Estonia Salary Calculator 2026
Calculate employee net salary and employer costs including social tax, unemployment insurance, and optional II pillar pension
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Enter your salary details to see the complete breakdown
Estonian payroll: simple on paper, with two big employer-side numbers
Estonian payroll is one of the simplest in the EU. There's a single 22% income tax (rising to 24% in 2026), a universal €700/month basic allowance, and three employee-side contributions: unemployment insurance, the optional II pillar pension, and (paid by the employer, not deducted from the employee) social tax at 33%.
The complication for employers is that social tax is paid on top of gross, and there is a monthly minimum sotsiaalmaks per employee regardless of how part-time they are. The calculator on this page splits employee deductions from total employer cost so you can see both sides clearly.
Payroll components for 2025
Employee-side deductions
- Income tax (Tulumaks) — 22% flat, withheld monthly
- Basic allowance — €700/month exempt for working-age employees (€776 for pensioners)
- Unemployment insurance (employee) — 1.6% of gross
- II pillar pension — 2% of gross (default; can be 0%, 4% or 6% at employee's choice)
Employer-side contributions (on top of gross)
- Social tax (Sotsiaalmaks) — 33% of gross, with a monthly minimum based on the “monthly minimum” (€820/month → €270.60 minimum sotsiaalmaks in 2025)
- Unemployment insurance (employer) — 0.8% of gross
So a €1,000 gross employee costs the employer €1,338 (€1,000 + €330 social + €8 employer UI). The employee receives roughly €820 in net pay (depending on II pillar choice and basic allowance application).
Worked example: €2,500/month gross
| Component | Employee (€) | Employer (€) |
|---|---|---|
| Gross salary | 2,500.00 | — |
| Unemployment insurance (1.6% / 0.8%) | −40.00 | +20.00 |
| II pillar pension (2%) | −50.00 | — |
| Social tax (33% on gross) | — | +825.00 |
| Taxable income (gross − UI − II pillar − allowance €700) | 1,710.00 | — |
| Income tax (22%) | −376.20 | — |
| Net take-home pay | 2,033.80 | — |
| Total monthly employer cost | — | 3,345.00 |
Estonia-specific things employers should know
- Sotsiaalmaks has a floor. The monthly minimum sotsiaalmaks (€270.60 in 2025 on a €820 monthly minimum base) applies regardless of whether the employee is part-time — unless the employee is a pensioner, on parental leave, in a few specific exempt categories, or holds multiple jobs and the minimum is met elsewhere. Hiring 0.25 FTE roles is therefore disproportionately expensive in Estonia.
- Employees can change II pillar rate twice a year. The default is 2%. From 2021 onwards, employees can opt for 0%, 2%, 4% or 6%. Changes apply from 1 January or 1 July. Recompute payroll when employees change rate.
- The 24% tax rate is already legislated for 2026. Update payroll engines and employee net-pay communication ahead of January 2026 to avoid surprises.
- Holiday pay and sick pay rules differ from many EU countries. Annual leave is 28 calendar days (not working days) by default. Sick days are paid by the employer for days 4–8 of an illness; days 9+ are paid by the Health Insurance Fund. The first 3 days are unpaid.
- TSD declaration is monthly. Employers file TSD (income, social tax and mandatory pension) by the 10th of the following month, electronically through e-MTA.
- Fringe benefits are taxed differently from salary. Company cars used privately, employer-paid private health insurance, and accommodation beyond limits are taxed at 22% income tax + 33% social tax on the grossed-up benefit value (using the 22/78 formula). Don't add these to the calculator's gross input — they go on a separate TSD line.
Frequently asked questions
Can I hire on a contract instead of payroll?
Yes — service contracts (töövõtuleping) and authorisation contracts (käsundusleping) are common alternatives. They reduce social tax exposure for the employer (no 33% sotsiaalmaks on the contractor side, only on payments to the contractor as social tax base under specific rules). But misclassification risks are real: EMTA actively audits arrangements where the economic reality is employment.
How does the basic allowance work for two-job employees?
The €700/month allowance is personal, not per-employer. An employee working two jobs declares to one employer to apply the allowance; the other applies tax on full gross. The annual return reconciles. From 2025, the flat allowance design eliminated the cross-income clawback that previously caused most multi-job filers to owe at year-end.
Are there any tax-favoured employee benefits?
A few: training expenses up to €100/employee/year, sports and health benefits up to €400/employee/year (jointly across categories), and certain transport benefits. These are not subject to income tax or social tax within the limits. Above the limit, the excess is taxed as a fringe benefit.
Is there a minimum wage in Estonia?
Yes — €886/month gross in 2025 (raised from €820 in 2024). The minimum hourly rate is €5.31. The sotsiaalmaks monthly minimum base is €820/month for 2025, slightly below the legal minimum wage, due to a different statutory anchor.
Can a foreign employer run Estonian payroll without an entity?
Generally no — to register employees with EMTA and file TSD, you need a local employer registration. An EOR (Employer of Record) provider can act as the legal employer; otherwise you need an Estonian OÜ or branch. See EOR cost calculators.
Official sources
- EMTA — Social tax rates and minimums
- Töötukassa — Unemployment insurance for employers
- Pensionikeskus — Pension pillars and contribution rates
Last reviewed: 2026-05-10.