Estonian Salary Calculator

Calculate your net salary and total employer cost in Estonia with our comprehensive 2026 calculator. Estonia’s tax system is known for its simplicity, but understanding the breakdown of taxes is essential for both employees and employers.

Tax Rates in Estonia (2026)

Beginning in 2025 and 2026, Estonia has implemented significant changes to its tax system, including the elimination of the “tax hump” (graduated tax-free income) and a unified income tax rate.

1. Income Tax (Tulueksaks)

The income tax rate is 22% (increased from 20% in previous years). Starting from 2025, the tax-free allowance is simplified to a flat amount for most residents, regardless of their income level.

2. Social Tax (Sotsiaalmaks)

Social tax is paid by the employer and is 33% of the gross salary. This tax funds health insurance and state pensions. It is not deducted from your gross salary; it is an additional cost for the employer.

3. Unemployment Insurance (Töötuskindlustusmakse)

This tax is shared between the employee and the employer:

• Employee share: 1.6% (deducted from gross)
• Employer share: 0.8% (added to employer cost)

4. Funded Pension (Kogumispension)

Often called the “II pillar,” this is usually 2% of the gross salary, deducted from the employee. However, some individuals may have opted to increase this to 4% or 6%. Our calculator currently defaults to the standard 2% rate.

Gross Salary vs. Net Salary

• Gross Salary: The amount agreed upon in your employment contract. This is the base for all tax deductions.
• Net Salary: The “take-home” pay. This is what arrives in your bank account after all employee taxes have been deducted.
• Employer Cost: The total amount the company pays to employ you. This includes your gross salary PLUS the employer’s social tax and unemployment insurance.

How to use the calculator

1. Enter the amount: You can start with either the Net salary you want to receive, the Gross salary offered, or the total Employer Cost budget.
2. Breakdown: The calculator instantly updates the tax components so you can see exactly where the money goes.
3. Accuracy: Our tool uses the 2026 rules, ensuring you have the most up-to-date information for future planning.

Frequently Asked Questions

What happened to the “Tax Hump”?

The previous system where tax-free income gradually decreased as your salary increased was replaced with a more uniform system to reduce complexity and allow people to earn more without being punished by higher marginal tax rates.

Is health insurance included?

Yes, the social tax (33%) paid by your employer covers your national health insurance (Haigekassa).

Does this apply to freelancers (LHV Entrepreneur Account)?

The Entrepreneur Account has different rules (usually a flat 20% or 24% on all incoming funds). This calculator is specifically for standard employment contracts (Tööleping).