Estonia Tax Calculator 2026

Estonia 22% flat rate applies to: employment income (salary, wages), business income (self-employed, freelancers), rental income, capital gains (shares, property, crypto), dividends received, interest income, royalties. No differentiation by source. Simple calculation: (income - €700) × 22% = tax.

Estonia originally planned increase personal income tax to 24% from 2026. Parliament voted July 2025 to cancel increase - remains 22%. Defense tax proposal also abandoned. Estonia maintains competitive rate despite fiscal pressures. Stability for taxpayers, businesses.

Estonia basic exemption €700/month (€8,400/year) 2026: available to ALL residents regardless of income. Previous 'tax hump' abolished - middle earners (€1,200-2,100/month) previously lost allowance gradually. Now everyone gets full €700. Pensioners €776/month. Automatic application by employer. Major benefit for middle-income workers.

Gross €1,000, tax-free €700, taxable €300 → tax €66 (22% of €300) = 6.6% effective rate. Plus €16 unemployment = €918 net (91.8% net).

Gross €3,000, tax-free €700, taxable €2,300 → tax €506 (22% of €2,300) = 16.9% effective rate. Plus €48 unemployment = €2,446 net (81.5% net).

Gross €10,000, tax-free €700, taxable €9,300 → tax €2,046 (22% of €9,300) = 20.5% effective rate. Plus €160 unemployment = €7,794 net (77.9% net). Approaches 22% flat rate as income rises.

Estonia corporate tax system: company earns profit, pays 0% tax if retained in business. Invest in equipment, staff, R&D, expansion - all tax-free. Tax liability only arises at dividend distribution. Revolutionary: defers tax until extraction, maximizes growth capital. Most countries tax corporate profits annually regardless of distribution.

Estonia dividend taxation: when company distributes profit, pays 22% corporate tax. Calculation: net dividend ÷ 0.78 = gross base, then × 22% = tax. Example: want €78,000 net to shareholders → gross €100,000 → tax €22,000. Effective 28.2% of net dividend. Shareholder receives dividend tax-free personally (no double taxation!).

Estonia corporate tax cash-based: rate applied based on year dividend paid, not earned. Dividends paid 2026 taxed at 2026 rate (22%). Allows tax planning timing distributions. Pay December 2025 vs January 2026 different rates if rules change.

Estonia 0% corporate perfect for startups: raise funding, burn cash on growth, scale business - pay 0% tax until profitable AND distributing. Can operate years without tax liability. Preserve cash flow critical early stages. Why Estonia hub for tech startups, e-commerce.

Estonia system allows strategic dividend timing: accumulate profits multiple years tax-free, distribute when tax-efficient (lower personal rate year, retire to lower-tax country, etc). Control when tax liability arises. Contrast: most EU countries mandatory annual corporate tax.

Estonia employee contributions 2026: 1.6% unemployment insurance deducted from gross salary. That's ALL! No health insurance, no pension (unless opt-in 2nd pillar), no other mandatory. Lowest employee social burden EU. Example: €3,000 gross → €48 unemployment = €2,952 before income tax. Compare Germany 20%, France 22% employee.

Estonia employer pays 33.8% on top gross salary: 33% social tax (funds healthcare, pensions, sickness), 0.8% unemployment insurance. Moderate EU standards. Example: €3,000 salary → employer pays €1,014 additional (total cost €4,014). Lower than Belgium 35%, France 45%, similar to Czech 33.8%.

Estonia minimum 2026: employer must pay social tax minimum €292.38/month (33% of €886) per employee regardless actual salary. Applies full-time workers. Part-time prorated. Ensures minimum contributions healthcare/pension system. Even if pay below €886, employer still pays on €886 base.

Estonia funded pension (II pillar): employee can choose contribute 2%, 4%, or 6% gross salary to personal pension fund. Optional - not mandatory (can opt out entirely). Deducted by employer, invested in chosen fund. State adds small contribution. Tax-deferred growth. Most Estonians participate II pillar.

Estonia e-Residency: government-issued digital identity for non-Estonians. Includes smart ID card with digital signatures, authentication. Allows: establish Estonian company (OÜ) online, open business bank accounts remotely, file taxes digitally, sign documents legally. Designed for entrepreneurs, freelancers, digital nomads wanting EU company without physically relocating.

Estonia e-Residency ≠ tax residency! Having Estonian company as e-resident does NOT make you Estonian tax resident. Still taxed by home country unless physically relocate Estonia 183+ days. Many e-residents use to access EU market, banking while residing elsewhere. Must understand tax implications home country + Estonia.

Estonia e-Residency benefits: EU company (access single market 450M people), reputable jurisdiction (Estonia EU, Eurozone, Schengen), digital infrastructure (100% online administration), banking access (Wise, LHV, others), 0% corporate tax on retained profits, English-language support, low setup costs (~€200-500).

Estonia Digital Nomad Visa: remote workers earning €4,500+ gross monthly can apply for 1-year residence permit. Work remotely for foreign employer OR own company outside Estonia. Can stay Estonia up to 183 days (avoid tax residency). Bring family. Requirements: location-independent work, proof income, health insurance.

Estonia Digital Nomad Visa tax: if stay <183 days, remain non-resident, pay no Estonian income tax (taxed by home country). If exceed 183 days, become tax resident → worldwide income 22% Estonian tax. Most nomads manage stay under threshold. Can work coworking spaces Tallinn, enjoy lifestyle, no Estonian tax.

Estonia crypto trading: gains from buying/selling cryptocurrency taxed as income at flat 22%. No special crypto tax rate. Buy Bitcoin €10k, sell €15k → €5k gain × 22% = €1,100 tax. Include in annual tax return. Must track cost basis, calculate gains. Estonia treats crypto as property subject to standard income tax.

Estonia crypto mining: income from mining operations taxed 22% as business income. Deduct expenses (electricity, equipment). Must register business if substantial. Hobby mining small amounts may be personal income. Commercial mining definitely business. Estonia relatively crypto-friendly - clear tax treatment.

Estonia crypto: no holding period exemptions, no tax-free thresholds (unlike Germany 1 year), no lower rates. All gains taxed 22% regardless holding time. Simpler than many EU countries but less favorable than jurisdictions with exemptions. Flat 22% straightforward to calculate.

Estonia capital gains shares, bonds, funds: taxed at 22% income tax rate. Gains calculated on net basis (proceeds - cost). Must declare in annual return. No separate capital gains tax schedule. Same flat rate as other income.

Estonia property gains: generally 22% on profit from sale. Primary residence special treatment - tax deferred if reinvest in new primary residence within specified time. Investment property fully taxed 22%. Real estate gains taxed on net basis (proceeds - costs - improvements).