If you operate in Estonia on a permanent basis and are a tax resident there, and if you pay yourself a salary, the following taxes are declared and paid in Estonia, according to Estonian rules and regulations:
- Social tax 33% paid by the employer.
- Employer’s unemployment insurance contribution 0.8% paid by the employer.
- Personal income tax 22% is withheld from the employee’s gross salary. Upon the employee’s written application, a monthly tax-free allowance can be applied. In 2026, the tax-free allowance amounts to €700 per calendar month.
- Employee’s unemployment insurance contribution 1.6% is withheld from the employee’s gross salary.
- Mandatory funded pension contribution (2%, 4%, or 6%) if the employee participates in the second pillar pension system.
If no salary payment is made in a particular month, the employer is still required to declare the employee and pay the minimum monthly social tax obligation (€292.38 from 1 January 2026).
Employee salary payments must be declared in the monthly tax return (TSD). The TSD must be submitted by the 10th day of the month following the payment. If the 10th falls on a weekend or public holiday, the deadline is the next working day. All related taxes must also be paid by the same deadline.
The final tax burden depends on your gross salary amount. You can estimate this using a standard salary calculator.
When using the calculator:
- Enter the gross salary amount stated in your employment contract in the ‘Gross salary’ field.
- Tick boxes ‘Unemployment insurance (employer)’ and ‘Unemployment insurance (employee)’.
- Select ‘Take into account tax-free minimum’ and enter the amount indicated in your tax-free income application submitted to your employer.
- Select ‘Funded pension’ if you are participating in the second pillar pension system.