Estonia Salary Calculator 2026
Calculate your salary easily by entering your data. The most accurate salary calculator with 2026 tax changes.
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Advanced settings (Pillar III, alimony, bailiff fees)
- Tax-free income €700/month for all (progressive system removed)
- Income tax 22%
- Minimum wage €886
- Social tax minimum €292.38
Detailed calculation
Employer taxes
Salary distribution
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Accurate where it matters most
- Accurate formulas: 2026 income tax 22%, tax-free income €700, correct social tax calculation
- Three-way calculation: Enter gross salary, net salary, or employer cost — the rest is calculated automatically
- Special cases covered: Pensioner taxation, Pillar II choices, additional deductions
- Minimum social tax: Uses correct 2026 minimum rates (€292.38)
- Verified results: Tested against Estonian Tax and Customs Board calculations
Complete Guide to Estonian Salary Calculations in 2026
1. Salary Components and the Tax System
Gross Salary — The Contractual Amount
The gross salary is the amount agreed upon in the employment contract. The following taxes and mandatory contributions are withheld from this amount:
- Income tax 22% — goes to the state budget, including local government
- Unemployment insurance 1.6% — goes to the state budget and the Unemployment Insurance Fund
- Funded pension 0%, 2%, 4%, or 6% — directed to the employee's pension fund
Employer Costs — The Wage Fund
In addition to the gross salary, the employer pays the following mandatory contributions:
- Social tax 33% — minimum €292.38/month (€886 × 0.33)
- Employer's unemployment insurance 0.8% — calculated from gross salary
- Total cost formula: Gross salary + (Gross × 0.33) + (Gross × 0.008)
All these taxes are paid to the Estonian Tax and Customs Board.
2. Tax-Free Income in 2026 — The Progressive System Is Gone!
From 2026, a flat tax-free income of €700/month (€8,400/year) applies to everyone, regardless of income level. This is the biggest tax reform in recent years — the so-called “maksuküür” (progressive tax-free system) has been abolished!
2026 tax-free income:
- All employees: €700/month (€8,400/year) — regardless of income
- Pensioners: €776/month (€9,312/year) — regardless of income
- Progressive system removed: Tax-free income no longer decreases with higher earnings
3. Practical Salary Examples for Different Income Levels
| Gross salary | Net salary | Employer cost | Total taxes |
|---|---|---|---|
| €886 (minimum) | €834 | €1,185 | €351 |
| €1,500 | €1,305 | €2,007 | €702 |
| €2,000 | €1,689 | €2,676 | €987 |
| €3,000 | €2,457 | €4,014 | €1,557 |
* Calculated with €700/month tax-free income, Pillar II 0%, non-pensioner
4. Special Cases in Estonian Payroll
Pensioner Payroll
- Tax-free income is €776/month (fixed amount)
- The Social Insurance Board applies the tax-free amount to pension automatically
- If the pension is below €776, the remaining portion can be used for employment income
Part-Time Employment
- Social tax minimum applies proportionally (e.g., 0.5 FTE = €146.19)
- Tax-free income is used in full regardless of working hours
- Use actual working hours when calculating hourly rate
Pillar II Impact on Net Salary
- 2% of gross salary — the default rate
- 4% or 6% — voluntary additional contributions
- All contributions reduce taxable income
5. Legal References and Sources
- Income Tax Act (TMS) — § 4(1) (22% rate), § 23 (tax-free income €700)
- Social Tax Act (SMS) — § 7(1) (33% rate), § 2(8) (minimum base €886)
- Unemployment Insurance Act — sets the 1.6% and 0.8% rates
- Funded Pensions Act (KoPS) — § 9 (contribution rates)
- 2026 State Budget Act — sets minimum wage at €886
2026 Estonian Tax Parameters
| Tax / parameter | 2026 rate | Paid by |
|---|---|---|
| Income tax | 22% | Employee |
| Social tax | 33% | Employer |
| Social tax minimum | €292.38/month | Employer |
| Unemployment insurance (employee) | 1.6% | Employee |
| Unemployment insurance (employer) | 0.8% | Employer |
| Tax-free income | €700/month | — |
| Pensioner tax-free income | €776/month | — |
| Minimum wage | €886/month | — |
| Funded pension (Pillar II) | 2%, 4%, or 6% | Employee |
Source: Estonian Tax and Customs Board, Social Insurance Board. Effective from January 1, 2026.
Net Salary Calculation Formula
Net salary
Net salary = Gross salary − Funded pension − Unemployment insurance − Income taxwhere:
Funded pension = Gross salary × Pillar II % Unemployment insurance = Gross salary × 1.6% Income tax = (Gross − Pension − Unemployment − €700) × 22%Employer cost
Employer cost = Gross salary + Social tax + Employer unemployment = Gross salary × 1.338Frequently Asked Questions
What changed in Estonia's tax-free income for 2026?
From 2026, the tax-free income is a flat €700/month (€8,400/year) for everyone, regardless of income level. The previous progressive system (maksuküür) where tax-free income decreased as earnings rose has been abolished. Pensioners receive €776/month tax-free.
How much does an employer pay on top of the gross salary in Estonia?
The employer pays social tax (33%) and employer's unemployment insurance (0.8%) on top of the gross salary. For example, a €2,000 gross salary costs the employer approximately €2,676 in total. The minimum social tax in 2026 is €292.38/month.
How is income tax calculated in Estonia in 2026?
Income tax is 22% of taxable income. Taxable income = gross salary – funded pension (Pillar II) – unemployment insurance (1.6%). The tax-free allowance (€700/month) is then subtracted. Income tax = (taxable income – tax-free allowance) × 22%.
How do I calculate net salary from gross in Estonia?
Net salary = gross salary – funded pension (Pillar II) – unemployment insurance (1.6%) – income tax (22% of taxable income after tax-free deduction). For example, with a €2,000 gross salary and 2% Pillar II, the net salary is approximately €1,658.
What is the minimum wage in Estonia in 2026?
The minimum wage in Estonia for 2026 is €886 per month. This is the gross amount before taxes. The minimum social tax obligation for employers is €292.38/month (€886 × 33%).
Does the calculator account for Pillar II pension contributions?
Yes. You can select a Pillar II rate of 0%, 2%, 4%, or 6%. If you have left Pillar II, select 0%. Pension contributions are deducted before calculating income tax, so a higher Pillar II rate reduces your income tax.
What is the social tax minimum in Estonia in 2026?
The minimum social tax in 2026 is €292.38 per month. This means even if the employee's salary is very low, the employer must pay at least €292.38 in social tax. This is based on the minimum wage of €886. The minimum does not apply to pensioners, students, and minors.
How are sick leave payments taxed in Estonia?
Only income tax is withheld from sick leave payments. Unemployment insurance and funded pension contributions do not apply. The employer does not pay social tax or unemployment insurance on sick leave. The employer pays sick leave from the 4th day for 5 days, at 70% of the average salary of the last 6 months.
Do I need to submit a tax-free income application?
Yes! The employee must submit a written application to the employer to use the tax-free allowance. Without an application, the tax-free allowance cannot be applied. The application can only be submitted to one employer at a time.
Do previous tax-free income applications still apply in 2026?
Yes, previous applications remain valid at the amount stated in them. If the application stated €654, that amount will still be applied in 2026. To use the new €700 tax-free amount, a new application must be submitted. If the application stated 'the maximum amount allowed by law', the new €700 limit applies automatically.
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Estonia Salary Calculator 2026 last updated: April 2026 | Built by the Uku team together with Estonian accountants · Palgakalkulaator 2026 eesti keeles
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