Remote Teams Payroll for IT and SaaS Companies

Very risky. Working 40 hours per week exclusively for a single client is the defining indicator of employment in Polish labour law. The ZUS (social security authority) and the Polish Labour Inspectorate actively investigate relationships that match this profile. If reclassified as employment: you would owe all ZUS employer contributions from the start of the relationship (approximately 20% of gross remuneration) plus penalty interest, and the worker would be entitled to employment rights (notice periods, holiday pay, sick pay, etc.). The fact that there is a B2B contract and the person operates as a sole trader (działalność gospodarcza) provides limited protection if the substance of the relationship is employment. Regularise this immediately: either genuinely restructure the relationship so the person has multiple clients and commercial independence, or engage them via an EOR.

Setting up Estonian payroll requires four steps. First, register as an employer with EMTA through the e-Business Register — this is automatic once you hire your first employee. Second, register the employee in the Töötamise register (Employment Register) before their first working day — registration is done through EMTA’s e-Tax portal. Third, agree the gross salary and calculate the monthly take-home — your accountant or EMTA’s salary calculator can do this. Fourth, file the first TSD declaration by the 10th of the month following the first payroll period and pay the combined employer social tax + employer UI + withheld income tax + withheld employee UI in one transfer to EMTA. The net salary is paid to the employee’s bank account. Your accountant will typically handle all of this from your payroll data.

Once the employee establishes Spanish tax residence (typically after 183 days in Spain, though the exact rules depend on their circumstances), they become a Spanish tax resident and Spanish employment law applies. You have two options: engage them via an EOR in Spain (the employee becomes legally employed by the EOR in Spain, with Spanish social security and Spanish income tax — you stop running Estonian payroll for them), or register a Spanish branch or subsidiary and run Spanish payroll directly. The worst option — continuing to run Estonian payroll — does not satisfy Spanish obligations and exposes both the company and the employee to Spanish compliance risk. During the transition period before they establish Spanish residency, an A1 certificate can cover short-term periods. Plan for this transition at least 3 months before the anticipated residency change.

Deel invoices arrive monthly and show a total amount per employee covering: gross salary, employer social security contributions in their country, and the Deel service fee. For accounting, you should: (1) record each invoice as an expense with three line items (salary, employer SS, EOR fee) — you can find the breakdown in the Deel employer dashboard under ‘Cost Explorer’; (2) post to your P&L as personnel expense (salary + employer SS) and platform subscription expense (EOR fee) or combine all three into personnel costs — your choice of policy; (3) reconcile the Deel invoice to your headcount log and confirm the total employer cost per employee against your hiring budget. Deel invoices in EUR for EU-based employees and in USD for US employees — convert USD amounts at the transaction-date rate.

If you genuinely have no employees and all your team are truly independent contractors, the absence of TSD declarations is correct and needs no apology. The right response to the investor is: explain that your team structure consists of independent contractors operating through their own business entities, describe how these contractors meet the genuine independence criteria (multiple clients, own tools, etc.), and note that you have reviewed the relationships for misclassification risk. If you want to proactively strengthen this position, document the independence criteria for each contractor relationship — fee negotiation records, evidence of other clients, contractor’s own registered business. If the investor’s concern is specifically about PE or substance, address those separately. The investor may also be asking because they understand the tax efficiency story: a team of genuine contractors has no Estonian social tax cost (33%), which significantly reduces employer costs and the question may be about whether the team is properly structured to maintain that advantage.