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Income tax in Estonia 2026
Estonia taxes everything at a flat 22%, and from 2026 everyone keeps the first EUR 8,400 tax-free — the notorious phase-out that clawed the exemption back from middle earners is gone.
Employee-side charges are tiny: 1.6% unemployment insurance plus a 2–6% funded-pension contribution; the employer carries the 33% social tax.
At a glance
- top rate
- 22% flat
- entry band
- 0% on the first EUR 8,400 (EUR 9,312 from pension age)
- tax year basis
- Calendar year
- filing deadline
- 30 April (pre-filled online); tax payable by 1 October
- residency basis
- Worldwide if you have an Estonian home or stay 183+ days in 12 months
- regime flag
- Ship crew on qualifying vessels: 0%; small-business account: 20% of receipts
Rates
How income is taxed (2026)
| Rate | Base | Applies to |
|---|---|---|
| 22% | Income above the EUR 8,400 exemption | Salaries, business income, rents, interest and gains |
| 10% | Gross | Qualifying annuity pension payments from European Economic Area (EEA) pension funds |
| 0% | — | Wages of crew on qualifying EEA-flagged international ships |
| 20% of receipts | All business-account inflows | Small-entrepreneur business account — replaces income tax and the 33% social tax |
Thresholds & allowances
- Basic exemptionEUR 8,400 (2026)
Flat for all incomes from 2026 — previously phased out between EUR 14,400 and 25,200
- Pension-age exemptionEUR 9,312
Replaces the basic exemption from the year you reach state pension age
- Pension savings deductionEUR 6,000 or 15% of income
Whichever is lower, for voluntary pension premiums and qualifying fund units
- Education and donationsUp to EUR 1,200 (or half your income)
Combined cap for educational expenses (own or under-26 dependants') and approved donations — whichever limit is lower
- Forestry and farm deductionsEUR 5,000 + 5,000
Extra annual deductions for self-produced agricultural sales and timber income
Residency
Residency trigger
A place of residence in Estonia or 183+ days of presence in any 12-month period makes you resident, taxed on worldwide income; you must notify the tax board when residence starts or ends, and spouses are taxed separately.
Non-resident treatment
Non-residents pay 22% on Estonian employment, directors' fees and rents, 10% on royalties, performances and professional fees — with dividends at 0% and most interest exempt; European Economic Area (EEA) residents filing in Estonia can claim resident-style deductions.
Notes
- Sole proprietors deduct everything immediately — even land and fixed assets — with no depreciation schedules, and losses carry forward 10 years.
- The business-account regime is genuinely bookkeeping-free: the bank forwards 20% of each receipt to the tax board automatically.
- Salary earned abroad over 183+ days that was taxed there (even at zero rate, with a certificate) is exempt in Estonia.
- Fringe benefits are taxed on the employer, not the employee — your company car never appears in your return.
- Returns are pre-filled and most people confirm them online in minutes; there is no joint filing.
- Estonia's famous 0% on retained corporate profits belongs to the company system — sole traders pay the 22% annually like anyone else.
FAQ
What is Estonia's income tax rate?
A flat 22% on income above the EUR 8,400 basic exemption — one rate for salaries, business income and gains alike.
What changed in 2026?
The exemption became universal: EUR 8,400 tax-free for everyone, ending the phase-out that removed it above EUR 25,200 of income; the planned 24% rate rise was cancelled.
When do I file and pay?
File the pre-filled return by 30 April; any balance is due by 1 October, with refunds paid by the same date.
Figures: tax year 2026, compiled from public sources. Not tax advice.