---
title: "Personal car compensation in Estonia 2026 — a guide for employers and accountants"
description: "For employers and accountants: the 0.50 €/km rate and 550 € monthly cap, the written order, the mileage log, form INF 14 by 1 February and tax above the cap."
url: https://odoma.ee/en/help/isikliku-soiduauto-huvitis
language: en
published: 2026-09-09
updated: 2026-09-09
publisher: Odoma Digipädevuse Selts (Estonian non-profit, registry code 80659718)
---
# Personal car compensation in Estonia 2026 — a guide for employers and accountants

*For employers, HR managers and accountants: how to pay compensation for an employee's personal car tax-free, what has to be on file, and what to declare. Current as of 2026.*

When an employee or a board member drives their own car on work business, the employer may reimburse them tax-free. The exemption is not automatic: it rests on a written order, a mileage log (sõidupäevik) kept by the employee, and correct reporting. This page covers **the employer's side**; the driver's side — what goes into the log and how to keep it — is in the [sõidupäevik guide](https://odoma.ee/en/help/soidupaevik/ee).

## Rate and cap in 2026

| Parameter | Value |
|---|---|
| Tax-free rate | up to **€0.50 per kilometre** |
| Monthly cap per employer | **€550 per calendar month** |
| Mileage that corresponds to | 1,100 business km per month |
| In force until 31.12.2024 | €0.30/km and €335 per month |

Three things that trip employers up in practice:

- **€0.50 is a ceiling, not a mandatory tariff.** You may set a lower rate in the order — €0.30/km, say — and the payment stays tax-free. The €550 cap does not move with the rate.
- **The cap applies per employer.** Someone working for two employers may receive up to €550 a month from each; what another employer pays is not yours to track.
- **The cap is monthly.** Kilometres above 1,100 in one month do not roll over into the next.

The rate covers all ordinary running costs of the car — fuel, insurance, servicing, depreciation — so none of them can be claimed on top. The one exception is **parking while performing work duties**: that may be reimbursed against receipts and **outside the €550 cap**.

## What the employer must have on file

### 1. A written decision or order (käskkiri)

The basis for a tax-free payment is the employer's **written decision** (käskkiri, korraldus) stating:

- **the recipient** — first name and surname;
- **the amount** — the rate per kilometre or the sum;
- **the date or period** whose trips are being compensated.

It may cover a period longer than one calendar month — a whole year, for instance — so it need not be re-issued monthly. A new order is needed when the rate, the vehicle or the recipient changes.

### 2. The employee's mileage log

Without a record of the trips, no payment can be tax-free. The log must contain:

1. the **first name and surname** of the person using the car;
2. the **make and registration plate** of the vehicle;
3. the **date, destination and purpose** of every business trip;
4. the **odometer reading** at the start and at the end of every business trip.

No form is prescribed: paper, an Excel sheet and a PDF from an app are equally valid as long as those items are there. A free starting point for the employee: [mileage log template 2026 (Excel)](https://odoma.ee/downloads/soidupaevik-template-2026-en.xlsx).

### 3. Proof of the right to use the car

A **copy of the document proving the right to use the car** is attached to the decision: the registration certificate if the employee owns the car, or the certificate plus a power of attorney from the owner if it belongs to someone else (a spouse, a relative, a leasing company). A car the employee does not own can still be compensated — what matters is that it **does not belong to the employer and is not in the employer's possession**. Otherwise it is a company car (tööandja sõiduauto), under an entirely different set of rules.

## Paying: monthly or as a lump sum

You do not have to pay every month. One payment may cover several months **as long as each month counted separately stays within €550**.

Example. An employee drives 600 business km in January, 800 in February and 700 in March. Month by month that is €300 + €400 + €350 = **€1,050**, and the employer may pay it all in April — no breach, because no month counted exceeded €550. A breach arises only when the calculated amount for an individual month goes above the cap.

Parking during work trips is reimbursed separately, against receipts.

## Above the cap, or without a log

Two situations make the payment taxable, and both are expensive.

**The part above the cap is a fringe benefit (erisoodustus).** The employer pays the tax: income tax on the price of the benefit at the 22/78 coefficient, and social tax at 33 % on the benefit plus that income tax, declared on annex 4 of form TSD by the 10th day of the following month.

Example. An employee drives 1,400 business km in a month and the employer pays €0.50/km, i.e. €700. €550 stays tax-free; the remaining €150 is a fringe benefit:

| Calculation | Amount |
|---|---|
| Price of the fringe benefit | €150.00 |
| Income tax 150 × 22/78 | €42.31 |
| Social tax (150 + 42.31) × 33 % | €63.46 |
| **Total tax** | **€105.77** |

The €700 payment therefore costs the employer €805.77. The 300 "surplus" kilometres cannot be carried into the next month, because the calculation is tied to the calendar month.

**Compensation paid without a log is salary.** With no mileage log behind it, the payment is remuneration rather than tax-free compensation: it is declared per person on annex 1 of form TSD (annex 2 for a non-resident) and taxed in full — income tax, social tax, unemployment insurance and mandatory funded pension. A missing log does not make the payment merely riskier; it turns the whole amount into an expensive payroll line.

## Reporting: form INF 14

Compensation for the use of personal cars paid during a calendar year is declared by the employer **on form INF 14**, filed with the Estonian Tax and Customs Board (EMTA) **once a year, by 1 February** for the previous calendar year.

- **Part I** is the personal-car compensation itself: the recipient's name and personal identification code, the car's registration plate and the amount paid. Parts II and III cover training costs and health-promotion costs — the same form, the same deadline.
- Part I is filed by resident legal persons, state and local-government institutions, employers who are natural persons, and non-residents with a permanent establishment in Estonia.
- **The fringe benefit is declared separately** — on annex 4 of form TSD, monthly. INF 14 does not replace it.

That leaves EMTA with three sets of data that have to agree: the INF 14 rows, the payroll and the mileage log. An audit looks precisely at that — whether the amount paid matches the kilometres in the log, and whether the log is continuous rather than patchy.

## Board members

For the purposes of this rule a board member (juhatuse liige) is treated as an employee: the same written order, mileage log, €0.50/km rate and €550 monthly cap apply, even where there is no employment contract. Payments to a board member also go into Part I of form INF 14.

## How Odoma Tracker helps the employer

Odoma Tracker is an app on the employee's phone; the employer installs nothing and buys no in-car device. What changes on the accountant's desk:

- **Trips record themselves.** The app detects a trip automatically — no "start recording" button to remember.
- **Business and personal are separated.** Trips are classified against a working schedule, and any single trip can be re-tagged.
- **The month's figure is available as you go:** business kilometres, the compensation in euros, and how much is left before the €550 cap — so an overrun does not surface for the first time in payroll.
- **A PDF mileage log with every mandatory field**, e-mailed to the accountant straight from the app.
- **Several employees? The Odoma dashboard.** Every driver's log arrives automatically, you approve the trips, the compensation per employee is calculated under the rate and the cap, and the accountant gets the export — see [Odoma for business](https://odoma.ee/en/business).

That leaves two things on the employer's side that no app will do for you: the order and INF 14.

> **Several employees on the road?** In the Odoma dashboard the logs of all your drivers arrive automatically, you approve the trips, and the compensation is calculated for payroll. 14-day free trial, by invoice, no card. → https://odoma.ee/en/business

## FAQ

**Is a mileage log enough on its own to pay the compensation?**
No. The log evidences the kilometres, but the basis for the exemption is the employer's written decision (käskkiri or korraldus) naming the recipient, the amount and the date or period, with a copy of the document proving the right to use the car attached. Without the order you have only kilometres; without the log, only paper — a tax-free payment needs both.

**Can an employer pay less than €0.50 per kilometre?**
Yes. €0.50/km is the tax-free ceiling, not a compulsory tariff, and the employer may fix a lower rate in the order. The €550 monthly cap applies whichever rate you choose.

**An employee drove 1,400 km in a month. What happens to the kilometres above the cap?**
The tax-free maximum for a calendar month is €550, which at €0.50/km corresponds to 1,100 kilometres. The rest may still be paid, but it is a fringe benefit: on €150 that means €42.31 of income tax and €63.46 of social tax. The kilometres cannot be moved into another month, because the calculation is monthly.

**When is form INF 14 due?**
Once a year, by 1 February, for the previous calendar year. The fringe benefit is reported independently of it — on annex 4 of form TSD, by the 10th day of the month following the payment.

**Can compensation be paid to a board member, or for a car the employee does not own?**
Yes to both. A board member is treated as an employee here: a written order, a mileage log, up to €0.50/km and no more than €550 per calendar month, with no employment contract required. A car belonging to someone else works too, provided the right to use it is documented — the registration certificate or a power of attorney from the owner — and the car does not belong to the employer.

## Sources

- [EMTA — Compensation for the use of personal cars](https://www.emta.ee/en/admin/content/handbook_article/343)
- [EMTA — Erisoodustused (fringe benefits)](https://www.emta.ee/en/business-client/taxes-and-payment/income-and-social-taxes/fringe-benefits)
- [EMTA — Vormi INF 14 täitmise juhend (filing instructions, PDF)](https://www.emta.ee/media/1003/download)
- [Riigi Teataja — Government regulation on record-keeping and compensation for the use of a personal car](https://www.riigiteataja.ee/akt/109102012008)
- [Riigi Teataja — Tulumaksuseadus (Income Tax Act)](https://www.riigiteataja.ee/akt/765523)
- [Riigi Teataja — form INF 14 (annex to the Minister of Finance's regulation)](https://www.riigiteataja.ee/aktilisa/1031/2201/0013/RHM60_lisa22.pdf)
- [Riigi Teataja — Maksukorralduse seadus § 58 (retention period)](https://www.riigiteataja.ee/akt/192294)

## Legal disclaimer

This document is prepared by Odoma Digipädevuse Selts (registry code 80659718) for general user information. It is **not legal, accounting, or tax advice**. Estonian tax regulation can change; for disputes or material questions, contact:

- **Maksu- ja Tolliamet (EMTA)** — the official regulator. Site: [emta.ee](https://www.emta.ee/), business-client helpline.
- **A licensed accountant** — for individual recommendations on your situation (wording of the order, contested payments, cross-border cases).

Odoma Digipädevuse Selts assumes no responsibility for decisions made on the basis of this text.

---

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