First decide whether the trip is domestic or foreign
An employee is on a business trip when the employer sends them to perform duties outside the agreed place of work. A journey between home and the place of work written into the employment contract is not a business trip. If the employee's normal workplace is already abroad, travelling there to do the usual job is not automatically a foreign business trip from Estonia.
The tax treatment then splits in two. Tööelu confirms that an employer cannot pay a tax-free daily allowance for a trip within Estonia. The employer can reimburse necessary and reasonable travel, accommodation and task-related costs when the business purpose and expense documents are clear. A separate domestic per diem is treated and declared as salary.
A foreign trip can qualify for daily allowance when the foreign destination is at least 50 kilometres from the boundary of the settlement where the agreed place of work is located. This distance rule and the actual place of work should be checked before the calculation begins.
Use the rate and day rules in the right order
From 5 July 2025, the minimum foreign-business-trip daily allowance for an employee is EUR 40 per day. In 2026, the tax-exempt ceiling remains EUR 75 for the first 15 qualifying days, but no more than 15 days in one calendar month, and EUR 40 for every later qualifying day. The Business Trip Regulation also sets the departure and return timing rules.
The departure day qualifies if the vehicle travelling abroad leaves no later than 21:00. The return day qualifies if the vehicle arrives after 03:00. When one foreign trip ends and another starts on the same calendar day, only one daily rate is paid for that day.
| Situation | 2026 treatment | What controls the result |
|---|---|---|
| Foreign trip, first 15 qualifying days in the month | Minimum EUR 40; tax-exempt up to EUR 75 per day | Employee-level monthly day count |
| Foreign trip after day 15 in the same month | Tax-exempt up to EUR 40 per day | Earlier foreign trips in that month |
| Trip within Estonia | No tax-free daily allowance | Documented reasonable business costs |
| Free meals at the destination | Employer may reduce the chosen allowance by up to 70% | Written decision and actual meal provision |
Worked example: two trips and 19 days in July
Assume an employee completes a seven-day foreign trip early in July and a twelve-day foreign trip later in July. All 19 days meet the distance and travel-time conditions. The employer has chosen to pay the maximum tax-exempt amount and no free meals are provided.
The first trip uses seven of the employee's 15 higher-rate days. The second trip can use the remaining eight higher-rate days; its final four days fall under the EUR 40 ceiling. The trip boundary does not restart the 15-day count.
| Part of July | Calculation | Maximum tax-exempt amount |
|---|---|---|
| First 15 qualifying days | 15 × EUR 75 | EUR 1,125 |
| Remaining 4 qualifying days | 4 × EUR 40 | EUR 160 |
| Total for 19 days | EUR 1,125 + EUR 160 | EUR 1,285 |
The same monthly logic applies when trips cross a month-end: the 15-day count starts again for the new calendar month. EMTA publishes examples for consecutive trips and trips spanning two months. Any amount paid above the applicable ceiling is taxed as employment income.
The accounting file must explain the payment
Before payment, the employer should issue a written decision that identifies the traveller, destination, duration, business task, reimbursable costs and foreign daily-allowance rate. A calendar invitation or bank transfer alone does not establish all of those facts.
After the trip, the accountant should be able to connect that decision to tickets, accommodation invoices, other reasonable expense documents and the employee's expense report. Daily allowance itself does not require meal receipts, but travel and accommodation reimbursements need evidence. Foreign-currency costs should retain the original document and the exchange-rate basis used in accounting.
The strongest file tells one consistent story: where the employee went, why the company sent them, when the qualifying travel began and ended, what the company reimbursed, and how much of the allowance remained within the monthly ceiling.
Free meals and board members need separate judgement
If free meals are provided at the destination, the employer may reduce the chosen foreign daily allowance by up to 70%. This is not an automatic calculation: the employer should know that meals were actually provided and record the reduced rate. Paying full daily allowance and also covering ordinary meals can create a fringe-benefit question.
A legal entity may also send a board member on a business trip. The company is not required under employment law to pay the board member daily allowance, but if it chooses to pay, the same tax-exempt ceilings can apply when the trip is properly documented. For owner-managed companies, the business purpose and decision should be especially clear rather than reconstructed after the transfer.
The calculation usually fails before anyone opens a calculator. If the agreed place of work, written trip decision or earlier trips in the month are missing, the number cannot be defended. I prefer to settle those facts before tickets and allowances reach payroll.
A clean business-trip calculation starts with the employment facts, not the receipt total. Separate domestic from foreign travel, track the first 15 qualifying days across the whole month, and make the written decision agree with the tickets and expense report. Related topic: Board Member Salary vs Dividends in Estonia.
If you want Accounting Resources to review recurring travel reimbursements or payroll treatment before the next payment run, describe the travel pattern through our contact form.