Estonia taxes at flat rates, with one allowance and no bands. An employee pays nothing for social insurance: the 33% social tax sits on the employer, on top of your gross. Every rate is in the table below.
Income Tax
22% flat, and the €700 monthly allowance.
📄Social Tax
The 33% your employer pays, not you.
📊Salary Calculator
Gross to net, with employer cost.
💶VAT
24% since July 2025, and the €40,000 threshold.
💻Company Tax
0% on retained profit, and what it does not mean.
Every Rate on One Page
| Tax | Rate | Who pays |
|---|---|---|
| Income tax | 22% | You, after deductions and the basic exemption |
| Basic exemption | €700/month | Flat for everyone since 1 Jan 2026 |
| Social tax | 33% | Your employer, on top of gross |
| Unemployment insurance | 1.6% + 0.8% | You and your employer |
| Second pillar pension | 2% / 4% / 6% | You, if you joined |
| Corporate, retained profit | 0% | Nobody — that is the point |
| Corporate, distributed profit | 22% | The company, on distribution |
| VAT, standard | 24% | The consumer |
| VAT, reduced | 13% / 9% | Accommodation; publications and medicines |
| VAT registration threshold | €40,000 | Per calendar year |
Three things most guidance still has wrong: income tax never became 24%, the basic exemption stopped tapering on 1 January 2026, and the 14/86 corporate rate is gone — though a 7% tail is not. See income tax and dividends.
Frequently Asked Questions
What is the income tax rate in Estonia?
22%, flat, with no bands. Not 24% — that rise was repealed in December 2025 before taking effect.
How much of my salary do I keep?
On €2,000 gross with the default second-pillar rate, €1,657.84 — about 83%. Unemployment insurance and the pension contribution come off before income tax, not after.
Is Estonia a low-tax country?
For companies reinvesting profit, unusually so — retained earnings are untaxed. For employees the burden is ordinary for the EU, just distributed differently: the employer carries the social tax.