Tax rates
- The rate of withheld income tax is 22%.
- The basic exemption is 700 euros per month, i.e. 8,400 euros per year, or 776 euros per month, i.e. 9,312 euros per year at pensionable age.
NB! Basic exemption no longer depends on a person's income and does not decrease as income increases.
Employers calculate basic exemption on the basis of a written application of a person. The Social Insurance Board and/or Funded Pension Registry calculate the basic exemption automatically at pensionable age, i.e. you do not have to submit an application. - Expenses incurred to promote the health of employees in the amount of 400 euros per employee in a year are exempt from tax.
- Corporate income tax is 22/78.
From 1 January 2025, the tax calculation of regularly distributed dividends, i.e. the lower tax rate of 14/86, was abolished and only the standard rate of 22/78 applies. An Estonian company has the right to tax exemption when paying dividends received until December 31, 2024 and taxed at a lower rate (14/86) to a shareholder who is a legal person. The prerequisite for tax exemption is that the Estonian company receiving and thereafter paying the dividend had a holding of at least 10 per cent in the respective company at the time of receiving the dividend. If dividends taxed at a lower tax rate (14/86) are redistributed to a shareholder who is a natural person, income tax of 7% must be withheld (basis: subsection 68 of § 61 of the Income Tax Act). The rate of social tax is 33 per cent. The monthly rate of the minimum social tax obligation is 886 euros, i.e. the minimum obligation of social tax is 292.38 euros per month.
- The unemployment insurance premium rates are 1.6% for the employee and 0.8% for the employer (the same as in 2025).
The obligation to withhold employee’s unemployment insurance premium (1.6%) ends on the last day of the month in which the employee reaches pensionable age or is granted early retirement or flexible old-age pension. The employer shall continue to pay unemployment insurance premium on the wages paid to an employee at pensionable age or employee who has been granted an early retirement pension or flexible old-age pension at the rate established for the employer (0.8%). The funded pension contribution rate is 2%, 4% or 6%, depending on a person's application to the registrar. If a person has not made an application to use a higher rate, the default contribution rate is 2%.
The obligation to withhold the contribution to funded pension may change 3 times a year: 1 January, 1 May and 1 September. This is regardless of whether a person leaves the second pillar, suspends contributions to the second pillar, retires from the second pillar or joins the second pillar. Information about the obligation to withhold funded pension contributions can be obtained through the Funded Pension Registry’s subscription query by means of a simple or mass query using personal identification codes.We recommend that accountants check the obligation to withhold contributions to employees’ funded pension in December, April and August.
- Upon making payments for December 2025, it should be borne in mind that taxation is cash-based, i.e. if the December wages are paid out in January, the taxes and payments must be calculated in the 2026 rates and declared in the tax return (form TSD) submitted for January (the submission deadline is 10 February 2026). However, if the December wages are paid in December 2025, the 2025 rates will have to be applied for the calculation/withholding of taxes and payments, and the taxes and payments will have to be declared in the tax return (form TSD) submitted for December 2025 (the submission deadline is 10 January 2026).
- VAT rates are 24% (standard rate), 13%, 9%, and 0%.
More information: VAT rates and supply exempt from tax - Land tax rates and tax incentives are set by local governments.
More information: Land tax
- The rate of withheld income tax is 22%.
- The amount of basic exemption depends on a person’s income (up to 654 euros per month and up to 7,848 euros per year). In order for the basic exemption to be calculated, the person must submit a written application to the employer or the person making the payment.
More information on the calculation of basic exemption of a resident and non-resident. - Basic exemption at pensionable age does not depend on a person’s income (up to 776 euros per month and up to 9,312 euros per year). In order for the basic exemption to be calculated, the person at pensionable age does not need to submit an application to the Social Insurance Board or the Funded Pension Registry. The Social Insurance Board calculates the basic exemption automatically and transfers the unused balance of basic exemption to the Funded Pension Registry.
More information: Basic exemption at pensionable age - Expenses incurred to promote the health of employees in the amount of 400 euros per employee in a year are exempt from tax.
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The corporate income tax rate is 22/78.
As of 01.01.2025, the tax calculation of regularly distributed dividends, i.e. the lower tax rate of 14/86, will be eliminated and only the standard rate of 22/78 will apply. Estonian companies will still be entitled to tax exemption from 2025 when further distributing dividends received until 31 December 2024 and taxed at a lower tax rate (14/86) to shareholders who are legal persons. The prerequisite for the tax exemption is that the Estonian company that received and further distributed the dividend had at least a 10% holding in the respective company at the time of receiving the dividend. When further distributing dividends taxed at a lower tax rate (14/86) to a natural person shareholder, there is an obligation to withhold income tax at a rate of 7% (subsection 68 of § 61 of the Income Tax Act, effective from 01.01.2025). - The rate of social tax is 33 per cent. The monthly rate of the minimum social tax obligation is 820 euros (instead of 725 euros in force in 2024), i.e. the minimum obligation of social tax is 270.60 euros per month.
- The unemployment insurance premium rates are 1.6% for the employee and 0.8% for the employer (the same as in 2024).
The obligation to withhold employee’s unemployment insurance premium (1.6%) ends on the last day of the month in which the employee reaches pensionable age or is granted early retirement or flexible old-age pension. The employer shall continue to pay unemployment insurance premium on the wages paid to an employee at pensionable age or employee who has been granted an early retirement pension or flexible old-age pension at the rate established for the employer (0.8%). -
The funded pension contribution rate is 2%, 4% or 6%, depending on a person's application to the registrar. If a person has not made an application to use a higher rate, the default contribution rate is 2%.
The obligation to withhold the contribution to funded pension may change 3 times a year: 1 January, 1 May and 1 September. This is regardless of whether a person leaves the second pillar, suspends contributions to the second pillar, retires from the second pillar or joins the second pillar. Information about the obligation to withhold funded pension contributions can be obtained through the Funded Pension Registry’s subscription query by means of a simple or mass query using personal identification codes.We recommend that accountants check the obligation to withhold contributions to employees’ funded pension in December, April and August.
From January 2024, persons who have joined the second pillar will be able to increase their 2% funded pension contribution rate to 4% or 6% if they wish. The application can be submitted by 30 November each year at the latest and the rate can be changed once a year. The new contribution rate will apply from 1 January.
More information: Amendment to the funded pension contribution rate as of 1 January 2025 - Upon making payments for December 2024, it should be borne in mind that taxation is cash-based, i.e. if the December wages are paid out in January, the taxes and payments must be calculated in the 2025 rates and declared in the tax return (form TSD) submitted for January (the submission deadline is 10 February 2025). However, if the December wages are paid in December 2024, the 2024 rates will have to be applied for the calculation/withholding of taxes and payments, and the taxes and payments will have to be declared in the tax return (form TSD) submitted for December 2024 (the submission deadline is 10 January 2025).
- The rate of withheld income tax is 20%.
- The amount of basic exemption depends on a person’s income (up to 654 euros per month and up to 7,848 euros per year). In order for the basic exemption to be calculated, the person must submit a written application to the employer or the person making the payment.
More information on the calculation of basic exemption of a resident and non-resident. - Basic exemption at pensionable age does not depend on a person’s income (up to 776 euros per month and up to 9,312 euros per year). In order for the basic exemption to be calculated, the person at pensionable age does not need to submit an application to the Social Insurance Board or the Funded Pension Registry. The Social Insurance Board calculates the basic exemption automatically and transfers the unused balance of basic exemption to the Funded Pension Registry.
More information: Basic exemption at pensionable age - Expenses made for improving employees’ health to the extent of 100 euros per employee in a quarter are exempt from tax.
More information: Health and sport expenses - The rate of corporate income tax applicable to dividends is 20/80. The rate of corporate income tax on regularly payable dividends is 14/86 and the rate of income tax additionally withheld from dividends paid to natural persons is 7%.
- The rate of social tax is 33 per cent. The monthly rate of the minimum social tax obligation is 725 euros (instead of 654 euros in force in 2023), i.e. the minimum obligation of social tax is 239.25 euros per month.
- The unemployment insurance premium rates are 1.6% for the employee and 0.8% for the employer (the same as in 2023).
The obligation to withhold employee’s unemployment insurance premium (1.6%) ends on the last day of the month in which the employee reaches pensionable age or is granted early retirement or flexible old-age pension. The employer shall continue to pay unemployment insurance premium on the wages paid to an employee at pensionable age or employee who has been granted an early retirement pension or flexible old-age pension at the rate established for the employer (0.8%). -
The funded pension contribution rate is 2%.
The obligation to withhold the contribution to funded pension may change 3 times a year: 1 January, 1 May and 1 September. This is regardless of whether a person leaves the second pillar, suspends contributions to the second pillar, retires from the second pillar or joins the second pillar. Information about the obligation to withhold funded pension contributions can be obtained through the Funded Pension Registry’s subscription query by means of a simple or mass query using personal identification codes.We recommend that accountants check the obligation to withhold contributions to employees’ funded pension in December, April and August.
As of 1 January 2024, persons who have joined the II pillar will have the opportunity to increase their 2% funded pension contribution rate to 4% or 6% if they wish. For this purpose, a corresponding application must be submitted to the registrar of the pension register or account administrator (from 1 January 2024 to 30 November 2024) and the new payment rate will apply from 1 January 2025.
More information: Amendment to the funded pension contribution rate as of 1 January 2025 - Upon making payments for December 2023, it should be borne in mind that taxation is cash-based, i.e. if the December wages are paid out in January, the taxes and payments must be calculated in the 2024 rates and declared in the tax return (form TSD) submitted for January (the submission deadline is 10 February 2024). However, if the December wages are paid in December 2023, the 2023 rates will have to be applied for the calculation/withholding of taxes and payments, and the taxes and payments will have to be declared in the tax return (form TSD) submitted for December 2023 (the submission deadline is 10 January 2024).
National minimum wage rates
Since 1 April 2026 the minimum hourly wage rate is 5,67 euros per hour. The minimum monthly wage in the case of full-time working time is 946 euros.
| From | Minimum wage per hour | Minimum monthly wage in the case of full-time work | Basis |
|---|---|---|---|
| 01.04.2026 | 5,67 euros | 946 euros | Government of the Republic Regulation No 36 of 23.03.2026 |
| 01.01.2025 | 5,31 euros | 886 euros | Government of the Republic Regulation No 87 of 19.12.2024 |
| 01.01.2024 | 4,86 euros | 820 euros | Government of the Republic Regulation No 113 of 08.12.2023 |
| 01.01.2023 | 4,30 euros | 725 euros | Government of the Republic Regulation No 124 of 09.12.2022 |
| 01.01.2022 | 3,86 euros | 654 euros | Government of the Republic Regulation No 116 of 09.12.2021 |
| 01.01.2021 | 3,48 euros | 584 euros | Government of the Republic Regulation No 115 of 19.12.2019 |
| 01.01.2020 | 3,48 euros | 584 euros | Government of the Republic Regulation No 115 of 19.12.2019 |
| From | Minimum wage per hour | Minimum monthly wage in the case of full-time work | Basis |
|---|---|---|---|
| 01.01.2019 | 3,21 euros | 540 euros | Government of the Republic Regulation No 117 of 13.12.2018 |
| 01.01.2018 | 2,97 euros | 500 euros | Government of the Republic Regulation No 189 of 21.12.2017 |
| 01.01.2017 | 2,78 euros | 470 euros | Government of the Republic Regulation No 139 of 18.12.2015 |
| 01.01.2016 | 2,54 euros | 430 euros | Government of the Republic Regulation No 139 of 18.12.2015 |
| 01.01.2015 | 2,34 euros | 390 euros | Government of the Republic Regulation No 166 of 28.11.2013 |
| 01.01.2014 | 2,13 euros | 355 euros | Government of the Republic Regulation No 166 of 28.11.2013 |
| 01.01.2013 | 1,90 euros | 320 euros | Government of the Republic Regulation No 6 of 10.01.2013 |
| 01.01.2012 | 1,80 euros | 290 euros | Government of the Republic Regulation No 169 of 22.12.2011 |
| 01.01.2011 | 1,73 euros | 278,02 euros | Government of the Republic Regulation No 118 of 23.08.2010 § 81 |
| 01.01.2008 | 27 kroons | 4350 kroons | Government of the Republic Regulation No 90 of 11 June 2009 Government of the Republic Regulation No 254 of 20 December 2007 |
| 01.01.2007 | 21 kroons 50 cents | 3600 kroons | Government of the Republic Regulation No 273 of 21 December 2006 |
| 01.01.2006 | 17 kroons 80 cents | 3000 kroons | Government of the Republic Regulation No 328 of 22 December 2005 |
| 01.01.2005 | 15 kroons 90 cents | 2690 kroons | Government of the Republic Regulation No 374 of 23 December 2004 |
| 01.01.2004 | 14 kroons 60 cents | 2480 kroons | Government of the Republic Regulation No 323 of 18 December 2003 |
| 01.01.2003 | 12 kroons 90 cents | 2160 kroons | Government of the Republic Regulation No 366 of 3 December 2002 |
| 01.01.2002 | 10 kroons 95 cents | 1850 kroons | Government of the Republic Regulation No 396 of 18 December 2001 |
| 01.01.2001 | 9 kroons 40 cents | 1600 kroons | Government of the Republic Regulation No 428 of 19 December 2000 |
| 01.01.2000 | 8 kroons 25 cents | 1400 kroons | Government of the Republic Regulation No 360 of 23 November 1999 |
| 01.01.1999 | 7 kroons 35 cents | 1250 kroons | Government of the Republic Regulation No 270 of 8 December 1998 |
| 01.01.1998 | 6 kroons 50 cents | 1100 kroons | Government of the Republic Regulation No 245 of 18 December 1997 |
| 01.02.1997 | 5 kroons | 845 kroons | Government of the Republic Regulation No 52 of 6 March 1997 |
| 01.01.1996 | 4 kroons | 680 kroons | Government of the Republic Regulation No 14 of 16 January 1996 |
Last updated: 11.11.2025
