🇪🇪 Estonia
Net salary in Estonia: flat rate and basic exemption
Estonia: a flat 22% income tax in 2026, charged after a basic exemption of 8,400 EUR a year that became uniform on 1 January 2026, and after the two deductible employee withholdings, unemployment insurance at 1.6% and the funded pension at 2%. The EXPATRIATION.IO calculator turns gross salary into net using the Estonian Income Tax Act and the rates published by the Maksu- ja Tolliamet.
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Tax breakdown by bracket
| Bracket | Rate | Amount | Tax |
|---|---|---|---|
| €0 – ∞ | 22.0% | €11,555 | €2,542 |
| Income tax | €2,542 | ||
Social contributions breakdown
Employer contributions
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🇪🇪 Estonia
Estonia charges employment income at a single rate of 22%, set by § 4(1) of the Income Tax Act and unchanged since 1 January 2025. The 2026 change is the basic exemption: since 1 January 2026 it is a flat 8,400 EUR a year, 700 a month, whatever the income. The income-dependent version that shrank as pay rose, the tax hump, was repealed on the same date. The 8,400 EUR exemption itself no longer applies at all from the tax period in which the taxpayer reaches pensionable age, a separate exemption of 9,312 EUR taking its place, and the employer applies one twelfth of it each month on the employee’s written application. The base is gross pay less the employee contributions, which are deductible: unemployment insurance at 1.6% and, for a member of the second pillar, the funded pension at 2%, the default rate a member may raise to 4% or 6%. Social tax of 33% is charged to the employer alone, together with 0.8% of unemployment insurance, and neither is withheld from pay. The rate had been legislated to rise to 24% from 2026, but the amendment was struck out in December 2025 before it ever applied.
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What the calculation reproduces, what it does not model
This calculation reproduces the base an Estonian payslip produces, gross less the employee social contributions the law makes deductible, unemployment insurance at 1.6% and the second-pillar funded pension at 2%; the basic exemption of 8,400 EUR a year, uniform since 1 January 2026; and the single rate of 22% on what remains. On the employer side it prices the 33% social tax and the 0.8% unemployment premium, neither of which is withheld from pay. The model is a full tax year for a resident employee who is a member of the second pillar at the default rate and who has asked the employer to apply the basic exemption, and each of those three assumptions can be false. The funded pension rate is 2% unless the member has applied to the registrar for 4% or 6%, a choice that § 9(2) of the Funded Pensions Act binds for at least a calendar year. What can change three times a year, on 1 January, 1 May and 1 September, is something else: whether the contribution is owed at all, under § 27-1(2), whatever the reason. Membership itself is not universal: § 66(1) of the Funded Pensions Act exempts anyone born before 1 January 1983 who never opted in, and § 27(1) lets a member stop paying on application, in which case the 2% line disappears and the taxable base rises by the same amount. The basic exemption is applied monthly only where the employee has signed the application, which § 42(2) reserves to one withholding agent of the taxpayer’s choosing outside the two cases of its subsections 2-3 and 2-4; taken annually instead, the yearly outcome is the same but the monthly net is not. From the tax period in which the taxpayer reaches pensionable age the 8,400 EUR exemption no longer applies and a separate one of 9,312 EUR takes its place, and the obligation to withhold the employee’s unemployment premium ends on the last day of the month in which that age is reached, or an early or flexible old-age pension is granted. Not modelled: the deduction of § 28 for supplementary funded-pension and PEPP contributions, which § 28(2) caps at 15% of the taxpayer’s Estonian taxable income and at 6,000 EUR, and which an employer may apply at the withholding stage; the deductions for training expenses and gifts, which § 28-2(1) caps together at 1,200 EUR and at 50% of income; and the employer’s minimum social tax obligation, computed on a monthly rate of 886 EUR in 2026, which bites only below that pay and never changes the employee’s net. Outside the calculation: income other than salary, non-resident status, and payroll rounding, the figures here being exact to the cent where payroll rounds each month.
Tax system in Estonia
Estonia charges employment income at a single rate of 22% in 2026, set by § 4(1) of the Income Tax Act and unchanged since 1 January 2025. What changed on 1 January 2026 is the basic exemption: it is now 8,400 EUR a year, 700 a month, whatever the income, the subsections that made it shrink as pay rose, the tax hump, having been repealed on that date. The employer applies one twelfth of it each month where the employee has asked in writing. The base is gross pay less the two employee social contributions, both deductible: unemployment insurance at 1.6% and, for a member of the second pillar, the funded pension at 2%, the default rate a member may raise to 4% or 6%. The 33% social tax that funds pensions and health care is charged to the employer alone, together with 0.8% of unemployment insurance, and is never withheld from the employee's pay. On the annualised median, 20,700 EUR a year, which is 1,724 EUR a month in 2025, a single person keeps 1,451 EUR net a month.
Income tax scale 2026
| Taxable income | Rate |
|---|---|
| €0 and above | 22% |
Employee social contributions
| Contribution | Rate | Annual cap |
|---|---|---|
| Unemployment insurance (employee, 1.6%) | 1.6% | No cap |
| Funded pension, second pillar (2%) | 2% | No cap |
Gross to net for common salaries (2026)
Single filer without children, standard scale and employee contributions. Estimates for planning, identical to the calculator above.
| Gross per month (over 12) | Gross per year | Net per year | Net per month (over 12) | Employer cost per year | Total deductions |
|---|---|---|---|---|---|
| €946 | €11,352 | €10,384 | €865 | €15,189 | 8.5% |
| €1,250 | €15,000 | €13,127 | €1,094 | €20,070 | 12.5% |
| €1,725 | €20,700 | €17,413 | €1,451 | €27,697 | 15.9% |
| €2,092 | €25,104 | €20,724 | €1,727 | €33,589 | 17.4% |
| €2,500 | €30,000 | €24,406 | €2,034 | €40,140 | 18.6% |
| €3,500 | €42,000 | €33,429 | €2,786 | €56,196 | 20.4% |
| €5,000 | €60,000 | €46,963 | €3,914 | €80,280 | 21.7% |
| €7,000 | €84,000 | €65,009 | €5,417 | €112,392 | 22.6% |
Wage benchmarks in Estonia
The monthly minimum wage applies to full-time work; the hourly rate is the one the same regulation sets alongside it. The median and the mean are gross monthly wages across all economic activities, from the annual wage statistics of Statistics Estonia. Neither figure is a net amount: the calculator above converts them.
| Benchmark | Gross amount | Source |
|---|---|---|
| Statutory minimum wage (2026) | 946 EUR gross per month (full-time) | Vabariigi Valitsuse määrus nr 36 (RT I, 24.03.2026, 5) |
| Statutory minimum wage (2026) | 5.67 EUR gross per hour | Vabariigi Valitsuse määrus nr 36 (RT I, 24.03.2026, 5) |
| Median wage (2025) | 1,724 EUR gross per month (all activities) | Statistikaamet, PA101 |
| Average wage (2025) | 2,092 EUR gross per month (all activities) | Statistikaamet, PA101 |
The rise to 24% was voted, then struck out before it applied
A law of 18 June 2025 touched three instruments at once: it repealed the security tax, raised the simplified business-account rate from 20% to 22%, and by its § 3 replaced "22" with "24" in § 4(1) of the Income Tax Act and "0.78" with "0.76" in § 4(1-1), with effect from 1 January 2026. Reading that law alone, the 2026 rate is 24%. It is not. A law of 3 December 2025, published on 18 December, provides in one sentence that "§§ 1 and 3 and § 4(1)" of the June law "are struck out", and its own § 3 defers to 1 January 2026 only its second section, leaving the striking-out to the general commencement rule. The repeal of the security tax survives; the rate increase never entered into force.
The consolidated text is what settles it, and it says so twice. § 4(1) still reads 22%, annotated with the 2023 amendment that brought it there on 1 January 2025, and the table of amending acts carries the June 2025 law with the words "01.01.2026 - välja jäetud", struck out, followed by the reference of the December law. Both of the redactions Riigi Teataja had published for the future on 13 September 2026, the one taking effect on 30 September and the last one on 31 December, keep 22% and keep the 8,400 EUR exemption: no increase is voted for 2027 either.
Sources: Tulumaksuseadus, § 4 ja § 23 (Riigi Teataja) · RT I, 08.07.2025, 1 · RT I, 18.12.2025, 3
The basic exemption stopped shrinking with income
Until 2025 the Estonian exemption fell as pay rose, which produced a band of income taxed at an effective rate well above the headline one, the maksuküür or tax hump. Subsections 2 to 5 of § 23 carried that mechanism and are all marked repealed as of 1 January 2026. What is left is subsection 1 alone: 8,400 EUR deducted from the resident’s income, 700 a month, whatever the income. The change had been voted on 20 June 2023 for 1 January 2025 and was postponed by a year in December 2024.
Two conditions still attach to it in payroll. The employer applies one twelfth a month only where the employee has asked in writing, and § 42(2) lets that application go to one withholding agent of the taxpayer’s choosing, except in the two cases of § 42(2-3) and (2-4); so someone who has not signed sees the full 22% withheld and recovers the difference at the annual reconciliation. And from the tax period in which the taxpayer reaches pensionable age the 8,400 EUR no longer applies at all: § 23-5 puts a separate exemption of 9,312 EUR in its place. The Social Insurance Board applies one twelfth of it to the pension each month without any application, but only to the pension: where the pension is smaller than that twelfth, § 42(1-3) sends the balance first to the mandatory funded-pension payments, and an employer applies what is left to salary only on the taxpayer’s written application. The working pensioner therefore still has a form to sign.
Sources: Tulumaksuseadus, § 23, § 23-5 ja § 42 (Riigi Teataja) · Maksumäärad (Maksu- ja Tolliamet)
The 2% funded pension is a default, and not everyone owes it
The second-pillar contribution is 2% of pay, and § 9 of the Funded Pensions Act writes it as what applies unless the member has applied to the registrar for 4% or 6%. A chosen rate binds for at least a calendar year under § 9(2). The three dates Estonian payroll works to, 1 January, 1 May and 1 September, are not the rate’s: they are the dates on which the OBLIGATION to withhold can change, under § 27-1(2), which is why the tax authority tells accountants to check the register each December, April and August, and why it adds that this holds whatever the reason, whether the person leaves the second pillar, suspends payment, retires from it or joins it.
Whether it is owed at all turns on a date of birth and on a form. § 66(1) states that anyone born before 1 January 1983 does not have to pay it; those cohorts could join only by filing a choice application at deadlines that ran from 2002 to 2010. And § 27-1 lets a member stop paying by filing an exemption application, effective on one of those same three dates. Someone who has instead filed a PAYMENT application to resume is in the other case: § 27-1(4) then makes them wait ten years from the last time the obligation arose before they can stop again. Someone outside the second pillar keeps 2% more of their gross and is taxed on a base that is larger by the same amount.
Sources: Kogumispensionide seadus, § 9, § 27-1 ja § 66 (Riigi Teataja) · Maksumäärad (Maksu- ja Tolliamet)
The 33% social tax is never withheld from pay
Estonia funds pensions and health care through a social tax of 33%, and it falls on the employer, not on the employee. The ground is not the list of payers in § 4 of the Social Tax Act, which names the resident legal person, the natural person, the non-resident with a permanent establishment in Estonia or making the payments the Act lists, a state or local authority, and the state, rural municipality or city in the cases of § 6: an employee is a natural person, so that list does not exclude them. The ground is the charging rule. § 2(1)(1) charges the tax ON the wages and other payments made TO the employee, and § 5 makes the person who receives them the insured party, not the payer. A gross salary in Estonia therefore carries only two employee CONTRIBUTIONS, 1.6% of unemployment insurance and 2% of funded pension, and the employer adds 33% plus 0.8% on top of the gross. Income tax is withheld from the same payment, so three lines leave the payslip, not two.
One consequence is worth knowing before comparing an Estonian offer with a French or Belgian one. Employer cost is high, about 34% above gross, while the employee’s own CONTRIBUTIONS come to 3.6%, income tax apart: the same gross does not mean the same thing on either side of the payslip. The employer also owes a minimum, the social tax computed on a monthly rate of 886 EUR in 2026, 292.38 EUR a month, which bites on very small part-time pay and never changes what the employee receives.
Sources: Sotsiaalmaksuseadus, § 4 ja § 7 (Riigi Teataja) · Vabariigi Valitsuse määrus nr 78, 25.09.2025 (RT I, 30.09.2025, 3)
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Source: emta.ee (Maksu- ja Tolliamet) · Tax year 2026 · Last updated September 2026