Basics
Can I Use Companio Work in Estonia to Pay Myself a Compliant Salary in My Home Country Without Having a Business There?
Yes. With Companio Work, when you set up a company in Estonia, you can use it to employ yourself in your home country. This means you can pay your social taxes, unemployment benefits, and pension contributions without the need to own a company or be self-employed in your home country.Few readersWhat Is Companio Work And How Does It Work?
Companio Work allows you to hire, pay, and manage international employees for your Estonian company from more than 80 countries. Why Companio Work? As you know, Companio is focused on supporting location-independent entrepreneurs and freelancers throughout their journey, without interfering with your personal tax situations or obligations in your respective countries. While location-independent entrepreneurs may no longer be subject to tax obligations in their home countries (if they areFew readersIs the Employee Hired by Your Company or Companio?
Depending on the specific country, we hire the employee through either one of our local companies or trusted partners. This approach allows us to navigate local regulations and requirements efficiently. "Employer On Record" (EOR) is a key term in our international employment process. Even though our local company or partner technically hires the employee, they officially work for your business. This is all legal and lets us handle all the paperwork efficiently. This EOR approach has sFew readersIs Hiring an Employee Directly Through My Company the Same as Having an Intermediary Involved?
In practical terms, daily operations and routine management are the same, regardless of whether an employee is hired directly by your company or through an intermediary. This means you will oversee their tasks, manage their workload, and make decisions about internal matters such as vacation approvals and workload distribution, always in compliance with the relevant country's labor laws. However, there is a key difference in administrative procedures for things like vacations and sickFew readersHow Much Do I Pay for an Employee With Companio Work?
All employees, including Estonian ones, will be incorporated into the Companio Work system for management and administration purposes. During the first month, you will receive two invoices. We will use a Spanish Customer Support Agent as an example: Regular Monthly Invoices: Every month, including your first month, you will receive a standard invoice covering: Your gross salary of 2000€: This translates to approximately 1600€ net on this example. Social security contributions ofFew readersIs Companio Work Expensive?
No, it's not. Companio Work offers a cost-effective solution for hiring international talent, which is particularly beneficial for small businesses. Instead of establishing a presence in each country where you want to hire employees, which involves social tax payments, accounting, and other complexities, Companio Work simplifies the process for you. Here's a real-life example to illustrate the affordability: Real-Life Example Let's consider a scenario in Spain where you have an emplFew readersHow Do I Register a New Employee With Companio Work?
Access the Companio's dashboard and navigate to the "Employees" section. Click on "Add Employee" to proceed. Provide the employee's personal information. Next, input details about their job, including salary, starting date, and other relevant data. Finally, enter the employee's bank information. After you submit the employee details, we will receive a request for a quote. Our team will calculate the quote based on the employee's gross salary and other relevant factors. ThiFew readers
Salaries
How Can I Pay Myself a Salary?
Paying yourself a salary without having a formal job or being a contractor (like a freelancer or independent worker) and trying to pay taxes in Estonia without being a tax resident there can be considered an irregular situation in your home country. This happens because your home country might consider you a tax resident and require you to pay taxes there instead of in Estonia. In short, you can't pay social security contributions (neither your Estonian company nor yourself) for the "saFew readersWhat Are the Consequences if I Fail to Pay an Employee’s Salary for One Month?
This can be a very problematic situation, with legal consequences. Initially, the deposit will cover a delayed payment, but this is not ideal. Hiring an employee entails significant responsibilities and legal obligations for the employer. This includes ensuring the ability to pay the salary, deducting taxes, complying with labor laws, providing benefits, maintaining accurate records, and respecting employee rights. It's also crucial to adhere to the employment contract and ensure financiaFew readersHow to Create an Invoice as a Contractor in Companio Work?
Here's how to create an invoice: Access the employee dashboard. You'll find a section with your name and contract details. Click on "View details." On the right side, where the invoice history is displayed, click on the "New invoice" button. Your invoice details will automatFew readersHow Do I Pay For My Employees' Salaries in Companio Work?
Every month, Companio Work follows a specific process to handle the payment of salaries for employees. Here are the steps involved: On the 1st of the month, we send a reminder to you, the customer, informing you that you have until the 4th to specify any bonuses you would like to include in the payroll for that month. Additionally, we advise you that the invoice for the salaries of your global employFew readersHow Are Salaries Determined and Bonuses Handled at Companio Work?
Salaries at Companio Work are determined based on a monthly bonus system. Here's how it works: At the beginning of each month, on day 1, you are given the opportunity to add bonuses for your employees. You have until the 4th of the month to decide whether you want to include a bonus in the employees' section. Once the bonus decisions are finalized, we take these bonuses into account and add them to the invoices. This means that the bonuses are reflected in the total amount billed tFew readers
Migration
How to Migrate My Employees & Contractors to Companio Work?
Upon accessing the Companio dashboard, you'll find a message prompting you to review some information before proceeding, as shown below. Click the "Let's Get Started!" button. Next, you'll find an explanation of what Companio Work is and how it functions. Please read it carefully and click continue. You'll seeFew readersWhat Do I Need to Do as an Employee or Contractor of My Company for the Migration to Companio Work?
There are 3 possible scenarios: Scenario 1: Digital Nomad (Non-Tax Resident) If you identify as a digital nomad without tax residency anywhere, you should select the contractor option when going through the migration process. Being employed as staff is not feasible in this case. It’s crucial to seek advice from a local tax advisor to verify your tax status. Scenario 2: Resident of a Non-Estonian Country For individuals residing in a country other than Estonia, you have the choiceFew readersDo We Need to Use Companio Work if Our Employees Are Registered with Local Companies in Their Countries of Residence?
No, you do not need to use Companio Work if you already have another company or business registered in the local country of your employees, which handles their social security, taxes, and compliance. In this scenario, payments for those employees must be processed by the local entity in their respective countries, and your Estonian company should not pay salaries to them. However, if you wish to simplify your administrative processes and reduce associated costs, we recommend considering clFew readersCan I Keep My Board Member Salary Without Using Companio Work?
With the introduction of Companio Work, some individuals may consider switching providers to maintain their employment status as board members without incurring additional costs. However, it's essential to understand that the salary paid from Estonia for such a role can be irregular and may lead to complications with both local and Estonian tax authorities. Paying social taxes in a country where you are not a tax resident can be considered irregular by local tax authorities and may also raiFew readersIs It Mandatory to Use Companio Work?
No, it's not mandatory, but we strongly recommend it. If you choose to assign yourself a salary, you can enjoy these benefits: ✅ You'll comply with local laws. ✅ You'll contribute to social security, which comes with all the associated benefits such as access to retirement, unemployment coverage, healthcare, and more. ✅ It allows you to hire employees in other countries without the hassles of international hiring. In other words, you won't have to worry about registering them in their rFew readersI’m a Tax Resident in a Country Outside of Estonia, and I Want to Assign Myself a Salary as an Employee. What Are the Benefits?
On the one hand, you'll contribute to your country's social security system, granting you entitlement to healthcare, unemployment coverage, and retirement benefits. On the other hand, having a solid payroll makes it easier for you to secure credits and loans, as lenders typically view employees with a regular salary as more reliable borrowers. Plus, you'll enjoy all the advantages of Companio Work. It means you won't have to worry about tedious administrative tasks such as paFew readersWhy Do I Have to Pay an Additional Fee With Companio Work if I Already Use Companio for Payroll Management?
Our goal with the launch of Companio Work is to enhance our service and ensure that customers like you comply with local laws in the countries where you are residents. It is crucial because if you are a tax resident in a country and assign yourself a salary without contributing to social security, you could be in an irregular situation. However, it's important to note that joining Companio Work is optional. It's a tool we provide to help you comply with local legislation and enable you toFew readersWhat Are the Alternatives if I Don’t Want to Use Companio Work?
You can continue to be self-employed or work as a freelancer and invoice your company as a contractor. We will include these invoices in the monthly accounting for your company in Estonia. If you are not a tax resident anywhere (for example, a digital nomad or location-independent), you can continue to invoice your company for your services as you did before. In any case, it's your responsibilityFew readersIs There an Additional Charge for Freelancers or Contractors Management?
No, if you decide to be a contractor or freelancer or hire contractors or freelancers, you won't have to pay any additional fees since you won't use Companio Work's services. You only need to upload a monthly invoice for your services and ensure your company makes the payment. Please remember that instead of using terms like "employee salary," you should now specify the invoice name so your payments will look more like "invoice payment XXX-12345678.Few readersIf I Already Have Employees in Estonia, What Are My Options?
If you already have employees in Estonia, they will initially be considered employees. However, you have two options: If you want them to continue as employees in Estonia, we offer you all the advantages and support you need with Companio Work. You also have the option to convert them into contractors or freelancers in Estonia. To do this, they must open a company in Estonia and invoice your company. We will include these invoices in yFew readers