Estonian Tax Rates 2026
Every rate below applies in Estonia in 2026, with the source for each at the bottom of the page. We keep this page current rather than dated - it is the reference our own accountants work from, so if a rate changes here, it has changed in our clients’ payroll too.
Last checked: 29 July 2026.
Payroll taxes
| What | Paid by | Rate 2026 |
|---|---|---|
| Income tax | employee, from gross after deductions | 22% |
| Social tax | employer, on top of gross | 33% |
| Unemployment insurance | employee | 1.6% |
| Unemployment insurance | employer, on top of gross | 0.8% |
| Funded pension, II pillar | employee, if joined | 2%, 4% or 6% |
| General basic exemption | applied on the employee’s application | up to €700/month |
| Minimum wage, full time | statutory floor | €946/month, €5.67/hour |
| Minimum monthly social tax base | employer | €886 → €292.38 minimum liability |
Two things people miss. The basic exemption no longer tapers - from 2026 it is up to €700 a month for everyone, rather than shrinking as income rises, and the employer applies the figure stated in the employee’s application. And the minimum social tax base is not the minimum wage: it is set separately at €886 for 2026, so an employer owes at least €292.38 of social tax for an employee even in a month of very low pay.
Total employer cost is gross plus 33% plus 0.8% - roughly gross × 1.338. A full-time employee on the minimum wage therefore costs about €1,266 a month.
Want the arithmetic for a specific salary? Use the salary calculator.
Corporate income tax
Estonia does not tax profit while it stays in the company.
- 0% on retained and reinvested profit.
- 22/78 of the net amount on distributed profit - the standard rate since 2025.
This is the whole reason the Estonian OÜ is attractive to international founders: reinvested earnings are never taxed year to year, and the tax event is a decision you choose to make.
Value added tax
| Rate | Applies to |
|---|---|
| 24% | standard rate, in force since 1 July 2025 |
| 13% and 9% | reduced rates - accommodation, certain publications and medicines |
| 0% | intra-EU supplies and exports |
- Registration threshold: €40,000 of taxable turnover, counted from the start of the calendar year. Once you pass it you have three working days to apply.
- The Tax Board normally decides within five working days of a complete application.
- EU distance selling: €10,000 a year, EU-wide and cumulative. Above it, VAT is due at the customer’s local rate, declared through OSS.
Detail on registration, OSS/IOSS and the common mistakes is on our VAT and tax compliance page.
Filing deadlines
| What | When |
|---|---|
| Employment register entry for a new hire | before the first working day |
| TSD - income and social tax declaration | 10th of the following month |
| Payroll taxes paid | 10th of the following month |
| KMD - VAT return, and VD report | 20th of the following month |
| Annual income statement to employees | 15 February |
| Annual report to the Commercial Register | 6 months after financial year end - 30 June for a calendar year |
Accounting records must be retained for seven years.
What being late costs
- Unpaid tax accrues interest at 0.06% per day - 21.9% a year - from the day after the due date until the debt is settled.
- The annual report is the expensive one. There is no minimum threshold: a company with no sales, no staff and no bank movement still has to file a report showing zeros. Fines reach €3,200, they can be imposed on board members personally rather than on the company, and sustained failure can lead to deletion from the Commercial Register.
Sick leave
| Days | Paid by | Rate |
|---|---|---|
| Day 1 | nobody | unpaid |
| Days 2-5 | employer | 70% |
| From day 6 | Health Insurance Fund | 70% |
Where these numbers come from
Rates change, and in Estonia they change often - VAT moved mid-2025 and the minimum wage moved in April 2026. Always confirm against the primary source before a decision with money attached, or ask us.
Sources: Estonian Tax and Customs Board - tax rates, calculation of basic exemption, VAT rates, registration as a VAT payer and social tax; interest on arrears per Taxation Act § 115; minimum wage from 1 April 2026 per the agreement between the Estonian Employers’ Confederation and the Estonian Trade Union Confederation.
Checked by Maria, our chief accountant, 29 July 2026.
Need someone to apply these rather than look them up? See payroll, VAT and tax compliance, e-residency and international accounting or the price list.