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Estonia Tax Rates for 2026: What Business Owners Need to Know

Updated: 3 days ago

As 2026 approaches, it is important to review the key tax rates in Estonia that will apply in the new fiscal year. If you are unsure how these rates apply to your company in practice, ongoing accounting and tax support helps avoid errors and penalties.

Below is a structured overview of the most relevant figures for employees, entrepreneurs, and company owners.


Eesti maksud 2026 Oluline info ettevõtjatele

Personal Income Tax

  • The rate of withheld income tax remains 22%.

  • The basic exemption is:

    • 700 EUR per month (8,400 EUR per year)

    • 776 EUR per month (9,312 EUR per year) for pensionable age

  • Important: the basic exemption no longer depends on a person’s income level and does not decrease as income increases.


Employee Health Promotion Expenses

  • Employer-paid health promotion expenses are tax-exempt up to 400 EUR per employee per year.

Corporate Income Tax

  • Corporate income tax remains 22/78, payable upon profit distribution.

The decision on when and how to distribute profits should be reviewed from a tax strategy perspective, especially for owner-managed companies.

Social Tax

  • Social tax rate: 33%

  • Minimum monthly social tax obligation base: 886 EUR (up from 820 EUR in 2025)

  • Minimum social tax payable: 292.38 EUR per month

Minimum social tax obligations apply even in periods of low or irregular income and should be monitored as part of monthly compliance.

Unemployment Insurance

  • Employee contribution: 1.6%

  • Employer contribution: 0.8%(unchanged from 2025)

Funded Pension Contributions

  • Contribution rates: 2%, 4%, or 6%, depending on the individual’s registered choice.

Payroll Timing: December vs January

Estonian taxation follows the cash principle, which is particularly important at year-end. Payroll timing decisions at year-end often require professional review to ensure correct tax treatment and reporting.

  • If December 2025 salaries are paid in January 2026,→ 2026 tax rates apply→ Declared in the January TSD (deadline: 10 February 2026)

  • If December 2025 salaries are paid in December 2025,→ 2025 tax rates apply→ Declared in the December TSD (deadline: 10 January 2026)

VAT

  • Standard VAT rate remains 24%.

VAT obligations, registration thresholds and OSS rules should be assessed individually depending on business activity and transaction volume.

Understanding how these rates apply in practice - especially around payroll timing, minimum obligations and profit distribution - is essential for staying compliant and avoiding unnecessary corrections or penalties.


If you need clarity on how Estonian tax rules apply to your specific situation, professional advisory support helps structure decisions correctly from the start.


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