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How are the taxes for Estonian tax residents calculated?

Last updated: August 31, 2023

Here's an example: you are an Estonian tax resident and you have received a 1000 EUR net payment from your customer. First, the Xolo fee of 5,9% applies to the payment, meaning that the taxes are calculated based on 941 EUR. Assuming that you want to take into account the tax-free minimum and you have joined Estonian funded pension system, then the taxes are calculated as follows:

  • Total cost: 941 EUR
  • Social tax: 232.09 EUR
  • Unemployment insurance contribution (employer): 5.63 EUR
  • Funded pension: 14.07 EUR
  • Unemployment insurance contribution (employee): 11.25 EUR
  • Income tax: 4.79 EUR
  • Net withdrawal: 673.18 EUR

Therefore, based on the example you would receive 673.18 EUR to your personal bank account, and related taxes in the amount of 267.82 EUR would be paid to the tax authorities. You can use a standard calculator to calculate the taxes and net withdrawal amount (please tick the Salary/Wage Fund).

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