--- title: Management board member agency agreement or employment contract? date: 2013-01-07T09:48:44Z modified: 2013-01-07T09:48:44Z permalink: "https://grow.ee/juhatuse-liikme-voi-tooleping/" type: post status: publish excerpt: "" wpid: 1786 timestamp: 2013-01-07T09:48:44Z tags: - Accounting --- A management board member agreement is essentially an agency agreement, which differs from an [employment contract](https://grow.ee/wp-content/uploads/2012/10/Tooleping.doc) legally, but also, for example, in terms of taxation. It is worth noting that a management board member has health insurance. In terms of taxation, an important difference between the two agreements is the unemployment insurance contribution of 3% of the gross salary. In some cases, unemployment insurance coverage is considered an advantage of an employment contract, which guarantees compensation under certain conditions in the event of termination of the contract. However, the Unemployment Insurance Act excludes insurance for a board member. As an exception, concluding an employment contract with a board member is correct if the tasks performed under this contract do not fall within the duties of a board member, taking into account the competence provided for by law. In the described exceptional case, a board member has two contracts: a board member contract and an employment contract, as a result of which he or she performs two different roles. Since, unlike an employment contract, a board member contract allows for the performance of tasks without receiving remuneration for it, a completely correct situation may also arise in which the entire remuneration received on the board member's account is remuneration paid under the employment contract. The emergence of health insurance for board members deserves significant attention. Namely, there is a common misconception that a board member will have health insurance if a minimum social tax liability is declared for him or her each month. Namely, the law does not provide for the payment of social tax for a board member's remuneration no less than the monthly social tax rate, as is the case with an employment contract. Today, health insurance for several board members who do not receive remuneration has been in effect in this way due to the inaccuracy of the health insurance fund. As a solution, in order for a board member to receive health insurance, a real payment of the board member's remuneration is required, on which the social tax calculated would meet at least the minimum requirement. From the beginning of 2013, the monthly board member's remuneration should therefore be at least 290 euros gross. In summary, the taxation and declaration of the remuneration paid for the performance of the duties arising from the law of a board member should be based on the rules applicable to the board member's remuneration, not to the salary. In many cases, concluding a board member's contract as a separate document is not necessary at all, because a decision of a competent body is sufficient to determine the remuneration, which may also determine other benefits. In order for health insurance to be valid consistently, a board member must be paid a monthly remuneration that ensures that social tax is calculated that meets at least the minimum requirement. The above is a summary of an article published in [MaksuMaksja](http://www.maksumaksjad.ee/modules/smartsection/category.php?categoryid=123) by Lasse Lehis and Gaily Kuusik in December of last year, which discusses the topic of the board member contract in more detail.