Employment Cost Calculator for Estonia
Calculate your complete hiring costs for Estonia employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Calculate Employment Costs
Estonia
Employment Cost Breakdown
Select a country and enter a salary to see the employment cost breakdown
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| Social Tax | 33% | Gross salary (employer's expense) |
| Unemployment Insurance Premium (Employer) | 0.8% | Gross earnings |
| Income Tax (Withheld) | 22% | Gross salary (employee's tax) |
| Mandatory Funded Pension (Withheld) | 2% (employee) | Gross salary (employee's contribution) |
Filing & Compliance
- Submit Declaration of Income and Social Tax, Unemployment Insurance Premiums, and Contributions to Mandatory Funded Pension (TSD form) by the 10th day of the month following the payment.
- Remit all withheld amounts and employer contributions to the Estonian Tax and Customs Board by the 10th day of the month following the payment.
- Register new employees with the Estonian Employment Register before they start working.
In 2026, Estonia implemented several changes to its tax system affecting both individuals and businesses.
Income Tax
- Personal Income Tax: The personal income tax rate remains at 22%. The basic exemption has increased to €700 per month (€8,400 annually) for all individuals, regardless of income level. For pensioners, the exemption remains at €776 monthly (€9,312 annually).
- Corporate Income Tax: The corporate income tax rate remains at 22%. The preferential 14% rate for distributed profits has been abolished.
- Withholding Tax on Dividends: The 7% withholding tax applies only to dividends distributed from profits taxed at the previous 14% rate.
- Tax on Advance Payments by Credit Institutions: Increased to 18%.
Tax-Exempt Allowances and Deductions
- Daily Allowance for Business Travel: Increased to €75 for the first 15 days of travel within a month and €40 for subsequent days.
- Compensation for Use of Personal Vehicle: Increased to €0.50 per km, up to a maximum of €550 per month.
- Health and Sports Costs: Employers can deduct up to €400 per employee annually. Massage and other specific healthcare services are now included.
- Gifts to Employees: Tax-free up to €100 per occasion. An additional €100 tax-free for work anniversaries if the employee has worked for at least five years. Gifts to employees' children remain tax-free up to €100.
Other Tax Changes
- The previously planned temporary defense tax of 2% on personal income and companies' annual profits, scheduled to be applied from January 1, 2026, until December 31, 2028, has been abolished.
- A new Motor Vehicle Tax was implemented in 2025.
- Excise duties have increased.
It is important to remember that these figures are based on information available as of February 17, 2026, and may be subject to change. Consulting official Estonian tax resources or a qualified tax advisor is recommended for the latest updates and specific situations.
