This study examines how digital capability, represented by digital literacy and technology use, influences employee digital well-being through psychological burden in MSMEs. Using a quantitative cross-sectional design, data were collected from 506 MSME employees in South Sulawesi, Indonesia, and analyzed using Partial Least Squares Structural Equation Modeling. Digital literacy and technology use significantly improve employee digital well-being (DL → DWB: β = 0.312, p < 0.001; TU → DWB: β = 0.139, p = 0.002) and positively influence psychological burden. Psychological burden also significantly enhances digital well-being (PB → DWB: β = 0.238, p < 0.001) and mediates the relationships between digital capability and employee well-being (DL → PB → DWB: β = 0.067, p < 0.001; TU → PB → DWB: β = 0.065, p < 0.001). The study highlights psychological burden as an adaptive mechanism supporting employee resilience during digital transformation.
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