Estonia Salary Calculator 2025
Calculate your salary conveniently by entering your data into the salary calculator. This is the most accurate Estonian salary calculator with changes for 2025.
Enter salary data
2025 changes
• Income tax increased to 22% (from 20%)
• Tax-free income up to 654€ per month
• Minimum wage 820€
Detailed calculation
Employer taxes
Salary distribution
Salary Calculator Estonia 2025 for Accountants — Accurate Payroll Tool
Professional salary calculator for accountants and entrepreneurs, which takes into account all 2025 tax changes. Created by Estonian accountants who know what is really needed — speed, accuracy and reliability in daily payroll calculations.
💡 Uses correct social tax minimum rates, unlike other popular salary calculators.
Why do accountants choose our calculator?
- Correct formulas: 2025 income tax 22%, tax-free income 654€, correct social tax calculation etc.
- Quick to use: Enter gross salary, net salary or employer cost — the rest is calculated automatically
- Special cases covered: Pensioner taxation, II pillar options, additional deductions
- Minimum social tax calculation: Uses correct social tax minimum rates, unlike other popular calculators
- 100% accurate: Tested with Tax and Customs Board calculations
Quick guide for accountants
- Choose input method: Client's gross salary, desired net salary or budget limit
- Specify special cases: Pensioner, full or part-time, II pillar rate, disability, employment type etc.
- Instant result: Taxes, net salary and employer cost all with one click
Comprehensive Payroll Guide for Accountants 2025
1. Payroll Components and Taxes
Gross Salary — Contractual Wage
Gross salary is the amount agreed in the employment contract, from which the following taxes are withheld:
- Income tax 22% (from 2025) — to state treasury, incl. local government
- Unemployment insurance contribution 1.6% — to state treasury, incl. Unemployment Insurance Fund
- Funded pension 0%, 2%, 4% or 6% — to employee's funded pension fund
Employer Costs — Wage Fund
The employer additionally pays the following taxes:
- Social tax 33% — minimum 270.60€ per month (gross salary × 0.33 ≥ 270.60€) — to state treasury, incl. Health Insurance Fund and Social Insurance Board
- Employer unemployment insurance 0.8% — calculated from gross salary — to state treasury, incl. Unemployment Insurance Fund
- Total cost formula: Gross salary + (Gross salary × 0.33) + (Gross salary × 0.008)
All taxes are paid to the Tax and Customs Board.
💡 Accountant's tip: Employer's total cost or wage fund = gross salary × 1.338
2. Tax-Free Income Calculation 2025
In 2025, the fixed tax-free income is 654€ per month for all employees whose annual income does not exceed the limit set by law.
NB! Important for accountants to know!
Tax-free income calculation rules:
- Annual income up to 14,400€: Tax-free income 654€/month (7,848€/year)
- Annual income 14,400€ - 25,200€: Tax-free income decreases proportionally (calculated by formula)
- Annual income over 25,200€: Tax-free income 0€
- Pensioners: Fixed 776€/month regardless of income
Note: To declare tax-free income, the employee must submit an application. Without an application, tax-free income cannot be applied!
3. Practical Examples for Different Salaries
| Gross salary | Net salary | Employer cost | Total to state |
|---|---|---|---|
| 886€ (minimum) | 825€ | 1186€ | 361€ |
| 1500€ | 1260€ | 2007€ | 747€ |
| 2000€ | 1594€ | 2676€ | 1082€ |
| 3000€ | 2310€ | 4014€ | 1704€ |
* Calculations made with tax-free income 654€/month, II pillar 0%, non-pensioner
4. Special Cases in Payroll
Pensioner Payroll
Special rules apply for old-age pensioners:
- Tax-free income 776€/month (fixed)
- No unemployment insurance contribution
- Employer pays unemployment insurance 0.8%
Part-Time Work
For part-time employees:
- Social tax minimum applies proportionally (e.g., 0.5 position 135.30€)
- Tax-free income applies in full
- When calculating hourly rate, use actual working hours
II Pillar Impact
Funded pension payments reduce net salary:
- 2% of gross salary — default rate
- 4% or 6% — voluntary additional payments
- Payments reduce taxable income
5. Legislative References and Sources
Professional accountants must know the legal basis of payroll:
- Income Tax Act (ITA) — § 4 sec 1 (22% rate), § 23 (tax-free income)
- Social Tax Act (STA) — § 7 sec 1 (33% rate), § 2 sec 8 (minimum)
- Unemployment Insurance Act — rates 1.6% and 0.8%
- Funded Pensions Act (FPA) — § 9 (contribution rates)
- 2025 State Budget Act — minimum wage 886€
⚠️ Important: Always verify current rates from Riigi Teataja and Tax and Customs Board website.
Frequently Asked Questions
How to calculate salary when an employee starts or ends employment mid-month?
For monthly salary: gross monthly salary ÷ normal working days in month × days worked.
For hourly wages: gross hourly rate ÷ normal hours in month × hours worked.
Social tax is calculated proportionally to time worked.
What taxes are withheld from sick pay?
Only income tax is withheld from sick pay. Unemployment insurance and funded pension are not withheld.
The employer does not pay social tax or unemployment insurance on sick pay.
The employer pays sick pay from the fourth day for 5 days (may also pay from second or third day for 6-7 days),
calculated at 70% of average salary from the last 6 months.
How to handle bonuses and additional payments?
All monetary bonuses and additional payments are added to gross salary and all taxes are calculated.
Fringe benefits are taxed with income tax and social tax, but are not added to employee's wage
and are not included in employee's annual income.
When does the social tax minimum apply?
In 2025, the monthly rate underlying the minimum social tax obligation is 820 euros,
i.e., the minimum social tax obligation for the employer is 270.60 euros per month.
Applied proportionally for part-time work.
Does not apply to pensioners, students and those under 18 years old.
Is tax-free income calculation automatic?
No! The employee must submit a tax-free income application. Without an application, tax-free income cannot be used.
The application can only be submitted to one employer.
How is vacation pay taxed?
Vacation pay is taxed the same as wages. The average is calculated based on the last 6 months' salary.
Vacation pay must be paid no later than the penultimate working day before vacation, unless employee and employer agree otherwise.
How is social tax calculated for disabled pensioners and people with disabilities?
An employer who employs a person with reduced work ability can apply for social tax benefits from the state through the Estonian Unemployment Insurance Fund.
To do this, they must submit an application to the unemployment fund. If the application meets the requirements, the unemployment fund prepares a decision on paying social tax benefits.
The following conditions must be met to receive the benefit:
• the employer is a company, non-profit organization, foundation or sole proprietor;
• the employee has reduced work ability (assessed as partial or lacking or at least 40% permanent incapacity for work);
• the employee works for the employer under an employment contract (benefits are not paid if a person with reduced work ability works under a contract for services, authorization or other contract under law of obligations).
More information: Unemployment Fund social tax benefit
What taxes must be paid when paying fees?
Payment of fees for creative work is treated as payment of wages and is taxed with all taxes like wages.
For creative work, a contract under law of obligations is usually concluded (contract for services).
What taxes must be considered for contracts for services?
Contract for services fees are taxed like regular wages, i.e., unemployment insurance,
mandatory funded pension and income tax are withheld, but tax-free minimum cannot be used.
The employer pays social tax and unemployment insurance but does not have to consider minimum social tax.
No vacation obligation arises with contracts for services.
What is included in annual income?
Annual income includes received wages (both under employment contracts and contracts under law of obligations),
dividends, rental income and interest income. Additional income includes real estate sales (excl. exceptions),
sales of goods (excl. exceptions), income from investments.
Income received from abroad and income tax paid must be declared separately.
