What are the taxes I need to pay in Estonia (operating in Estonia)?

If you own and run an Estonian company while operating and being a registered tax resident in Estonia, the following taxes apply.

Dividends

If you distribute dividends, corporate income tax must be paid:

• Rate: 22% (calculated as 22/78 of the net dividend amount)
1. Example: If you receive €800 net dividends, the corporate income tax payable is €225.64.

Estonia applies a deferred corporate income tax system. This means:

• No corporate income tax is due as long as profits remain in the company.
• Earnings can be kept in the company indefinitely without taxation.
• Taxes arise only when profits are distributed or paid out (e.g., employee salary, board member remuneration, dividends).

Board member remuneration

If you pay yourself board member remuneration, the following taxes apply:

• Personal income tax: 22%
• Social tax: 33%
• Funded pension (if applicable): 2%, 4%, or 6%

The total tax burden depends on the payout amount. You can estimate this using a standard salary calculator:

• Enter the payment amount in the ‘Net salary’ field. 
• 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. 

Employee salary

If you pay yourself a salary under an employment contract, the following taxes apply:

• Personal income tax: 22%
• Social tax: 33%
• Unemployment insurance:
• Employee: 1.6%
• Employer: 0.8%
• Funded pension (if applicable): 2%, 4%, or 6%

The tax burden depends on the gross salary agreed in your employment contract. You can estimate this using a standard salary calculator:

• Enter the gross salary amount 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. 

Employee salary, board member remuneration, and dividend taxes must be paid monthly by the 10th day of the month following the payouts. If the 10th falls on a weekend or public holiday, the deadline is the next working day.