Estonian payroll calculator, 2026 rates

What the calculator is doing

Estonian payroll has five moving parts and the order they are applied in is what decides the answer. The calculator applies them in the statutory order rather than the convenient one, which is why it will disagree slightly with calculators that subtract the basic exemption first.

1. The employee unemployment insurance contribution, 1.6% of gross, comes off first.
2. The funded pension contribution, 2%, 4% or 6% of gross, comes off next, if the person is a second pillar member.
3. The basic exemption is then subtracted from what is left, up to 700 euros a month, and only if the employee has given the employer a written application.
4. Income tax at 22% is charged on what remains after those three steps.
5. The employer taxes are calculated separately on the gross: social tax at 33% and unemployment insurance at 0.8%.

So the figure the employee sees and the figure the company pays are built from the same gross by two different routes, and the gap between them is the number most people underestimate. On an ordinary salary the employer pays about 1.34 euros for every euro of gross, and the employee keeps about 0.83 of it.

The 2026 rates, and where each one comes from

There is a lot of out-of-date Estonian payroll guidance in circulation for 2026, including from large firms, because a planned rise in income tax to 24% was dropped and a 2% security tax on profits was repealed before it took effect. The rates below are the ones actually in force.

The income tax, social tax, unemployment and funded pension rates and the basic exemption are published by the Estonian Tax and Customs Board. The social tax monthly rate of 886 euros, and so the 292.38 euro minimum, come from the same source. The unemployment insurance rates were fixed from 1 January 2025 and run to 2028, so they are the one part of this table unlikely to move next year.

The basic exemption changed on 1 January 2026

This is the single biggest change in Estonian payroll for years and it is worth being precise about. Until the end of 2025 the basic exemption tapered away as income rose, which meant a payroll calculation had to look at the whole year to get a month right. From 1 January 2026 it does not. The exemption is 700 euros a month for everyone, 8,400 a year, and it does not shrink as income grows. At pensionable age it is 776 euros a month. A person who has reached pensionable age also has no 1.6% unemployment insurance withheld, while the employer still pays its own 0.8%, which is why the calculator treats that case separately rather than just swapping one exemption figure for another.

The minimum social tax obligation, which catches most part-time staff

Employer social tax is 33% of the gross, but not less than 292.38 euros a month. The floor is 33% of a statutory monthly rate of 886 euros, and it applies per employee, per month, regardless of how little the employee is actually paid. Hire someone for 400 euros a month and the social tax is still 292.38, not 132.

There is a list of exemptions, and it is longer than most employers expect. The minimum does not apply where the employee:

• receives a state pension
• has partial or no work ability
• is raising a child under three, or three or more children under 19
• is a school or university student
• was registered unemployed for at least six months before being hired
• works reduced hours by law, including workers aged 7 to 17
• is a member of a local government council
• is on long-term sick leave
• is absent for a whole calendar month on leave, incapacity, employee representation duties, a strike, or military or alternative service

If one of those applies, untick the box in the calculator and the social tax drops to a straight 33%. If you are not sure which of them applies to a particular person, that is exactly the sort of thing we check before the first payroll run rather than after an EMTA query.

A board member fee is taxed differently, and the difference is real money

A board member relationship is not employment, and the tax treatment follows that. Income tax at 22% and social tax at 33% both apply to a board member fee. Unemployment insurance does not, on either side: the Tax and Customs Board lists management board members among the people who do not pay unemployment insurance premiums at all. The funded pension contribution is still withheld where the person is a second pillar member.

So the employer multiplier on a board member fee is 1.33 rather than 1.338, and the employee keeps the 1.6% that would otherwise have gone to the unemployment fund. On a 2,000 euro payment that is 48 euros a month between the two sides. It is not a large saving and it is never a good reason on its own to call a salary a board member fee, because the two are not interchangeable and EMTA is entitled to look at the substance of what the person actually does.

What changed on 1 April 2026, and why half the internet has the wrong figure

The Estonian minimum wage did not change on 1 January 2026. It changed on 1 April. From January to March 2026 the minimum for full-time work was 886 euros a month and 5.31 euros an hour, exactly as in 2025. From 1 April 2026 it is 946 euros a month and 5.67 euros an hour, set by Government Regulation of 23 March 2026 No. 36.

Two consequences follow. The first is that a contract signed in February 2026 at 900 euros was lawful then and was below the minimum from April, so it needed amending. The second is a coincidence that causes real confusion: the 886 euro figure is simultaneously the 2026 social tax monthly rate and the minimum wage for the first three months of 2026. They are two different numbers that happen to be equal, and they are set by different instruments for different purposes.

What the calculator does not do

Three things, deliberately, because guessing at them would make the output look more certain than it is.

• Fringe benefits. A company car, a paid phone or health costs over the 400 euro annual limit are taxed separately, at 22/78 of the value plus 33% social tax on value plus income tax. That works out at roughly 70.5% on top of the cost, and it does not pass through the salary calculation at all.
• Part months and absences. A starter mid-month, a sick day, holiday pay calculated on a six-month average, or a month with no payment at all each change the result, sometimes substantially.
• Non-residents and treaty positions. If the person is not an Estonian tax resident, or works from another country, the answer can be that Estonian payroll taxes are not the ones due. That is a different question and it is the one we get asked most.

If the answer matters, send us the actual numbers and we will check them properly. A calculator is a sanity check, not a payroll run.

Frequently asked questions